Issuance activity: Tomorrow, MinFin is scheduled to auction CZK2.0bn of 2033 bonds, CZK2.0bn of 2035 bonds and CZK2.0bn of 2036 bonds. During the first subscription period of this year, the Ministry of Finance (MinFin) issued retail bonds and T-bills totalling CZK74bn. There is another round of three-month retail T-bill issuance this year. The final pre-Christmas subscription period will impact next year's financing needs, as the bonds subscribed will not be issued until 15 January 2027. So far this year, MinFin has issued a total of CZK183.6bn in bonds on the primary market (MinFin projects CZK270–370bn for the full year), as well as an additional CZK121.8bn on the secondary.

Issuance activity: Tomorrow, MinFin is scheduled to auction CZK2.0bn of 2033 bonds, CZK2.0bn of 2035 bonds and CZK2.0bn of 2036 bonds. During the first subscription period of this year, the Ministry of Finance (MinFin) issued retail bonds and T-bills totalling CZK74bn. There is another round of three-month retail T-bill issuance this year. The final pre-Christmas subscription period will impact next year's financing needs, as the bonds subscribed will not be issued until 15 January 2027. So far this year, MinFin has issued a total of CZK183.6bn in bonds on the primary market (MinFin projects CZK270–370bn for the full year), as well as an additional CZK121.8bn on the secondary. Overall, we estimate that approximately CZK100bn will be issued on the financial markets during 2H26. Therefore, issuance activity in the coming months is likely to remain subdued with the full-year volume of CZGBs sold on the primary market to be closer to the lower end of the range indicated by the MinFin. Meanwhile, the Czech government has suggested that the state budget deficit should be 'well below CZK400bn' in 2027, following a deficit of CZK310bn this year. We estimate that the cash state budget deficit will reach CZK360bin next year, with the total public finance deficit widening from 2.8% of GDP this year to 3.2% of GDP next year. Overall, the CZGBs may benefit temporarily from a successful retail bond campaign. However, the negative effects of a widening budget deficit and a higher volume of refinancing should begin to dominate next year.

Market situation: CZK IRS and bond yields continue to be influenced by global trends. Since the end of last week, aggressive bets on CNB monetary policy tightening have been partially unwound.  With the CNB meeting scheduled next week, the media quarantine will begin as early as Thursday. So far Governor Michl said that core inflation—or rather, its momentum—has slowed slightly, which he considers a significant indicator. His baseline scenario now involves a period of assessing new data, the outlook, the evolution of inflation risks, and the impact of restrictive monetary policy. Under this scenario, he would allow the CNB’s restrictive policy to take effect while monitoring the data and new forecasts. Jan Kubíček, currently considered one of the bank’s most hawkish members, told Reuters that he does not rule out another interest rate hike before the end of this year. However, he believes there is no reason to rush and that the timing of any further move remains open.

Rates outlook: We interpret the previous June rate hike as a pre-emptive step through which the CNB sought to hedge against persistent inflationary risks, amplified by concerns over the impact of the conflict in the Middle East. In our baseline scenario, we expect the repo rate to remain unchanged at 3.75% for the rest of this year and throughout 2027, with risks tilted more towards a further increase.

Moneta reported a yoy increase in net profit of +8.3%, reaching CZK1.76bn in 2Q26. This corresponds to RoTE of 23.3%.  Strong growth in NII and NF&C, coupled with lower operating costs, came as a particularly positive surprise. Net profit exceeded the market consensus by 2.6%. Moneta’s management has increased its full-year net profit forecast by 3%. Overall, Moneta delivered very strong results, well above the market.

Moneta reported a yoy increase in net profit of +8.3%, reaching CZK1.76bn in 2Q26. This corresponds to RoTE of 23.3%.  Strong growth in NII and NF&C, coupled with lower operating costs, came as a particularly positive surprise. Net profit exceeded the market consensus by 2.6%. Moneta’s management has increased its full-year net profit forecast by 3%. Overall, Moneta delivered very strong results, well above the market.

Moneta's total operating income grew in the second quarter of 2026, primarily thanks to NII. This increased by +9.2% yoy to reach CZK2.6bn. This was mainly due to a higher volume of loans and the associated income. NIM increased from 1.95% in 1H25 to 2.05%. Growth in NF&C (+10.8% yoy to CZK906m) was also unexpected, driven by the distribution of investment products. Moneta reported total operating income of CZK3.7bn (+8.2% yoy). Operating expenses fell slightly yoy (CZK1.4bn, -0.6%). Operating profit increased substantially by +14.1% yoy to CZK2.3bn. This reflects revenue growth coupled with a decline in costs. Credit costs grew to CZK254m in 2Q26 (+117% yoy) due to a client default. Nevertheless, in our view, they remain very low. The effective tax rate (14.9%) was also slightly lower than expected. Net profit for the second quarter increased by a significant +8.3% yoy to reach CZK1.7bn. This corresponds to a RoTE of 23.3%.

The loan portfolio grew by +9.1% yoy, reflecting growth in investment loans in particular. The volume of new loans granted increased by +43.9% yoy due to strong demand. The NPL ratio fell again, reaching 0.9%. Customer deposits increased by +3.7% yoy.

Moneta’s capital adequacy ratio stood at 19.95%. The excess capital above Moneta’s management target (15.5%) amounts to CZK8bn.

2026 Guidance: Moneta has raised its full-year targets, which were presented in February. It expects total revenue to reach CZK14.8bn (previously CZK14.6bn), operating costs to reach CZK5.9bn (previously CZK6.0bn), operating profit to reach CZK8.9bn (previously CZK8.6bn), net profit to reach CZK6.8bn (previously CZK6.6bn), and RoTE to reach 23%. Management estimates the credit costs at 20-35bps.  For the first half of this year, the reported net profit figures represent 49% of the revised full-year target. The second half of the year tends to be stronger than the first, due to factors such as the absence of regulatory fees, which are typically incurred in the first quarter.