Czech inflation accelerated from 1.9% to 2.5% yoy in September. It thus slightly exceeded both the market consensus and our estimate, which in both cases stood at 2.4% yoy. September inflation was also higher than the Czech National Bank’s forecast (published in early August), which had expected 2.2% yoy. By contrast, annual inflation evolved in line with the CNB forecast in both July and August.

Czech inflation accelerated from 1.9% to 2.5% yoy in September. It thus slightly exceeded both the market consensus and our estimate, which in both cases stood at 2.4% yoy. September inflation was also higher than the Czech National Bank’s forecast (published in early August), which had expected 2.2% yoy. By contrast, annual inflation evolved in line with the CNB forecast in both July and August.

The main reason behind the increase in headline inflation in September was higher fuel prices. Prices at domestic petrol stations rose by 8.1% mom in September, marking their third consecutive increase. This was linked to the renewed escalation of the conflict in the Middle East, which pushed crude oil prices back towards USD 100 per barrel. Annual growth in fuel prices in Czechia accelerated from 26.3% in August to 37.4% in September, contributing 0.3-0.4pp to the rise in headline inflation, more than half of the total increase.

Electricity and gas prices for households continued to decline. In September, electricity prices fell by 0.1% mom and 10.6% yoy, with the administrative effect of transferring renewable energy payments to the state still contributing to the annual decline. Gas prices fell by 0.2% mom and 4.0% yoy. The exception remained heating prices, which increased by 0.1% mom and 1.6% yoy. Despite the significant rise in wholesale electricity and gas prices, Czech households have so far not felt the negative consequences. This may be due to a higher share of households using fixed-price energy contracts or to suppliers having secured energy purchases earlier at better prices. The still positive development of household energy prices offset higher prices in education, which rose at the start of the new school year (+4.1% mom in September). Overall, regulated price dynamics remained subdued, with these prices increasing by only 0.1% mom and remaining 1.0% lower yoy in September.

Food prices also remained on a downward trend. Prices for food and non-alcoholic beverages fell by 0.4% mom and 3.5% yoy in September. This offset the higher prices of alcohol and tobacco, which increased by 0.5% mom and 4.6% yoy. Given the severe drought, the related reduction in agricultural output this year, and higher wholesale energy and fuel prices, it is likely that the current downward trend in food prices will gradually reverse.

Core inflation accelerated from 3.0% yoy, where it had remained during the previous two months, to 3.1% yoy in September. This exceeded the upper bound of the CNB’s tolerance band, central bank’s forecast (2.9% yoy), and our estimate (3.0% yoy). According to our estimates, seasonally adjusted mom core price growth also strengthened from 0.25% in August to 0.28% in September, while its three-month annualised moving average increased to 3.3%. Services inflation accelerated from 4.5% yoy in August to 4.6% yoy in September. Although imputed rent growth remained strong on a mom basis (+0.4%), its annual pace slowed for the second consecutive month, from 5.4% to 5.1%. The gradually increasing comparison base had an impact. Annual growth in paid rents remained unchanged at 6.1% for the third consecutive month. Owing to the usual seasonality associated with the end of the summer holiday season, package holiday prices fell by 20.7% mom in September, only slightly less than last year’s decline of 21.1% mom. Nevertheless, annual price growth in the whole recreation, sport and culture category accelerated from 0.4% in August to 2.5% in September, contributing to stronger core services inflation. Annual price growth in telecommunications also strengthened markedly, rising from 2.0% to 2.9% in September. In this case, however, the main factor was the higher prices of goods, particularly mobile phones (+7.7% mom) and computers, laptops and tablets (+2.2% mom), which are also included in core inflation. This is most likely due to higher prices of electronic components amid strong global demand linked to investments in artificial intelligence. Information and communication services increased only modestly (+0.3% mom and +0.8% yoy in September). As a result, we estimate that core inflation excluding both rent components also increased, from 2.0% yoy in August to 2.2% yoy in September.

In light of the increase in core inflation and its momentum, we now expect the CNB to raise interest rates by 25bp at its upcoming November meeting. The key repo rate should therefore reach 4.0%. Although further rate hikes beyond the November meeting cannot be ruled out, we still consider the market expectation that the repo rate will rise towards 5% over the next year to be excessive.

The loan portfolio increased in 3Q26. We also anticipate a modest increase in NIM. Revenues are expected to increase by +8.3% yoy. However, given the cost management measures in place, this figure is only expected to rise slightly yoy. According to our estimates, net profit for 3Q26 will increase +9.2% yoy to CZK2.0bn. We estimate that Moneta will reiterate its FY guidance. We also expect Moneta to announce an extraordinary dividend of CZK5.

Publication date: Friday, October 23, 2026, at 7:00 a.m.

The loan portfolio increased in 3Q26. We also anticipate a modest increase in NIM. Revenues are expected to increase by +8.3% yoy. However, given the cost management measures in place, this figure is only expected to rise slightly yoy. According to our estimates, net profit for 3Q26 will increase +9.2% yoy to CZK2.0bn. We estimate that Moneta will reiterate its FY guidance. We also expect Moneta to announce an extraordinary dividend of CZK5.

According to our model, NII will increase by +8.1% yoy to CZK2.7bn, driven by growth in the loan portfolio. Interest income and funding costs will both increase. We estimate that the NIM will rise by 0.1% yoy to 2.1%. On a quarterly basis, it should remain stable. NF&C is expected to grow by +16.1% yoy to CZK997m due to successful investment product sale. We expect total operating income to reach CZK3.8bn, representing yoy growth of +8.3%. Moneta's focus on efficiency and cost management is expected to result in a modest yoy increase in operating costs of 1.6% to CZK1.4bn. Operating profit is expected to be +12.4% higher yoy at CZK2.5bn. Although credit costs will rise from the extremely low level seen in 3Q25 (CZK74m) to CZK156m, they will fall qoq due to the absence of any corporate sector default. We expect the effective tax rate to be 15%. We estimate net profit to be CZK2.0bn, corresponding to yoy growth of +9.2%.

Dividend: In recent years, it has become a tradition for Moneta to pay its shareholders an extraordinary dividend. This is typically announced in autumn. We see the 3Q26 report as a good opportunity to present the proposal. As of 30 June 2026, Moneta had excess capital of approximately CZK8 per share. We believe that the market is anticipating an announcement of an extraordinary dividend of CZK5 per share. 

2026 Gguidance: Our YTD forecasts correspond to 77% and 78% of the full-year targets for operating and net profit, respectively. Revenue stands at 75%, while costs stand at just 72%. Our conservative prediction is that management will reiterate the FY projections. Please note that the last update to the full-year forecast was included in the 2Q26/1H26 report at the end of July.