Issuance activity: Tomorrow, MinFin is scheduled to auction CZK5.0bn of 2028 bonds and CZK4.0bn of 2033 bonds. At the previous auction on July 2, MinFin significantly upsized, selling CZK11.6bn versus an indication of CZK7.0bn. As for the CZGB supply in 2H25, it is, in our view, unlikely to decrease meaningfully compared to 1H25. In 1H25 MinFin has issued CZK181.3bn in primary auctions and an additional CZK10.4bn and EUR250mn in the secondary market thus far this year. MinFin’s update of the Strategy states that in 2H25 it plans to issue CZK150-250bn, which is consistent with the full-year plan of CZK350-450bn in the previous strategy published in January.

Issuance activity: Tomorrow, MinFin is scheduled to auction CZK5.0bn of 2028 bonds and CZK4.0bn of 2033 bonds. At the previous auction on July 2, MinFin significantly upsized, selling CZK11.6bn versus an indication of CZK7.0bn. As for the CZGB supply in 2H25, it is, in our view, unlikely to decrease meaningfully compared to 1H25. In 1H25 MinFin has issued CZK181.3bn in primary auctions and an additional CZK10.4bn and EUR250mn in the secondary market thus far this year. MinFin’s update of the Strategy states that in 2H25 it plans to issue CZK150-250bn, which is consistent with the full-year plan of CZK350-450bn in the previous strategy published in January.

Market situation: On the Czech data front, CPI was confirmed at 2.9% yoy in June. We expect that the June figure marked the peak of yoy headline inflation. Although core remains elevated in yoy terms (3.0% yoy in June), its momentum slowed to 0.2% mom, the lowest ytd reading (full report: https://bit.ly/CPI_Jun25_EN). The CNB’s hawkish rhetoric is keeping up the short end of the CZK IRS curve, which has also put pressure on short-end CZGBs recently. Meanwhile, the threat of 30% tariffs on the EU seems to have had little impact on the markets. However, we believe that the economic consequences for the Czech Republic could be significant (see our previous report on this topic: https://bit.ly/US_tariffs_Czech_economy_EN).

Rates outlook: There are no further cuts priced in for the remainder of 2025 in the FRAs. However, we expect headline inflation to gradually settle close to the central bank’s 2% target in 2H25 and remain there in 2026. This positive outlook, coupled with an expected economic slowdown, should lead to further CNB rate cuts later this year to the end-year 3% terminal.

We estimate that Moneta will report revenue growth of +10.7% yoy to CZK3.44bn for the second quarter, with operating profit reaching CZK2.08bn (+19.0% yoy) and net profit CZK1.63bn (+15.1% yoy). Net interest income was positively affected by lower financing costs. Lower rates yoy reflect the CNB's cycle of interest rate cuts. On the other hand, interest income will be affected by the doubling of mandatory minimum reserves since January this year. According to our estimates, Moneta continues to successfully sell third-party products. We estimate operating costs to remain unchanged yoy. We expect Moneta's management to reiterate its full-year guidance.

Publication date: Thursday, July 24, 2025, at 7:00 a.m.

We estimate that Moneta will report revenue growth of +10.7% yoy to CZK3.44bn for the second quarter, with operating profit reaching CZK2.08bn (+19.0% yoy) and net profit CZK1.63bn (+15.1% yoy). Net interest income was positively affected by lower financing costs. Lower rates yoy reflect the CNB's cycle of interest rate cuts. On the other hand, interest income will be affected by the doubling of mandatory minimum reserves since January this year. According to our estimates, Moneta continues to successfully sell third-party products. We estimate operating costs to remain unchanged yoy. We expect Moneta's management to reiterate its full-year guidance.

Interest income will decline due to lower market rates yoy, but financing costs should fall faster. The doubling of the minimum reserve requirement to 4% from January 2025 is negative. We estimate net interest income for 2Q25 at CZK2.38bn (+12.6% yoy). NF&C will increase by +15.9% yoy to CZK872m, reflecting the successful sale of investment products. According to our projections, total operating income in the second quarter will reach CZK3.44bn (+10.7% yoy). We expect operating expenses to remain unchanged yoy (CZK1.35bn, 0% yoy). Operating profit will reach CZK2.08bn (+19.0% yoy). Risk costs will grow to CZK153m (+49.7% yoy), corresponding to 22bps, which is in line with Moneta's target (15-35bps). The effective tax rate should remain slightly above 15%, similar to 1Q25. Net profit of CZK1.63bn (+15.1% yoy).

2025 Projection: We expect Moneta to generate revenues of CZK 13.7 billion, operating expenses of CZK 5.8 billion, an operating profit of CZK 7.8 billion, and a net profit of CZK 6.1 billion in 2025. We estimate risk costs at 22bbs. 

Compared to Moneta's full-year guidance, our projections are slightly more optimistic. Moneta's targets are revenues of CZK13.6bn, costs of CZK5.9bn, an operating profit of CZK7.7bn, and a net profit of CZK6.0bn. Risk costs should fall within the range of 15-35bps. The effective tax rate should be 15.5%, and the ROTE should be 20%.

Results for 1H25 (reported 1Q25 + our estimates for 2Q25) are 50.1%, 48.3% and 51.6% of total revenues, operating expenses and net profit.