Issuance activity: On Wednesday, MinFin is scheduled to auction CZK3.0bn of 2029 bonds, CZK3.0bn of 2034 bonds and CZK5.0bn of 2036 bonds. So far this year, the issuance campaign has mostly been realised on the secondary market, with tap sales totalling CZK50.6billion ytd. The draft state budget for 2026, excluding EU funds, aims for a CZK310bn deficit, which is around CZK60bn higher yoy. Overall, we estimate full-year gross issuance at CZK463bn and net issuance at CZK262bn. Further details can be found in the Czech Economic Outlook: https://bit.ly/CEO_1Q26_EN.

Issuance activity: On Wednesday, MinFin is scheduled to auction CZK3.0bn of 2029 bonds, CZK3.0bn of 2034 bonds and CZK5.0bn of 2036 bonds. So far this year, the issuance campaign has mostly been realised on the secondary market, with tap sales totalling CZK50.6billion ytd. The draft state budget for 2026, excluding EU funds, aims for a CZK310bn deficit, which is around CZK60bn higher yoy. Overall, we estimate full-year gross issuance at CZK463bn and net issuance at CZK262bn. Further details can be found in the Czech Economic Outlook: https://bit.ly/CEO_1Q26_EN.

Market situation: At the end of last week, the hawkish repricing of the CNB’s next moves contributed to an upward shift in CZK IRS. On Thursday, the CNB unanimously left interest rates unchanged, with a less dovish tone than expected. Moreover, the new staff forecast signals no cuts, with a subsequent hike at the end of 2026 (full report: https://bit.ly/CNB_Feb26_EN). On the data front, the flash January CPI came in at 1.6% yoy, as expected, with the slowdown primarily driven by the administrative reduction in energy prices. However, services price dynamics remained elevated at 4.7% yoy. Last Friday, Fitch affirmed the Czech Republic's AA- rating with a stable outlook, reflecting Fitch’s expectation that fiscal easing under the new government will be limited.

Rates outlook: In the baseline scenario, we do not expect the CNB to cut interest rates this year, since we anticipate that the decline in inflation below the target will be temporary. However, given the recent softening of the CNB Board’s previously hawkish stance, the risk of a cut in the short term remains. Later this year, we anticipate that the new government’s fiscal stimulus, coupled with robust economic growth, will gradually intensify core inflationary pressures, effectively making a rate cut less likely.

Moneta reported a net profit of CZK1.6bn for 4Q25, representing a +1.8% yoy increase. This represents a respectable +3.0% premium over the market consensus. This is mainly due to lower risk costs and effective tax rates. ROTE was 23.4%. At the operating level, the results were more or less in line with estimates. Moneta exceeded its updated full-year guidance. Management proposes paying a dividend of CZK11.50 per share from 2025 profits. In our view, the outlook for 2026 is in line with market expectations.

Moneta reported a net profit of CZK1.6bn for 4Q25, representing a +1.8% yoy increase. This represents a respectable +3.0% premium over the market consensus. This is mainly due to lower risk costs and effective tax rates. ROTE was 23.4%. At the operating level, the results were more or less in line with estimates. Moneta exceeded its updated full-year guidance. Management proposes paying a dividend of CZK11.50 per share from 2025 profits. In our view, the outlook for 2026 is in line with market expectations.

NII for the fourth quarter of last year reached CZK2.5bn, an increase of +1.4% yoy. Although interest income declined, financing costs fell at an even faster pace. This resulted in growth in NII. The NIM remained unchanged at 2.0% on a qoq and yoy basis. NF&C increased by +7.5% yoy, reaching CZK875m. The high growth in other income (+30.3%, CZK262m yoy) was surprising, exceeding the market consensus by +42%. Total operating income reached CZK3.6bn (+4.5% yoy). Compared to the consensus, this is +1.0% higher. Operating expenses increased by +5.2% compared to 4Q24, reaching CZK1.6bn, due to higher personnel costs. Operating profit for the 4Q25 amounted to CZK2.0bn (+3.9% yoy). Compared to the market, this is a slightly weaker result (-1.3%) as the slight increase in costs was unexpected. Cost of risk rose by +191% yoy to CZK102m. However, this growth is due to a very low comparative base. Nevertheless, the cost of risk remains low, corresponding to only 14bps. This reflects the high quality of the loan portfolio. The effective tax rate in 4Q25 was 14.1%, lower than the consensus estimate of 15.3% and our estimate of 15.2%. Net profit for 4Q25 reached CZK1.6bn (+1.8% yoy). This corresponds to a ROTE of 23.4%. Net profit exceeded market expectations by 3.0%. This is due to the lower cost of risk and effective tax rate.

The full-year results show an increase in net profit of +11.9% yoy to CZK6.5bn, exceeding Moneta's updated target of CZK6.3bn by +3.2%. Revenues grew by +7.8% yoy to CZK13.9bn. Costs increased by +2.0% yoy, reaching CZK5.8bn. The cost of risk remained low at 16bps. This is below Moneta's target range of 17.5–22.5bps and our estimate of 20bps.

Moneta demonstrated the high quality of its loan portfolio. The loan portfolio grew by +5.8% yoy and +1.4% qoq. Sales of new loans increased by +21.9% yoy due to strong demand in the commercial and retail sectors. NPLs fell to just CZK3bn. This led to a decrease in the NPL ratio, dropping from 1.1% in 3Q25 to 1.0%. This is the lowest level in history.

Moneta's capital adequacy ratio stands at 18.7%. Moneta's excess capital above the target (15.25%) amounts to CZK5.7bn.

Dividend: Moneta proposes paying a dividend of CZK11.50 from last year's profits. Compared to the market price, this offers a decent gross yield of +5.6%. Shareholders will vote on the dividend proposal at the AGM on April 21, 2026.