Issuance activity: Tomorrow, MinFin is scheduled to auction CZK4.0bn of 2034 bonds, CZK3.0bn of 2036 bonds and CZK1.0bn of 2037 bonds. The formation of a new government following the general election earlier this month is still underway. Its representatives’ statements on the 2026 budget are unstable, ranging from increasing the deficit from the CZK286.0bn approved by the outgoing government by an additional CZK80.0bn to keeping the deficit as approved. In any case, the provisional budget regime, in which a maximum of one-twelfth the previous year’s budget can be spent per month, is likely to be implemented in the first few months of 2026, as was the case after the 2021 election. This could limit pressure to increase the issuance pace in the coming months due to the state budget deficit widening in 2026.

Issuance activity: Tomorrow, MinFin is scheduled to auction CZK4.0bn of 2034 bonds, CZK3.0bn of 2036 bonds and CZK1.0bn of 2037 bonds. The formation of a new government following the general election earlier this month is still underway. Its representatives’ statements on the 2026 budget are unstable, ranging from increasing the deficit from the CZK286.0bn approved by the outgoing government by an additional CZK80.0bn to keeping the deficit as approved. In any case, the provisional budget regime, in which a maximum of one-twelfth the previous year’s budget can be spent per month, is likely to be implemented in the first few months of 2026, as was the case after the 2021 election. This could limit pressure to increase the issuance pace in the coming months due to the state budget deficit widening in 2026.

Market situation: CZK market interest rates and CZGB yields have been declining for several sessions, reflecting a risk-off mood in core markets. On the Czech data front, the September PPI was softer than expected, with a 0.4% mom decline that deepened the yoy decline to 1%. Thus, both consumer (see the latest CPI report here: https://bit.ly/CPI_Sep25_EN) and producer price dynamics continue their disinflationary trend. Earlier this month, Czech industrial production decreased by 1.1% mom in August, with manufacturing sliding by 1.3% mom. This marks the fourth consecutive mom decline in manufacturing production. These figures suggest that the momentum of the Czech economy is deteriorating in 3Q25, and the industry’s contribution to the qoq dynamics of GVA is likely to turn negative. Overall, the actual economic developments are worse than the relatively optimistic CNB’s forecast, which anticipated an increase in qoq GDP growth in 2H25.

Rates outlook: We expect the GDP dynamics to decline in 2H25 and inflation to confirm its downward trend towards 2%. However, given the risk of fiscal easing, our CNB call is under revision now.

According to its 3Q25 presentation, Moneta achieved a 17.9% yoy increase in net profit to CZK1.8bn. This figure is +8.1% higher than the market consensus. RoTE reached 25.6%. These results surpassed market expectations primarily due to increased net interest income, higher NF&C, stable operating costs, and a lower-than-expected CoR. The increase in net interest income is due to a significant decline in financing costs. Moneta has once again delivered strong results and is on track to meet its increased full-year targets.

According to its 3Q25 presentation, Moneta achieved a 17.9% yoy increase in net profit to CZK1.8bn. This figure is +8.1% higher than the market consensus. RoTE reached 25.6%. These results surpassed market expectations primarily due to increased net interest income, higher NF&C, stable operating costs, and a lower-than-expected CoR. The increase in net interest income is due to a significant decline in financing costs. Moneta has once again delivered strong results and is on track to meet its increased full-year targets.

Net interest income for 3Q25 reached CZK2.5bn, marking a yoy increase of +7.9%. This growth was primarily driven by a substantial decrease in the cost of funding customer deposits (-21.2% yoy). The net interest margin increased from 1.9% to 2.0%. NF&C grew thanks to the successful sale of investment products, reaching CZK859m, which is a +13.9% yoy increase. This figure is +3.5% above market estimates. Operating expenses remained virtually stable yoy at CZK1.3bn (+0.2%). Operating profit for 3Q25 reached CZK2.2bn, a +15.0% yoy increase. This figure exceeded market consensus by +4.4%. Risk costs are low at CZK74m, corresponding to only 10bps. This is due to strong payment discipline and updated macroeconomic data (GDP and unemployment). The ratio of NPLs fell to a historic low of 1.1%. The effective tax rate was 15.2% (compared to 14.9% in 3Q24). Net profit for the third quarter of 2025 reached CZK1.8bn, representing significant yoy growth of +17.9%. This corresponds to RoTE of 25.6%. This is due to a combination of higher operating income, stable costs, and significantly lower CoR.

The loan portfolio grew by +6.3% yoy to CZK 288 billion. The retail loan portfolio grew mainly due to mortgages. In the commercial portfolio, loans to sole traders and small businesses increased. Deposits grew at a rate of +3.1% yoy to CZK 458 billion.

Moneta's capital adequacy ratio is 19.97%. Moneta's excess capital above the management target (15.25%) is CZK7.8bn.

Full-Year 2025 Guidance: Moneta reiterated its updated projections for net profit, which are now in the range of CZK6.3-6.4bn. Total revenues are expected to reach CZK13.8bn, surpassing the original outlook of CZK13.6bn. Operating costs are expected to total CZK5.8bn. CoR are expected to be between 17.5 and 22.5bps, which is the midpoint of the original target range.

The reported figures for 9M25 represent 74.8% of revenues, 72.5% of costs, 76.5% of operating profit, and 77.2% of net profit compared to the full-year target. The cost of risk for 9M25 is 16bps.