MONETA Money Bank has signed a framework agreement with Czech financial group PPF to acquire Air Bank and other assets from the latter for CZK25.9bn ($1.21bn) in a cash-cum-stock deal.
The other assets involved in the deal are the Netherlands-based loan provider Home Credit’s Czech and Slovak businesses and peer-to-peer lender Benxy.
MONETA Money Bank, which is a Czech financial institution, said that the deal will help create a leading retail bank in the country. Furthermore, the deal is expected to speed up its overall growth.
In 2018, the bank had signed non-binding memorandum of understanding (MoU) to acquire Air Bank and Home Credit’s Czech and Slovak businesses. However, the proposed deal collapsed at that time.
The company said that combination will pave the way for a publicly listed retail challenger bank that can tap into its huge customer base for future growth. The combined entity is also expected to be equipped with capabilities to compete successfully with the current market participants.
The combination of the entities will create a top player in a consumer lending market in the Czech Republic, said MONETA Money Bank.
The bank will increase its branch network to 187, which will be strengthened with the addition of 33 Air Bank branches. It will have more than 900 ATMs.
MONETA Money Bank will be supported by 2,000 point-of-sale retail partners of Home Credit and also Benxy’s digital distribution platform.
MONETA Money Bank’s management stated: “The proposed combination will materially increase the size of both balance sheet and operating income generation capacity. Equally importantly, the combination will present opportunities to improve commercial activities with respect to a larger customer base.
“Additionally, the combination will deliver opportunities to rationalise and improve the overall efficiency of the combined bank at a time when the Czech banking sector´s profitability declined considerably due to the recent COVID-19 pandemic.”
The consideration to be made by MONETA Money Bank comprises a cash payment of CZK2.59bn ($120m) and issuance of 291.3 million of its newly issued shares, each valued at CZK80 ($3.76), with a total worth of CZK23.31bn ($1.1bn).
Upon completion of the deal, PPF Group will have an estimated stake of 55.38% in MONETA Money Bank. This includes the stake of 29.94% currently held by it in the latter.
The deal is expected to close by October 2021, subject to the approval of MONETA Money Bank’s shareholders, regulatory approvals, and other conditions.
