MONETA Money Bank has reached a framework agreement for acquiring Air Bank, Home Credit’s Czech and Slovak businesses and Benxy (collectively Air Bank Group) for $1.2bn (CZK25.9bn), with an aim to set up a Czech retail bank champion.

The merger of four complementary businesses of MONETA, Air Bank, Home Credit and Benxy is said to create a ‘publicly listed, “critical size”, retail challenger bank’.

The agreement will see MONETA purchasing 100% of shares of Air Bank Group from PPF Group for CZK2.59bn in cash and CZK23.31bn through proceeds of 291.4 million newly issued MONETA shares at CZK80 apiece.

MONETA will make the CZK2.59bn cash payments using its surplus capital.

The transaction would raise the total number of shares issued to 802.4 million, resulting in a 36.31% dilution in current shareholder position.

Upon deal completion, PPF Group will have a stake of around 55.38% in MONETA

The merged group will focus on retail banking market activities and have a network of 187 branches, with the addition of 33 Air Bank Group branches.

The deal will also combine the one million customer base of Air Bank Group and MONETA’s 1.4 million client base to serve a total of 2.4 million customers.

MONETA believes that the deal will reinforce its position in the retail consumer lending market as well as enhance digitalisation speed with combined capabilities.

MONETA said that the demographic profile of Air Bank Group’s customers is ‘highly complementary’ and will fuel its growth in the medium term.

The deal is expected to complete in October this year, subject to regulatory approvals from both the Czech and Slovakia central banks. It is also pending approval from shareholders at a general meeting scheduled in June this year.