The deal valued at CZK25.9bn ($1.1bn) was first announced in May 2021 and had sought to create “a strong Czech banking champion for entrepreneurs and retail customers in the domestic banking market.”
Now, MONETA will not proceed to buy the entire stake in PPF’s Air Bank, the Czech and Slovak arm of retail bank Home Credit and peer-to-peer lender Zonky.
“The termination agreement was prompted by macroeconomic changes which radically altered the parameters of the originally planned merger,” PPF’s statement read.
As per Czech National Bank’s recent decision, the countercyclical capital buffer will rise from the current 0.5% to 2.5%.
“This rise in the countercyclical capital buffer will drastically diminish the dividend capacity planned for the merged bank,” the investment group said.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
“The deteriorating macroeconomic and geopolitical situation, including the effects of the war in Ukraine, are significantly increasing economic risks regarding the newly formed banking entity’s asset performance,” it added.
In December 2021, MONETA received shareholders’ approval to issue new shares to fund the transaction with PPF after failed merger attempts.
As per the terms of the termination agreement, PPF, which owns a nearly 30% stake in MONETA, will not increase its ownership for at least 12 months but it can divest it to a potential strategic investor.
Earlier this month, PPF and its retail banking arm Home Credit signed a deal to sell their assets in Russia.
In doing so, the Czech investment group joined its European peers in pulling back from Russia after it invaded Ukraine.