GE Money Bank unveils IPO price range, renamed MONETA

Prague / Reuters

Czech lender GE Money Bank set the pricing range for its initial public share offer, potentially Prague’s biggest in eight years despite the valuation falling below some expectations, and said it would change its name to MONETA Money Bank.
GE Money, which is being sold by GE as the US group moves away from financial activities, said the price range would be 68-85 crowns per share, valuing the lender at between 34.75 and 43.43 billion Czech crowns ($1.5-1.8 billion).
Czech banks retained relatively strong balance sheets and remained profitable throughout the global financial crisis, with no lenders requiring bailouts.
Economic growth of 4.3 percent last year helped credit expansion but the low-interest rate environment, with official rates at 0.05 percent, has started to put pressure on margins.
Analysts had estimated the value set by the IPO of the country’s sixth biggest lender by assets would be 40-60 billion crowns when it announced its intention to float on April 11. GE Money said final pricing was expected on or around May 5.
The bank will offer 260.61 million existing shares, amounting to a 51 percent stake in the company, GE Money said.
It said it would maintain its policy of paying out a minimum 70 percent of profits in dividends, which, at that rate, would give the shares an initial yield of 7.3-9.1 percent based on 5 profits last year, above the 6.3 percent yield of Prague-listed lender Komercni Banka. GE Money’s net profit increased by 4.6 percent to 4.5 billion Czech crowns last year, giving a return on tangible equity of 16.5 percent.
“The pricing seems to be a bit more attractive on the lower end of the price range,” said Marek Janecka, Fund Manager at J&T Group. “It would be somehow comparable to KB and this would make this IPO more attractive.”
Another portfolio manager, who asked not be named, said the pricing looked to fall within expectations.
“My understanding is that the pricing would never be above Komernci,” the portfolio manager said.
GE Money said the offer would also have an over-allotment option to sell an additional 15 percent of the offered shares.
, exercisable within 30 days from the first day of trading on the Prague Stock Exchange.
The bank, which has more than 1 million retail customers, said it was also changing its name to MONETA Money Bank, rebranding its network of 229 branches, the fourth largest in the EU member country of 10.6 million people.
GE Money’s listing could have an impact on other share prices in the local sector, mainly Komercni Banka, which is majority-owned by Societe Generale, and to a lesser extent Erste Group Bank, analysts have said, as some investors reallocate their
investments.