Ladies and gentlemen, welcome to the conference call of MONETA Money Bank regarding full year 2025 financial results. Please note that this conference call will be recorded. This event will have a live presentation, followed by a Q&A session. As a reminder, all participants will be in a listen-only mode. Today's speakers are Mr. Carl Normann Vökt, Mr. Jan Friček, Mr. Jan Novotný, and Mr. Andrew Gerber. May I now hand over to Mr. Vökt, who will lead you through the conference call. Sir, please go ahead.
All right. Thank you very much. Good morning, ladies and gentlemen. I have the pleasure to present to you MONETA Money Bank's 2025 financial results. Before we start with the presentation, I would like to apologize on behalf of our CEO, Tomáš Spurný, who cannot attend this call this morning since he contracted the flu and, for that reason, had to stay at home. So that said, we start on page 2 with the key highlights of our last year's financial performance. Let me start with the operating income, which came in at CZK 13.9 billion. It's an increase of almost 8% year-over-year, both driven by a strong growth in the net interest income and the net fee and commission income in both segments.
If you look at the operating expenses, this remains a challenge throughout the year, but I think the fact that it grew by only 2% shows that we kept costs pretty much under control. As a result of that, the cost-to-income ratio even further improved by 2.4 percentage points to a tick below 42%. This allowed us to generate a net profit of CZK 6.5 billion. It also means we outperformed the initial guidance that we published in January last year by half a billion Czech crowns, and this constitutes an increase of almost 12%. Looking at the balance sheet, here, we saw a growth of almost 2%, reaching a level of CZK 505 billion Czech crowns.
The contribution of the growth came both from lending and also increases in the funding base. The loan portfolio reached a level of CZK 292 billion, or almost 6% expansion, and the funding base showed an increase of 2.5%. If you go to the next page, here on page 3, we have the capital ratios and information on the returns. So let me start on the top left. The CAR, the capital adequacy ratio, reached a level of 18.7%, which constitutes an excess of 3.4 percentage points above the relevant capital management targets which we have in place. The Tier I ratio, 14.1%, and the MREL ratio, 27.5%, which is an excess of 5.2 percentage points.
In terms of dividends, so on the back of the net profit and the strong capital ratios which we display here, we intend to propose a dividend of 11.5 CZK per share, or an absolute amount, CZK 5.9 billion. If you look at the total shareholder return, constituting the appreciation of the share price and the net profit, then we generated a total shareholder return of an excess of 70%, in 2025, compared to 48% that we recorded in 2024. In terms of the return on tangible equity ratio, here we saw a significant increase of three percentage points, reaching a level of 23.4%.
If we move to the next page, this shall illustrate the variances of our actual results versus the initial guidance back in January 2025. Obviously, the most important is the over-delivery of the net profit, or 8.4%, from CZK 6 billion- CZK 6.5 billion. If you look at the individual lines on the PNL, the key driver obviously was the total operating income, which came in better by CZK 300 million or 2.4%. OpEx, we kept very much under control and we overperformed, as such, contributing CZK 100 million to the results. Cost of risk ultimately came in on the bottom of the provided updated guidance of 15-35 basis points, since the cost of risk only amounted to 16 bps.
In absolute amounts, meant CZK 300 million on top, supporting the process. The last one, obviously, earnings per share. 11.7 in the guidance, 12.7 now based on the actual results, which means 1 CZK more or 8.4%. The return on tangible equity also outperformed our guidance by 18% or three percentage points, and then we ended up with 23%. Now, to put the results a little bit into perspective, what was the environment we were operating in last year, looking at the macro? To start with, obviously, the most important thing is the GDP, which came in slightly better than initially assumed, and much better than what we had in 2024.
So the forecast is 2.5% for last year compared to 1.2% in 2024. Unemployment rate, a very important variable for our retail unsecured lending franchise. We always look very careful at these numbers. Yes, they have been increasing steadily, but from a very, very low level, and there's a 2.9%, that is the latest data which we have available. It is still a very moderate number, and also you will see it on the later pages. We do not expect the rate to significantly go beyond that level in future periods. In terms of government debt, that also has been on the rise, steadily.
The latest number, 43.3% government debt as a percentage of GDP, but still well below the average of the 20 countries within the Euro Area, which show a value of 87%. The state budget deficit has been increasing year-over-year from CZK 271 billion- CZK 291 billion. The latest number we are aware of for 2026, the state deficit, budget deficit of CZK 310 billion. So this would mean another increase by around CZK 20 billion year-over-year. On the second page of the macro, here we show a bit few more details on the inflation, since it is a key driver of, obviously, for the Czech National Bank to consider for their considerations on the interest rates level.
So either you look at inflation or CPI, both levels still are above the Czech National Bank's targets, so at the level of 2.1% and 2.5% respectively. The key contributors for the inflation numbers or the values in December continue to be food and beverage, F&B, housing, energy, and anything what people do in their free time related to recreation, restaurants and hotels. So these are the main driver of the latest inflation numbers. The two-week repo rate is very important. I mean, it has been flat since May last year. As a matter of fact, the Monetary Policy Council will meet this week on Thursday to decide on the new rates, and the current expectation is that remains that the rate remains unchanged.
Yeah, I think that would conclude my short introduction, and with that, I would hand over to Andrew to share with you the latest on the operating platform.
Thanks, Normann. Good morning, ladies and gentlemen. So moving to page 9, we look at the overall operating platform of the bank, which consists of our digital channels, our branch network, the contact center, and of course, the ATM network. Overall, the bank served at the end of 2025, 1.6 million clients, which was broadly flat year-over-year. Our branch network stood at 122 units. This is down 2 year-over-year, as we continue to rationalize the locations that we operate. The shared ATM network that we operate with three other banks stood at 1,942 machines, which is broadly stable, and it's the second-largest network in the country.
In terms of the employment base of the bank, we have 2,469 FTE on average during 2025. This is 1.9% lower year-over-year. Looking specifically at the front office employees, we have 1,313 FTE, down 4.7% year-over-year. This reflects our continued focus on the efficiency of deployment of resources, specifically in the front office. You see the number of employees in other positions, non-front office employees, 1,155 FTE, up 1.6% year-over-year. Moving to page 10, we look specifically at the digital platform of the bank. This really consists of four key assets.
One is the primary website, moneta.cz, a dedicated mortgage lending website, hypoteka.cz, and then the two digital banking applications, Smart Banka for mobile and Internet Banka for desktop users. Overall, the digital platform users by the end of the year stood at 1.6 million. This is up 8.3% and brings us very close to our target of 100% penetration of the client base with digital channels. We had 720,000 daily visits on average during 2025. This is 5.3% higher year-over-year. And in terms of payment transactions, we saw 79.3 million, up 8.4%. We granted CZK 28 billion of new loans through the digital platform, up 43.3% year-over-year.
This reflects both general improvement in demand for lending, which you will see later on in the presentation, but also increased penetration of increased share of digital in lending that we're granting. In terms of sales transactions, we made 483,000 sales transactions, 2% higher, and servicing transactions, 23.4 million, 1.5% higher. Moving to page 10, we look at the branch network. As I said, we had 122 branches, 1,054 FTE deployed in the branch network. We continued to achieve very high levels of client satisfaction, with NPS standing at 90, up 9.8% year-over-year.
We continue to see decreasing branch visits down 15.4% year-over-year, as clients continue to shift much of their daily banking activity into the digital banking applications. In terms of third party product distribution, we sold 167,000 units. This is down 10.4% year-over-year, with the decline driven by primarily by two insurance products, which was a function of the focus we put on the network in order to achieve the broader set of targets, and we'll see some detail on this later in the presentation. We granted CZK 48.2 billion lending via the branch network, up 12.1% year-over-year. Moving now to page 12, we look at the contact center.
The contact center deals with five main types of communication: telephony, email, web, chat, and social media. We handled 774,000 inbound calls. This is 2.1% lower year-over-year. In terms of numbers of staff, we had 221 staff members. This is 9.4% year-over-year as we increased the staffing in some areas to focus on improving customer service. And again, we achieved very high level of customer satisfaction, with NPS standing at 80, up 14.3% year-over-year. We answered 94.8% of calls. This is 1.3% higher year-over-year. And we handled 136,000 pieces of email communication, which was down 18.3% year-over-year.
And finally, in terms of insurance sales, we generated CZK 1.64 million in lifetime income, which is 6.4% up year-over-year. And finally, on page 13, we look at the ATM network. As I said, the network stood 1,942 machines, of which 812 are now deposit ATMs, roughly 41% of the network. And our own ATM networks to the 561 units, which is stable. In terms of usage of the network, we see a decline, 7.5% year-over-year decline in withdrawal transactions as the market continues to move away from cash.
At the same time, the expanded deposit capability led to 22.1% growth in deposit transactions on the network, as we continue to move deposit transactions away from cash desks and onto the machines. And finally, in terms of service transactions, we saw 3.2 million, which is a growth of 7%. Again, encouraging clients to move away from the physical branches for these types of transactions. So that concludes the operating model section, and with that, I will hand over to Jan, who will take you through the profit and loss development.
Thank you, Andrew. Good morning, ladies and gentlemen. I'm now on page 15. It's my pleasure to walk you through the net profit, profit and loss statement section. Let me repeat the key financials. In 2025, MONETA delivered net profits of CZK 6.5 billion, representing year-on-year growth of 11.9%. Earnings per share reached CZK 12.7, and return on tangible equity, 23.4%, representing three percentage points improvement year-on-year. Operating income stood at CZK 13.9 billion, which represents year-on-year growth of 7.8%, and this was delivered on the basis of net interest income growth of 8.8%, stemming from higher lending income and the reduced cost of funding.
Also net fee and commission income line shows a year-on-year improvement of 11.1%, driven by ongoing solid performance in distribution of wealth management products and lower fee expense. On the other hand, other income line shows a decline, which is attributable to a lower result of FX derivatives. On the cost base, we report a marginal growth of 2%. Predominantly, higher costs were incurred in personnel area and IT area. However, 2% operating expenses growth together with the operating income growth of 7.8% resulted in a significant improvement of the cost-to-income ratio to 41.9%. On the cost of risk side, we report the benign result of CZK 444 million, or 16 basis points on the average loan portfolio.
Moving forward, on page 16, we provide a detailed analysis of the net interest income development. In the fourth quarter, we delivered year-on-year growth of 1.4%, despite a marginal decline by 1% against the third quarter, which is attributable to intense competition on the deposit market. If you look at the drivers of the year-on-year growth, let me start on the top. We achieved lending interest income growth of CZK 195 million, supported by loan portfolio expansion of 5.8%. And also a lower interest rate environment enabled us to gradually reprice our deposit base down, which resulted in a cost of funds that decreased by CZK 250 million. On the other hand, lower interest rate environment resulted in a drop of treasury income by CZK 400 million.
On page 17, we can continue with a similar analysis of net fee and commission income. In the fourth quarter, we delivered a year-on-year growth of 7.5%, and also 1.9% improvement against the third quarter. If you look at the individual categories, third party commission income remains broadly stable year-on-year. However, we improved performance in distribution of wealth management. This was compensated by a decline in distribution of insurance. Fee income went up marginally, predominantly supported by higher penalties. Fee expense decreased since the beginning of 2025, resulted from renegotiated commercial terms with Visa. On page 18, we provide a detailed view on our performance in distribution of wealth management.
As you can see in the top left corner, in 2025, we delivered nearly CZK 900 million of commission income, up by 21% year-on-year, and this was predominantly supported by higher trail fee by 31%. Somewhat resulting from the significant 33% expansion of the outstanding amount of distributed wealth management products. Also, opening fee went up by 6.7%, reaching CZK 318 million, despite the 5%, nearly 5% decline of distributed volume. I'd like also to point it out, that in 2025, we successfully expanded the network of investment specialists from 48 to 67 investment bankers, in order to strengthen our distribution capacity on the market, where we project a significant growth potential in the future.
On page 19, we can go, we can comment on the development in the insurance product distribution. In 2025, we delivered a commission income of CZK 1,146 million, which represents a marginal 2.2% decline year-on-year on the recurrent basis. And this is attributable to lower number of sold insurance products by 3.3%. If you look at the performance in the individual product categories, first of all, we improved the performance in distribution of payment protection insurance by 6.6%, and we maintained a stable, slightly improving performance in the life insurance product distribution. However, the commission income from the life insurance was negatively impacted by elevated amount of commission clawbacks, due to a higher number of contract canceled contracts.
In terms of the pension insurance, we distributed by 13% less contracts in 2025 than in 2024, despite improved performance in the second half of the year. On page 20, we can continue with the cost base analysis. As mentioned before, the cost base increased marginally by 2% year-on-year, reaching CZK 5.8 billion. This is below our original budget of CZK 5.9 billion. And if you look at the individual categories, regulatory charges went down by 9.7%, and also depreciation, amortization, and amortization charge decreased by 5.1%. On the other hand, admin costs increased by 6% or by CZK 100 million, predominantly due to incremental costs incurred in the IT area.
Personnel cost is the second increasing category, up by about CZK 100 million or 3.9%, due to higher sales incentives paid to the front line, resulting from improved sales performance, and also increase of the average salary, only partially mitigated by a reduction in the number of employees by 109 expressed in the FTEs number. On page 21, we added a new slide analyzing our cost performance over last 5 years. If I start with the Personnel costs on the left, Personnel costs grew by 2% annually in average, and this is a function of a persisting pressure on the wages, on the wage inflation.
Only partially mitigated by a gradual reduction of number of employees, from more than 3,000 in 2021, to less than 2,500 in 2025. If you look at the admin cost category on the right, this category grew by 2.2%, but the vast majority of incremental costs were incurred in IT, on the migration to cloud, on strengthening our cyber risk protection, and also on digital platform development. On page 22, we conclude this section with depreciation and amortization category. There we achieved 0.7% annual reduction, which is a function, or this, this is in line with broadly stable development of fixed asset position.
Out of that, intangible assets went down due to ongoing investments into the digital, platform development and, also IT infrastructure. On the other hand, tangible assets went down, in line with our gradual reduction of a number of branch units. And, now, that's all for the profit and loss statement section, and I will now hand over to Andrew, who will continue with the balance sheet development. Thank you.
Thank you, Jan. So moving to page 24, we take a high level look at the development of the loan portfolio and the funding base of the bank. Overall, the loan portfolio grew 5.8% year-over-year, 1.4% in the fourth quarter, reaching CZK 291.8 billion, driven by a strong rebound in new lending performance. At the same time, the loan portfolio yield decreased 5 basis points year-over-year, reaching 485 basis points. This is driven by gradual repricing of the floating rate part of the commercial portfolio, partially offset by upward repricing of the mortgage portfolio as that moves through refixation.
Looking at the funding base, we grew 2.5% year-over-year, 1.2% in the fourth quarter, reaching CZK 463.7 billion. And at the same time, we saw the cost of funding decrease 83 basis points to 216 basis points, as we gradually repriced the deposit portfolio in response to the lower repo rates in the market. Moving to page 25, we take a look at the balance sheet overall, which expanded by CZK 9.5 billion due to expansion in the deposit base. On the left-hand side, on the assets side, you can see that the growth predominantly went into net customer loans, up 5.7%, and investment securities, up 3% year-over-year.
And on the liability side, as I said, you can see that the growth is driven by growth in customer, customer deposits, up 2.5%, year-over-year. Moving to page 26, we look at the new lending performance. New lending volumes were up 22% year-over-year due to improved demand in both the retail and the commercial segments. Retail new lending was up 20.6% year-over-year, driven by strong performance in mortgages, up 22%, and consumer loans up 19.7% year-over-year. The commercial segment showed slightly faster growth, up 23.8% year-over-year, with small business growing particularly strongly at 31.4%, and SME up 21.2%. Also very strong, very strong performance.
On page 27, we see that the new lending volume translated into 5.8% growth, sorry, in the loan portfolio. Looking at the segmental split, you see retail up 2.4%, while small business growing very strongly at 26.1%, and the SME portfolio also strongly at 9.5%. On page 28, we look more closely at the retail loan portfolio, where we see that the mortgage portfolio was up 2.8%, while the consumer loan portfolio is growing more strongly at 6.6%, as we saw a rebound in demand for consumer lending, okay, consumer loans. Again, the other loans category down 12.8%.
This is driven primarily by the runoff of the bridging loans portfolio, which is a legacy portfolio that we're no longer originating to. On page 29, we take a similar view of the commercial portfolio, where you can see the growth was strongly supported by investment loans, up 14.3%, and small business loans up 26.1%, again, as we saw more demand for these products across the market. And finally, moving to page 30, we take a look at the development of the yield of the loan portfolio.
The yield overall was stable at 4.9% year-over-year, with the improvement in retail to 4.4%, driven predominantly by gradual repricing of the mortgage portfolio as it moves through refixation, while the commercial portfolio decreased to 5.7%, driven by repricing of the floating rate part of that portfolio. So overall, I'd say a solid year for lending. We of course would have liked to have grown a bit faster, but we continue to see relatively intense competition in a number of segments. And we continue to carefully balance our growth ambition against the type of profitability that we think is appropriate in these business lines.
That concludes the asset side, and I'll now hand over to Jan, who will take you through the liability side of balance sheet.
Thank you very much, Andrew, and good morning, ladies and gentlemen. Please let me continue with the overview of our deposit position and its development. On page 31, we are showing the evolution of the overall customer deposits and wholesale funding.
... We have reached almost CZK 464 billion at the end of Q4, which represent a solid growth of 2.5%. You can see also the split by segment, with 2.2% growth in retail, 3.3% in commercial, and 3.2% in wholesale. On the next page, page 32, we are showing the evolution of the customer deposit and funding cost by each month of 2025. What is visible here is the successful management of the deposit repricing enabled significant improvement of the net interest margin. This is depicted in the bottom chart on this page. Now, moving to an even better story, on the page 33, we are showing the evolution of the combined deposits and assets under management position.
You can see that the combined value has reached CZK 410 billion, meaning that on the top of the solid deposit growth, we have added almost 33% of growth management programs, resulting in overall growth of the combined category by excellent rate of 7%. On the next two pages, pages 34 and 35, we are splitting the customer deposits per product. On the page 34 is the retail deposits, with overall 2.2% year-on-year growth, and on the page 35, the commercial deposits with year-on-year overall growth on a rate of 3.3%. Now, let's move to the last page of this section, page 36, where we have prepared sort of a DuPont Tree for the evolution of the cost of funds.
In last 12 months, we have decreased the average cost of funds by 20-35 basis points, which is driven by customer deposits down by 0.29%, as shown in the chart in the middle of the page. On the right side, you can see the evolution per segment, with retail ending up at a level of 2.11% and commercial at 1.52% at the end of 2025. That was the last page of the balance sheet development section of the presentation. Thank you very much for your attention, and please let me hand over back to Normann.
All right, thank you, Jan. This takes us to the risk section on page 38, with an overview of key risk metrics for 2025 compared to 2024. Let me start on the top left. So cost of risk came in at 16 basis points last year, which is a 2 basis points increase year over year. Loan loss provision coverage dropped from 1.45% to 1.24%. The key driver for the drop are the NPL sales and also releases on the management overlays. And the total NPL loan coverage stood at a solid 122.1%. And the NPL ratio dropped from 1.3% by 30 basis points to 1%, which is an all-time low we have recorded at Moneta.
Moving to page 39, here we have a more granular view on cost of risk. So in absolute numbers, the 16 basis points translate to CZK 444 million, compared to 386 back in 2024. Now, the last year's results was supported by various elements. One is the NPL team, where we disposed around CZK 1.3 billion of NPLs, generating a pre-tax gain of CZK 115 million. Moreover, we did releases of the management overlay throughout the year, adding another CZK 246 million. And last but not least, we also did some adjustments within our IFRS 9 model in the year, which supports the cost of risk time.
On the next page, page 40, here we have five data points each for the loan portfolio, provisions, coverages, and NPLs. Again, let me start on the top left. The gross loan receivables increased by more than CZK 15 billion year-over-year, or 5.5%. At the same time, loan loss provisions dropped from CZK 4 billion to CZK 3.65 billion, which is a drop by around CZK 400 million. The ending balance of CZK 3.65 billion still includes management overlays of CZK 148 million, which dropped from almost CZK 400 million to the current level. The loan loss provision coverage I touched upon before, and the stock of NPLs decreased year-over-year by CZK 570 million, with an ending balance a tick shy of CZK 3 billion.
Then we can move to the next page, page 41. Here we have an overview of NPL in and outflows since December 2024, that we just concentrate on the, on the far right of the page Q4 of 2025. Basically, what we see here, we saw a drop of NPLs by CZK 200 million quarter-over-quarter. This was basically driven by a lower amount of NPL formation and the debt sales, which we contracted. This takes us to the last page of the risk section, the page on delinquencies, 30, 60 and 90 plus. I think the charts themselves are explanatory, and simply shows that the delinquencies remain to be on a very low level and oscillate within a certain corridor up and down, since more than three years, basically.
To summarize the risk section, I think, I think we can say, credit performance with the cost of risk of 16 basis points was solid, and was not only well within the guidance, but it was on the bottom end of the provided guidance of 15-35 basis points. With the management overlays we have conducted last year, the ending balance of CZK 148 million, these are earmarked for potential risks stemming from the refixation of residential retail mortgages. So should these risks not materialize throughout the year, then the assumption is that we would gradually relieve those overlays and supporting the cost of risk line overall. Obviously assuming that no other material risks materialize, either on the commercial front or any changes on the macro.
That would conclude the risk part, and I think this takes us to liquidity.
Yeah. Thank you, Normann. Ladies and gentlemen, I'm now on page 44, and we'll continue with the liquidity management. During the whole of 2025, Moneta maintained a robust and stable liquidity position, which is demonstrated across all our ratios on the page, namely loan-to-deposit ratio in the top left corner, showing 66%, broadly stable year-on-year. And share of high quality liquid assets on, on customer deposits also remained stable at 40% at the end of 2025. Still that we report the regulatory ratios, liquidity coverage ratio, and the net stable funding ratio, both are significantly above the 100% regulatory limit. Moving forward, on page 45, we report the development of high quality liquid assets position.
Year-on-year, we report the decline of 6.7%, while still the CZK 174 billion of high-quality liquid assets at the end of 2025 represent a significant excess of liquidity. The decline is visible in the category balances at the central bank, and this has three drivers. First of all, CZK 8 billion of liquidity were reallocated to cover higher mandatory reserves since beginning of 2025. Secondly, second portion of liquidity was utilized in loan portfolio expansion. And thirdly, the remaining portion was invested in government bonds, which is visible in the increase of the position in the government bonds. Now let me move forward to capital management section, starting on page 47.
Also, capital position remained solid and robust, demonstrated by Capital Adequacy Ratio of 18.7% against the management target of 15.40%. Also, Tier 1 capital adequacy stood at 14.13% against the management target of 12.5%. In absolute amount, the excess capital stood at CZK 5.7 billion, which is up by 2.5% year-on-year. Out of that, the distributable portion of Tier 1 capital stood at CZK 2.7 billion, which represents more than 5 CZK per share.
If you look at the chart in the bottom corner, you can see that the expected dividend stream, which includes the expected dividend of 11 CZK per share, 11.5 CZK per share or CZK 5.9 billion, is up by 19% if compared to the dividend stream relating to 2025. Moving forward, on page 48, we provide more detail to the capital position on consolidated level. The total capital in absolute amount stood at CZK 13.8 billion, broadly stable year-on-year. While risk-weighted asset density significantly improved from 35% to 32.6%, resulting from successful implementation of the CRR3 at the beginning of 2025.
This also resulted in the risk-weighted assets decrease from CZK 173.5 billion-CZK 164.8 billion, despite loan portfolio expansion by 5.8%. Below that, the excess capital development or the chart with the excess capital development clearly shows that on the top of the excess amount, we hold accrual for the dividend distribution of CZK 5.9 billion. We conclude this section on page 49, with the capital position on the individual level. The capital position end up in absolute amounts to get CZK 44.4 billion, again, broadly stable versus 2024. The similar trend as I commented on a consolidated level is visible on the risk-weighted assets and density development.
More importantly, the cost-to-income ratio stood at 27.5% at the end of December 2025, which is by 5.17% above the our management target. That's all from the capital management section, and I will now hand over to Normann for the market guidance and final remarks. Thank you very much.
All right, Ondra, thank you very much. It takes us to page 61, I guess? So on that page, we show you the updated guidance compared to what we had provided you back in January 2025, covering the period 2026 to 2030. In a nutshell, what we aim to deliver here is a cumulative earnings per share of north of 72 crowns, which translates into a growth of 5.9%. If we look at the individual lines of the PNL, starting with total operating income, so for 2026, we expect total operating income of CZK 14.6, and then moving up to CZK 17.5, which translates into a CAGR of 4.6%.
Total operating expenses, CZK 6 billion in 2026, and then moving up to CZK 6.5 billion, or a CAGR of 2%, which I consider as fairly moderate, so this is certainly aspirational, and we are confident to be in the position to deliver under that. Cost of risk, the outer years here, we have not changed the guidance. We left the corridor of 25-45 basis points, but we narrowed the corridor for 2026, and here, anticipate the guidance of 20-35 basis points. Now, all that together will translate into a net profit of CZK 6.6 billion this year, and then going up to CZK 8.3 billion in 2030, which constitutes the 5.9% increase I mentioned before.
In terms of earnings dividend per share, obviously the growth rate remained the same, but the earnings per share, CZK 12.9, and dividend per share, CZK 11.6 in 2026, and then moving up to CZK 16.2 and CZK 14.6 per share. ROE, here we would expect a further increase by two percentage points over the period from 23% in 2026 to 25% in 2030. Moving to page 52. Here, what we're trying to do is to show what was the aggregate of net profits based on the previous market guidance, which we published in January 2025, and today's guidance. So, the last one anticipated CZK 27.3 billion net profits. The current one, CZK 28.8 billion, which constitutes a 5.5% increase.
Likewise, the ROE, if you just compare the base year, 2026, from the previous guidance of 20%, now we would move up to 24% in the year 2029. And then more importantly, on the next page, I think this illustrates the net profit generation capacity and the variance compared to the last five years period, comprising the years 2021 to 2025. So based on the actual numbers, we generated a net profit of a tick shy of CZK 27 billion. For the future five years, 2026 to 2030, we anticipate, based on the guidance, a net profit of CZK 37 billion, or almost 40% increase, which is the equivalent of almost CZK 10.5 billion Czech crowns.
If we look at a couple of assumptions, which I think is very important to understand, we have made to get to this new guidance. Let me go now to page 54 on key macroeconomic assumptions for this plan. Obviously, we anticipate solid GDP growth, more or less similar to what we expect to have seen in 2025, so somewhere in the corridor, anywhere between 2.4%-2.5%. Unemployment rate, I said earlier, a very important ingredient to anticipate the loss potential on our credit portfolio in the retail space. Also here, we believe no further increase beyond what we have seen to 2026. It would peak at 3% and then stay flat on the level of 2.9%.
Inflation, 2.2 in 2026, 2.5, 2027, and then down the road, 2%. And the repo rate, I think is one of the most important assumptions we have made here, would remain flat, throughout the period of guidance, and the exchange rate, would also remain unchanged to the levels we are currently seeing. Can we move to the next page, page 55, just to give one more level of details on the assumptions on the loan portfolio. So overall, non-performing loans are expected to grow by a CAGR of 6.1%. This means around CZK 100 billion increase during the period.
The key growth driver is here, commercial, which will contribute around two-thirds of the growth during that period, or a CAGR of 10.2%, while the retail franchise, lending will support the growth by around one third or 3.5%. On the other hand side, the customer deposits, here we have a reverse, sort of development on the between retail and commercial. So here, retail should be the growth driver, with a 3.9% CAGR and increasing deposits by CZK 70 billion during the period. And in commercial, we expect 2.4% growth from CZK 109 billion to CZK 123 billion. So I think this guidance, I think, is both aspirational and to some extent, also conservative, conservative, particularly in the year 2026.
Since in 2026 we are facing a couple of uncertainties we are confident we are going to manage, but, I think it's important to highlight them. One is the degree of retention of residential mortgages during the refixation period. We're having around CZK 37 billion of such mortgages to be refixed. Obviously, we try to retain as many as possible. We have bespoke retention tools for that, but there's always a degree of uncertainty, and I think it's important to highlight that. Number two, equally important is the view and the decisions to be made by the Czech National Bank on the two-week repo rate, as we assume a flat rate throughout the year.
So should there be any change, obviously, this would have an impact, at least on the short term, before we are in a position to fully reprice everything on the liability and exercise going forward. So that's something which we are going to observe very carefully. OpEx, I said before, challenging as in previous years, but I think we have the tools available to address that. And last but not least, on the cost of risk front, yes, we assume a benign environment based on the macro variables which we have shared with you. What we cannot tell yet is how the refixed mortgages will behave on the credit performance. That's why we still have this overlay in place, but assuming these risks will not crystallize, obviously they would support the cost of risk time.
In terms of revenue generation capacity, needless to say, we want and we strive to maintain the momentum on the new origination, originations, in particular in the retail unsecured space and also the small business space, which we have observed, particularly in the second half of last year. The first numbers of 2026 make me confident that we are on a good track, but this requires constant attention. The second pillar of our income, obviously, is our distribution, our distribution capabilities in the wealth management, but also on the insurance front, to ensure that we maintain the same momentum, and hopefully markets will allow us to distribute development and management products like we did in 2025. So that would conclude our presentation. Maybe two more housekeeping things on two events.
One is obviously the AGM, which we are going to have in April, on the 21st of April, where we intend to propose the dividends as was highlighted before. And number two, a few days later, on the 24th of April, we're going to have the Q1 earnings brief. So that would conclude our presentation, and I will hand over back to you for our Q&A session. Thank you.
Thank you. We will now begin today's Q&A session. If you would like to ask a question and have joined, please write it in the chat. Please write it in the chat in the browser or use the Raise Hand function on your screen. Before speaking, please make sure that your local device is unmuted. Once your question is answered, please cancel the Raise Hand function. If you have joined us via the phone, please press Star followed by One on your telephone keypad to enter the queue. Our first question comes from Thomas Unger. Please make sure that you're unmuted locally and proceed to ask your question.
Yes, hello. Good morning, and thank you very much for taking my question. I hope you can hear me well. Congratulations on the results. Thank you for the presentation. I'd like to ask you about your... You just were talking about the assumptions underlying your midterm guidance, and I'd like to go in somewhat more detail, if that's okay. The main change in the guidance that I see is on the total operating income, which was raised. I assume that this was a result of higher projections for the net interest income, and I'd like to ask you what caused these changes.
Was it mainly the repo rate assumption that you listed from 3.0 to 3.5, stable throughout the whole time horizon? Was it a change in the composition of the loan portfolio or loan growth or any other reasons? That would be my first question. My second question would be on the net interest margin near term. Where do you see it developing for the coming quarters? Was Q3 the bottom for the funding costs, for the interest expenses? And yeah, just in general, where do you see it developing? And then just one detailed question on the P&L in Q4.
The results from financial operations, maybe I've missed it, but it's been strong in Q4. What was the reason? What was the driver for that in this quarter in particular? Thank you.
... All right, thank you for the question, Thomas. I will take the first one, and the other two will be taken by Ondra. Now, as I mentioned during the guidance, the growth shall be driven by the loan growth. With that we have a CAGR of 6.1%, during the reporting period. And the key products here are clearly in commercial. More precisely, it's the small business loans which we want to grow, continue to grow the path which we have seen over the last couple of years, and we see continued strong potential in that segment.
Obviously, customer deposit repricing, this will not end, but, as you have seen from the numbers, it got more difficult towards the end of Q3 and Q4. Competition is there, and customers are more price sensitive and also more savvy in reallocating their funds in case you made premature steps and chapters. So that's why we couldn't significantly further reduce, actually we slightly increased the cost of funding in the last quarter. But we are confident that we can manage this going forward. The second pillar, obviously, fee income, wealth management being the number one. Now here, obviously, we can depend on the- we depend on the markets, markets, so this we cannot influence, but currently we assume markets will support our ambition to grow the segment further.
You have seen it in the number of advisors, which we have added in our franchise, so we have much more distribution capacity in that area, allowing us to reach our customers. So right now we are confident that this is possible, that we can deliver on the targets. Insurance, here the results in 2025 have been mixed. As you have seen, PPI is still very strong. We will pay more attention on life insurance and pension. And obviously also, we will see what we can do to reduce cancellation rates to support the income line on fees. So I would say it's a mix of all driving the growth, so it's not, it cannot be reduced to a single item, so it's a combination of all these aspects.
And we'll handle with you-
Yeah.
On the other two.
Yeah, yeah. So your second question was about the net interest, net interest margin projection. We ended up with the 200 basis points net interest margin, and we project improvements to 215 or between 215 to 220 in the next three years, gradual improvement. This will be driven by two main sources. First of all, a repricing of mortgages as was mentioned, about 45% of our mortgage book will go to the fixation point this year and the next year. And from that we expect to improve the yield on these mortgages next year by about 150 basis points. This year by about 150 basis points.
Next year it will be less; it will be about 50-70 basis points. So that's the first main reason, main driver. The second one is ongoing strong growth of the small business loan portfolio, specifically the secured part, where the position now is at CZK 20 billion, and we project it to double the position in the next 2-3 years. Then, your specific question was about the net income from financial operations development, or actually the increase in the fourth quarter against the third quarter. We reported a decrease of about CZK 90 million. This has two main drivers. The biggest one is the bond sale gain.
We realized a small disposal of our bond portfolio of about CZK 2.5 billion exposure, and we disposed this with a gain of CZK 50 million . And besides that, we also realized one-off gain on FX. We realized FX margin of 27 or CZK 30 million , around it also. These two, these two drivers were rather one-off, shouldn't be projected as a, as a new normal realized in 2024.
Thank you very much. Thank you very much for your answer. Can I just follow up with a question on your loan portfolio composition now moving more towards small business? Retail growth has been weaker in Q4. Mortgage balance is going back slightly. Can you talk a bit about the development on your mortgage portfolio?
Yes. The development of the mortgage portfolio is. We project a mortgage book growth between 3%-4% in the next 5 years. This is a relatively conservative growth potential. Our aspiration would be certainly higher. However, it is also a function of the margin that will be available to realize on the market. Currently, the competition intense in 2025, but quite significantly, margins narrowed down from 100-110 basis points to a corridor of 50-60 basis points at the year end, and with this profitability, taking this profitability into consideration, we are more aspirational on the loan portfolio growth in commercial segment than in retail.
Therefore, the composition of the loan portfolio over the next five years will be gradually changing, where the share of commercial exposures will slightly or gradually go up, while the share of retail portfolio will be going up. In total, loan portfolio is expected to grow at the north of 5%, as you saw in the guidance.
Right.
And this is reflected, as you've seen, it's also reflected that the growth on lending comes by two-thirds from the commercial segment. And so we are trying to really harness the opportunities which we see out there, in particular on the secured business loans, to grab as much market share as possible.
Right. Thank you very much.
Thank you. Our next question comes from Tim Baritol. Hi, why do you expect conservative growth in 2026 in terms of net income? Also, do you have any estimations as to extra dividend payments in 2026, like you did in 2025? Thank you.
Yeah. As I said, when I commented on the guidance that it's aspirational and conservative at the same time. So conservative, particularly as regards the year 2026, for the very reasons I presented to you, which is the mortgage fixation. The CZK 37 billion, which had to be refixed, so we try to retain as many as possible. Should we perform better than what we have in the plan, then obviously there's an upside, but this is still early to say, because this is a very dynamic market. The second one is the repo rate, where we assume a flat rate throughout the year. So any change, drops, I mean, change in terms of a drop, would be a risk.
So we, we have embedded here some conservatism in the plan, and that's the need to ensure that we can maintain the momentum on the lending front. We are confident we can do so, but, there's always a, a factor of uncertainty which we have also factored in. So to that extent, you can say, "Yes, it's conservative. Why is the growth not more?" But the growth is more compared to the last guidance provided back in January. Yeah. So this would explain the reason why we have the, the numbers presented.
Extraordinary dividend, so I think it's good. Yeah. On this topic, I don't want to speculate whether there will be an interim dividend this year, as we paid in the last two years. However, the fact is, we follow our capital management strategy to distribute any excess capital, if there is, even beyond the 90% dividend payout. At the end of 2025, our distributable excess of Tier 1 capital stood at CZK 2.7 billion, CZK 0.05 per share, as I mentioned, and we will get to the point to decide about potential dividend at sooner in the third quarter, as we did in 2025 and 2024.
What I would also mention, we are now in the very early stage in a consideration about the securitization part of our loan portfolio, where we see a potential on the capital front to release some capital and strengthen our excess capital position. But again, now it is quite early to speculate, and the fact is that capital position of Moneta remains robust and safe.
Thank you. As a reminder, if you would like to ask a question on today's call and you've joined us via Zoom, please use the Raise Hand icon on the bottom tab. Alternatively, you can type your question into the Q&A box. If you've dialed into the call, please press star followed by one on your telephone keypad. We'll pause for just a moment. It looks like we have no further questions in the queue at this time. So with that, I'll hand over to Mr. Friček for some closing remarks.
All right. So first of all, thank you very much for joining this call. Just wrapping up the call overall on our results, I think we can look back at a successful 2025. We clearly outperformed on our guidance on net profits by CZK 500 million, or 12%. I think we showed that we can reignite the engine on the lending. So lending volumes went up by 22% across all segments. Net fee and commission showed solid growth of 11%, wealth management was one of the key drivers, and we hope that we can continue that journey also this year.
Cost growth was moderate, despite all the headwinds we are seeing out there, both on the salary front and suppliers, but we kept it really under tight control, allowing us to deliver a very solid cost income ratio of 41.9%. Liquidity capital position remains strong. And last but not least, the intention to propose an 11.5 CZK dividend per share, leading to a total shareholder return of more than 70%, I think nicely round up two years, the 2025 results. I would like to thank the management team and, of course, our entire staff, not only for delivering results, but outperforming the guidance.
I would like to thank you, the audience, for attending this call, and we're looking forward to reporting out hopefully good results for our Q1 earnings call on the twenty-first of April. With that, I wish you a good remaining week. Thank you very much.
Thank you. This concludes today's webinar. Thank you all for joining. You may now disconnect from the call.