Prague bourse newcomer Moneta Bank slumps as GE sells shares at discount

By bne IntelliNews September 30, 2016

Shares in Moneta Money Bank fell to their weakest value in over a month on September 30 after GE Capital sold close to 25% in the Czech bank at a discount to the market price.

The US giant, which has been seeking to divest its Czech banking unit as part of its global pullback from the financial sector, floated 51% of the lender on the Prague Stock Exchange in early May. The surprise listing of the bank, formerly known as GE Money Bank, was viewed as a major test for the sleepy Czech bourse.

Following up the IPO, GE placed 125mn shares, equal to a stake of around 24.5%, in an accelerated book-build. The price of CZK75 (€2.78) per share was 6.6% lower than the stock’s closing price on September 29.Shares in Moneta Bank dropped 5.7% to trade at CZK75.75 as of 11:49am in Prague, the lowest value since mid-August.

However, the stock remained significantly above its IPO price of CZK68. Later in the day, the shares pared some of the losses to trade at CZK76.7.

“We consider the news positive because it lowers the risk of a large offering after the end of the original lock-up period at the beginning of November,” analysts at J&T write in a note. They, however, consider the announcement surprising given the still ongoing lock-up period (180 days) following the IPO in May.

Komercni Bank also sees the move as favourable, pointing out it "should support the liquidity of the shares." The deal leaves GE with a stake of around 18%.

Moneta is the sixth largest bank by assets in the Czech Republic. It has nearly 1.17mn retail and commercial customers (over 11% of the Czech population) and the fourth largest network of branches (229), many serving smaller cities and towns, where it sees a chance for making greater inroads.


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