MONETA Money Bank announces Offer Price and listing on the Prague Stock Exchange

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION (DIRECTLY OR INDIRECTLY) IN OR TO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN. THIS IS NOT AN OFFER OF SECURITIES FOR SALE IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN.

This announcement is not an offer of securities for sale in the United States.  The securities to which this announcement relates have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act.  There will not be a public offering of securities in the United States.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT for the purposes of Section 36k of Czech Act No. 256/2004 Coll., on conducting business in the capital markets, as amended (the “Czech Capital Markets Act”) and Article 15 of EU Directive 2003/71/EC of 4 November 2003 regarding the prospectus to be published when securities are offered to the public or admitted to trading, as amended (the “Prospectus Directive”), and not an offer of securities for sale in any jurisdiction, including in or into or from the United States. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with any listing, offer or commitment whatsoever in any jurisdiction. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the prospectus (the “Prospectus”) intended to be published by GE Money Bank, a.s. later today on webpage investors.monetabank.cz/ipo-documents, subject to applicable securities laws. 

25 April 2016

GE Money Bank, a.s.

Initial Public Offering – Announcement of Price Range


Price range of CZK68.0 to CZK85.0 per share; implying a market capitalisation of CZK 39.1 billion at the mid-point of the price range

GE Money Bank, a.s. to be renamed MONETA Money Bank, a.s.

  • Following its announcement on 11 April 2016 of the intention to apply for admission of all its 511 million ordinary shares (“Shares”) to trading on the Prime Market of the Prague Stock Exchange (the “PSE”), (the “Admission”), GE Money Bank, a.s. (the “Company” and together with its controlled subsidiaries, the “Group”) today announces (i) the indicative price range for the intended offering by GE Capital International Holdings Limited (the “Selling Shareholder”) of Shares to institutional investors (the “Offering” or “IPO”) and (ii) the intention of the Company to publish later today its Prospectus.  The Selling Shareholder is offering 51% of the Shares, or 260.61 million Shares, with no primary offer of new Shares (“Firm Shares”).
  • In addition, the Offering shall incorporate an over-allotment option exercisable within 30 days starting on the first day of trading in the Shares on the PSE, of up to 15% of the Firm Shares to cover over-allotments or short positions incurred in connection with the Offering, if any.
  • The Offering is in accordance with the strategy announced by General Electric Company (“GE”) in April 2015 to sell most of its financial services businesses and focus on its industrial businesses.
  • The price range for the Offering has been set at between CZK68.0 and CZK85.0 per Share. At the mid-point of the price range this implies a market capitalisation of approximately CZK39.1 billion.
  • The Offering will consist of: (i) private placements in certain jurisdictions outside the United States in accordance with applicable securities laws and in reliance on Regulation S under the Securities Act; (ii) an offering within the Czech Republic and other European Economic Area member states to qualified investors as defined in, and in reliance upon, the exemptions provided by the Czech Capital Markets Act and the Prospectus Directive; and (iii) an offering within the United States to qualified institutional buyers as defined in, and in reliance upon, the exemption from the registration requirements of the Securities Act provided by Rule 144A under the Securities Act.
  • Each of the Company and the Selling Shareholder will agree to 180 day lock-up arrangements in respect of issuance and holding of Shares following Admission.
  • Final pricing is expected to be announced on or around 5 May 2016, with the commencement of conditional trading in the Shares on the PSE to begin on the following day. 

Goldman Sachs International, J.P. Morgan and Citigroup are acting as joint global co-ordinators and joint bookrunners to the Offering, with WOOD & Co acting as joint-lead manager and listing agent.

Tomáš Spurný, Chief Executive Officer of the Company, said: “We are pleased to be launching our planned IPO today after a strong initial response from institutional investors. In another important milestone towards becoming an independent Czech bank, we are today also announcing our new corporate name and brand, MONETA Money Bank.”

Full details of the Offering are included in the Prospectus, which will be available to eligible investors from today on webpage investors.monetabank.cz/ipo-documents

Enquiries:

GE Money Bank
Milada Veselá
milada.vesela@ge.com
+420 224 446 011 / +420 606 661 304

Czech Republic
Ogilvy Prague
Dita Stejskalová / Milan Kříž
dita.stejskalova@ogilvy.com / milan.kriz@ogilvy.com
+420 605 228 916 / +420 602 266 316

UK / International
FTI Consulting
Neil Doyle
Neil.Doyle@fticonsulting.com
+44 777 1978 220

GE Capital
Ned Reynolds
Ned.Reynolds@ge.com
+1 203 840 5075

Notes to Editors:

About GE Money Bank

The Group has two primary segments, retail and commercial. The divisions are differentiated by their product and service offerings, and customers are serviced by each division based on which of the Group’s products and services they utilise.

Total operating income and profit before tax for the retail division were CZK 8,595 million and CZK 4,128 million respectively for the year ended 31 December 2015. The retail division served approximately 1,068,000 customers and comprised CZK 53.7 billion net receivables in total as at 31 December 2015, representing 49.5 per cent. of the Group’s total net receivables. The key products in the retail division are as follows:

  • Deposit products: current accounts, savings accounts, term deposits and transactional banking products including payment services and debit cards;
  • Lending products: consumer loans, credit cards, overdrafts, mortgages and auto loans;
  • Leasing products: auto leases; and
  • Other complementary products such as bancassurance and sales of investment funds.

Total operating income and profit before tax for the commercial division were CZK 3,083 million and CZK 1,320 million respectively for the year ended 31 December 2015. The commercial division served approximately 69,000 active customers and comprised CZK 54.7 billion net receivables in total as at 31 December 2015, representing 50.5 per cent. of the Group’s total net receivables. The key products in the commercial division are as follows:

  • Deposit products: current accounts, savings accounts and term deposits;
  • Lending products: investment loans, operating financing loans and leasing products; and
  • Other complementary products such as domestic and foreign payments, insurance, treasury and trade finance products.

The Group’s total net receivables amounted to CZK 108 billion as at 31 December 2015. The Group generated profit after tax of CZK 4,506 million in the year ended 31 December 2015.

As at 31 December 2015, the Group’s CET1 ratio, calculated in accordance with CRD IV, was 17.7 per cent, before the Company paid a dividend of CZK 4.506 billion (including withholding tax) to the Selling Shareholder out of prior years’ retained earnings on 13 April 2016. This dividend comprised the Group’s full profit after tax for the year ended 31 December 2015 and therefore the dividend changed neither the regulatory capital nor the CET1 ratio of the Group.

Strategy

  • The Group’s strategy is to continue to focus on maintaining and further developing its retail banking franchise while also significantly growing its presence within the SME commercial segment.
  • The Group intends to continue gradually shifting the overall business mix, targeting diversification of revenue streams and building recognition as a leading small business bank in the Czech Republic.
  • The Group intends to strengthen its retail banking franchise through continued focus on successful pricing, origination and risk management in support of unsecured lending, and further through the redevelopment of its mortgage based finance offering.
  • The Group intends to further capitalise on cross selling opportunities and to deepen relationships with medium sized commercial customers, leveraging its position within the agricultural sector of the Czech economy and the opportunities for cross-selling with its commercial leasing operation.
  • The Group intends to significantly increase its efforts to leverage its existing client base, product and service offering and convert these capabilities into organic growth.

IMPORTANT NOTICE

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION (DIRECTLY OR INDIRECTLY) IN OR TO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN. THIS IS NOT AN OFFER OF SECURITIES FOR SALE IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN.

This announcement is not an offer of securities for sale in the United States.  The securities to which this announcement relates have not been and will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act.  There will not be a public offering of securities in the United States.

This announcement is only addressed to, and directed at, persons in the Czech Republic and other member states of the European Economic Area (“EEA”) that have implemented the Prospectus Directive, other than the United Kingdom, who are “qualified investors” within the meaning Section 34(3) of the Czech Capital Markets Acts and Article 2(1)(e) of the Prospectus Directive. In the United Kingdom, this announcement is only addressed to, and directed at persons to whom interests may lawfully be promoted pursuant to section 21 of the Financial Services and Markets Act 2000. In particular, the announcement is only directed at investment professionals within the meaning of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“Relevant Persons”).  Any investment or investment activity to which this announcement relates is available only to Relevant Persons in the United Kingdom and Qualified Investors in the Czech Republic and any other member state of the EEA, other than the United Kingdom, and will be engaged in only with such persons. Other persons should not rely or act upon this document or any of its contents.

This announcement is for information purposes only and is not an offer of, or solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction. This announcement is an advertisement for the purposes of Section 36k the Czech Capital Markets Act and Article 15 of the Prospectus Directive and not a prospectus. Investors should not subscribe for or purchase any Shares except on the basis of information in the Prospectus intended to be on webpage investors.monetabank.cz/ipo-documents, subject to applicable securities laws.

Any purchase of Shares in the Offering should be made solely on the basis of the information contained in the final Prospectus to be issued by the Company in connection with the Admission. Before purchasing any Shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published. The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

This announcement does not constitute a recommendation concerning the Admission and the Offering. The price and value of the Shares and any income from them can go down as well as up. Past performance is not a guide to future performance. Information in this announcement or any of the documents relating to the Offering and the Admission cannot be relied upon as a guide to future performance.

This announcement may include statements that are, or may be deemed to be, “forward-looking” statements, beliefs or opinions. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “intends”, “target” or “will” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company’s business, results of operations, financial position, liquidity, prospects, growth or strategies. Forward-looking statements speak only as of the date they are made.

Each of the Company, the Selling Shareholder, Citigroup Global Markets Limited, Goldman Sachs International, J.P. Morgan Securities plc, WOOD & Company Financial Services, a.s and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

WOOD & Company Financial Services, a.s. which is authorised and regulated by the CNB in the Czech Republic, Citigroup Global Markets Limited, Goldman Sachs International and J.P. Morgan Securities plc, each of which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, are acting exclusively for both the Selling Shareholder and the Company and no one else in relation to the Offering and the Admission and will not be responsible to anyone other than the Selling Shareholder and the Company for providing protections afforded to clients of Citigroup Global Markets Limited, Goldman Sachs International, J.P. Morgan Securities plc and WOOD & Company Financial Services, a.s. (the “Managers”) or for giving advice in relation to the Offering or any transaction or arrangement referred to herein.

In connection with the Offering and the Admission, each of the Managers and any of their respective affiliates, acting as an investor for its own account, may take up Shares in the Offering and in that capacity may retain, purchase or sell for its own account such Shares and any Shares or related investments and may offer or sell such Shares or other investments otherwise than in connection with the Offering. Accordingly, references in the Prospectus, once published, to Shares being offered or placed should be read as including any offering or placement of Shares to any of the Managers or any of their respective affiliates acting in such capacity. None of the Managers intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so. In addition, certain of the Managers or their affiliates may enter into financing arrangements (including swaps) with investors in connection with which such Managers (or their affiliates) may from time to time acquire, hold or dispose of Shares.

None of Managers or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, the Group or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

The timetable of the Offering and the Admission, including the publication of the Prospectus and the date of Admission may be influenced by factors such as market conditions. There is no guarantee that the Offering and Admission will occur and you not should base your financial decisions on the intentions of the Company and the Selling Shareholder in relation to the Offering and the Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested.

In connection with the Offering, a stabilisation agent or any person acting for it may, on behalf of the Managers, over-allot or effect transactions with a view to supporting the market price of the Shares at a level higher than that which might otherwise prevail. There is no assurance that the stabilisation agent (or persons acting on its behalf) will undertake any such stabilisation activities. Such transactions may be effected on the PSE, in the over-the-counter market or otherwise. Such stabilisation, if commenced, may be discontinued at any time during the period commencing on the first day of trading in the Shares on the PSE and in any event, must be brought to an end no later than 30 calendar days thereafter.