14.11.2017 - RBI posts consolidated profit of € 910 million in the first three quarters of 2017

  • Net interest income increases 2.2 per cent year-on-year to € 2,391 million (1-9/2016 pro forma: € 2,340 million)
  • Operating income increases 4 per cent to € 3,889 million (1-9/2016 pro forma: € 3,737 million)
  • General administrative expenses stable at € 2,291 million (1-9/2016 pro forma: € 2,294 million)
  • Net provisioning for impairment losses decreases 68.1 per cent to € 160 million (1-9/2016 pro forma: € 501 million)
  • Profit before tax increases 66.6 per cent to € 1,301 million (1-9/2016 pro forma: € 781 million)
  • Profit after tax increases 93.2 per cent to € 1,012 million (1-9/2016 pro forma: € 524 million)
  • Consolidated profit increases 109.9 per cent to € 910 million (1-9/2016 pro forma: € 433 million)
  • Non-performing loan ratio decreases 2 percentage points to 6.7 per cent compared to year-end 2016 (pro forma)
  • Common equity tier 1 ratio (transitional) stable at 12.7 per cent compared to year-end 2016 (pro forma)
  • Common equity tier 1 ratio (fully loaded) increases 0.1 percentage points to 12.5 per cent compared to year-end 2016 (pro forma)

All figures are based on International Financial Reporting Standards (IFRS).

"We are very satisfied with the results for the first nine months. We increased net interest income slightly and net commission income significantly, and we kept general administrative expenses stable year-on-year," said RBI-CEO Johann Strobl.

The group headed by Raiffeisen Bank International AG (RBI) posted profit before tax of € 1,301 million for the first three quarters of 2017, an increase of 66.6 per cent or € 520 million compared with the same period of 2016. Net provisioning for impairment losses decreased significantly year-on-year, and operating business showed a positive development as well: Operating income increased 4 per cent year-on-year, or € 151 million to € 3,889 million, while general administrative expenses remained stable. Profit after tax increased 93.2 per cent year-on-year to € 1,012 million. Consolidated profit for the reporting period was € 910 million, which corresponds to an increase of 109.9 per cent or € 476 million.

”The broad economic upswing in CEE is reflected in all our segments. We post profits in all our markets,” said Strobl.

 

Net interest income increased slightly

In the first nine months of 2017, net interest income increased 2 per cent year-on-year, or € 52 million, to € 2,391 million. This was mainly attributable to a € 62 million currency-related increase in net interest income in Russia, whereas small declines were booked in other markets due to continuing low interest rates.

Net fee and commission income improved 8 per cent year-on-year, or € 90 million, to € 1,271 million due to currency appreciation in Eastern Europe and higher revenues.

Net trading income increased € 42 million year-on-year to € 183 million.

 

General administrative expenses stable

Compared to the same period of the previous year, general administrative expenses declined € 3 million to € 2,291 million. Staff expenses declined € 4 million year-on-year to € 1,145 million.

The cost/income ratio improved 2.5 percentage points to 58.9 per cent, largely due to higher operating income.

 

Net provisioning for impairment losses down 68 per cent

Net provisioning for impairment losses fell 68 per cent, or € 341 million, overall year-on-year to € 160 million.

Compared to year-end 2016, the NPL ratio improved 2.0 percentage points to 6.7 per cent. Non-performing loans compared to loan loss provisions of € 3,778 million, resulting in an NPL coverage ratio of 69.4 per cent, in comparison to 75.2 per cent at the end of 2016.

"We made very good progress regarding the reduction of non-performing loans and already exceeded our objectives for the full year in this regard," said Strobl.

 

Common Equity Tier 1 Ratio (fully loaded) of 12.5 per cent

Total capital amounted to € 12,532 million as at 30 September 2017. This corresponds to an increase of € 728 million compared to the 2016 year-end figure.

Based on total risk, the common equity tier 1 ratio (transitional) was 12.7 per cent and the total capital ratio (transitional) was 18.0 per cent.

Excluding the transitional provisions as defined in the CRR, the common equity tier 1 ratio (fully loaded) stood at 12.5 per cent and the total capital ratio (fully loaded) was 17.9 per cent.

Taking account of the results for the third quarter of 2017, the capital ratios would be 0.4 percentage points higher in each case.

 

Comparison of results with the previous quarter

Compared to the second quarter of 2017, net interest income increased 1 per cent or € 11 million to € 803 million in the third quarter of 2017.

Net fee and commission income declined 1 per cent or € 4 million quarter-on-quarter to € 429 million.

Compared to the previous quarter, net trading income declined 28 per cent or € 19 million to € 50 million.

In the third quarter of 2017, general administrative expenses were € 718 million, down 5 per cent or € 40 million quarter-on-quarter.

In the third quarter of 2017, net provisioning for impairment losses amounted to € 84 million, whereas in the second quarter a net release of € 4 million was posted due to NPL sales and releases of provisions for impairment losses.

Other results fell € 11 million, from minus € 26 million in the second quarter of 2017 to minus € 37 million in the third quarter of 2017.

In the third quarter of 2017, consolidated profit amounted to € 322 million representing a decrease of 12.2 per cent or € 45 million compared to the second quarter of 2017.

 

Outlook

RBI’s outlook remains unchanged.

RBI targets a CET1 ratio (fully loaded) of around 13 per cent in the medium term.

After stabilizing loan volumes, the bank looks to resume growth with an average yearly percentage increase in the low single digit area.

RBI expects net provisioning for impairment losses for 2017 to be significantly below the level of 2016 (€ 758 million), supported by a high level of recoveries and gains on NPL sales.

After reaching the previous goal of approximately 8 per cent ahead of schedule, the bank expects the NPL ratio to reduce further in the medium term.

RBI further aims to achieve a cost/income ratio of between 50 and 55 per cent in the medium term, unchanged from the previous target.

The bank’s medium term return on equity before tax target is unchanged at approximately 14 per cent, with a consolidated return on equity target of approximately 11 per cent.

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You can access the online version of the quarterly report at qr032017.rbinternational.com. The German version is available under zb032017.rbinternational.com. Printed versions can also be ordered via RBI’s webpage.

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Raiffeisen Bank International AG (RBI) regards Austria, where it is a leading corporate and investment bank, as well as Central and Eastern Europe (CEE) as its home market. 14 markets of the region are covered by subsidiary banks. Additionally, the group comprises numerous other financial service providers, for instance in the fields of leasing, asset management, as well as M&A.

In total, nearly 50,000 employees service 16.5 million customers through more than 2,400 business outlets, the majority thereof in CEE. RBI's shares are listed on the Vienna Stock Exchange. The Regional Raiffeisen Banks own around 58.8 per cent of the shares, the remainder is in free float. Within the Raiffeisen Banking Group, RBI is the central institute of the Regional Raiffeisen Banks and other affiliated credit institutions and renders important services in this function.

For further information please contact:
Ingrid Krenn-Ditz (+43-1-71 707-6055, ingrid.krenn-ditz@rbinternational.com) or
Christof Danz (+43-1-71 707-1930, christof.danz@rbinternational.com)
http://www.rbinternational.com

Survey of key data

Presentation Q3/2017 Results

Ingrid Krenn-Ditz

Head of Group Communications | Corporate Spokeswoman
Raiffeisen Bank International AG
Am Stadtpark 9, 1030 Wien
Tel: +43-1-71707-6055
Fax: +43-1-71707-3802
ingrid.krenn-ditz@rbinternational.com
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