15.05.2019 - RBI reports consolidated profit of € 226 million for the first quarter of 2019

  • Consolidated profit of € 226 million, primarily impacted by € 92 million change in risk costs after net releases in the first quarter last year, negative hedge valuations and sale of the Polish core banking operations
  • Net interest income stable year-on-year at € 825 million. Excluding Poland, net interest income improved approximately 8 per cent year-on-year
  • Loans to customers up 6 per cent YTD
  • Net interest margin down 10 basis points quarter-on-quarter to 2.43 per cent, due to tightening in Russia and a higher proportion of short-term lower margin business at head office
  • Risk costs still very low at € 9 million (4 basis points provisioning ratio) but fewer write-backs and recoveries than last year
  • NPE ratio improved to 2.5 per cent
  • CET1 ratio improved to 13.6 per cent (fully loaded) including YTD results

Raiffeisen Bank International (RBI) generated a consolidated profit of € 226 million in the first quarter of 2019, the operating result amounted to € 465 million.

“Loan growth and net interest income are developing positively. Due to various one-off effects, the first quarter of 2019 can be compared with the prior-year quarter only to a limited extent. I expect that RBI will achieve a good business result also in 2019. We have a strong capital base that allows us further growth,” said RBI CEO Johann Strobl.

Despite the sale of the Polish core banking business, overall, net interest income fell only slightly by € 4 million to € 825 million year-on-year. Excluding this sale, net interest income would have increased by approximately 8 per cent. The net interest margin declined 7 basis points to 2.43 per cent, mainly driven by growth in low-margin business at head office and negative margin developments in Russia and Belarus

General administrative expenses declined € 16 million year-on-year to € 724 million. The cost/income ratio increased 3.6 percentage points primarily due to hedge valuations to 60.9 per cent.

Moderate impairment losses on financial assets

Impairment losses on financial assets were moderate in the reporting period at € 9 million, compared to an € 83 million net release of loan loss provisions in the comparable period of the previous year – due in particular to inflows and recoveries.

The NPE ratio remained relatively stable, decreasing 0.1 percentage points to 2.5 per cent since the start of the year. At 58.4 per cent, the NPE coverage ratio also remained virtually unchanged.

Total capital ratio (fully loaded) at 18.0 per cent

The common equity tier 1 ratio (fully loaded) was 13.4 per cent, the tier 1 ratio (fully loaded) was 14.9 per cent and the total capital ratio (fully loaded) was 18.0 per cent. All the ratios are essentially unchanged from the end of 2018. These capital ratios including interim profit from the first quarter would be around 18 basis points higher than the presented ratios.

Quarterly comparison

Net interest income was down 2 per cent, or € 18 million, to € 825 million, reflecting a € 19 million reduction in Poland (sale of the Polish core banking operations). The net interest margin decreased 10 basis points to 2.43 per cent due to the margin decline in Russia and an increase in the volume of mainly short-term, lower-margin business at head office.

General administrative expenses amounted to € 724 million in the first quarter of 2019, an 11.6 per cent decrease compared to € 819 million in the previous quarter.

In the first quarter of 2019, impairment losses on financial assets amounted to € 9 million, compared to impairment losses of € 222 million in the previous quarter.

Consolidated profit improved € 129 million to € 226 million. This was mainly attributable to the € 212 million reduction in impairment losses on financial assets, partly offset by a € 101 million increase in levies and expenses for special governmental measures, which must in most cases be posted in their entirety in the first quarter.

Outlook

RBI will pursue loan growth with an average yearly percentage increase in the mid-single digit area.

The provisioning ratio for FY 2019 is expected to be around 45 basis points.

The bank anticipates that the NPE ratio will further reduce.

RBI aims to achieve a cost/income ratio of around 55 per cent in 2021.

In the coming years the bank targets a consolidated return on equity of approximately 11 per cent.

It seeks to maintain a CET1 ratio of around 13 per cent in the medium term.

Based on this target, RBI intends to distribute between 20 and 50 per cent of the consolidated profit.

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You can access the online version of the annual report at qr012019.rbinternational.com, the German version is available at zb012019.rbinternational.com.

Survey of key data

Presentation Q1 2019 Results

 

Ingrid Krenn-Ditz

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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