RBI: 1-9/2023 Results

Raiffeisen Bank International (RBI) achieved a consolidated profit of 2.114 billion euros in the first three quarters of 2023. Core revenues (net interest income as well as net fee and commission income) without the Russian and Belarussian business rose by 20 per cent year-on-year.

"We are very satisfied with the first three quarters. The good earnings development persisted in the third quarter. At the same time, the reduction of our Russian business continues to make good progress," said RBI CEO Johann Strobl.

Significant decrease of risk costs

In the reporting period, impairment losses on financial assets were significantly lower at 251 million euros than in the comparable period of 721 million euros. Impairment losses in Eastern Europe continued to dominate due to the ongoing Russian war of aggression in Ukraine. Risk costs in Eastern Europe totaled 225 million euros compared to 569 million euros in the previous-year period. 147 million euros (previous-year period: 299 million euros) related to Russia and 74 million euros (previous-year period: 247 million euros) to Ukraine.

Further reduction of Russian business

In the third quarter of 2023, RBI further reduced its Russian business. Since the beginning of the year, the loan volume in Russia was scaled back by 30 per cent. At the end of June 2023, the decline was 21 per cent. With a loan volume of around 6.3 billion euros, Raiffeisenbank Russia is now only the fourth-largest subsidiary of RBI. In addition, RBI reduced its payment business with Russia and terminated all business relationships with Russian correspondent banks except for its subsidiary Raiffeisenbank Russia.

"We continue to work on options leading to deconsolidation. In doing so, we depend on numerous regulatory approvals from Russian and European authorities and can therefore influence the pace only to a very limited extent," Strobl explained.

CET1 ratio (transitional) of 16.5 per cent  

RBI further strengthened its capital base in the third quarter. Including the results of the first three quarters of 2023, this resulted in a CET1 ratio of 16.5 per cent, already taking the proposed dividend for 2022 into account. The CET1 ratio in the event of a deconsolidation of the Russian subsidiary bank without taking its equity into account would have been 14.4 per cent at the end of the quarter, significantly above the regulatory requirements.

"We are pleased that our good capitalization allows us to propose to our shareholders the payout of a dividend of 80 cent per share for the 2022 financial year at an extraordinary general meeting on 21 November," said Strobl.

Outlook

The following guidance refers to RBI excluding Russia and Belarus, whereas the corresponding figures in brackets refer to the existing footprint. RBI will continue to progress potential transactions which would result in the sale or spin-off of Raiffeisenbank Russia and deconsolidation of Raiffeisenbank Russia from RBI.

In 2023, net interest income is expected between 4.2 and 4.3 billion euros (between 5.6 and 5.7 billion euros) and net fee and commission income around 1.8 billion euros (between 2.9 and 3.0 billion euros).

We expect customer loan growth to increase by around 2 per cent (minus 1 per cent).

We expect general administrative expenses around 3.1 billion euros (around 4.0 billion euros), resulting in a cost/income ratio of around 50 per cent (43 to 45 per cent).

The provisioning ratio – before use of overlays – is expected to be around 30 basis points (around 40 basis points).

The consolidated return on equity is expected to be around 10 per cent (around 16 per cent) in 2023.

At year-end 2023 we expect a CET1 ratio above 13.5 per cent* (above 16.5 per cent).

Any decision on dividends will be based on the capital position of the Group excluding Russia.

Medium term return on equity and payout ratio targets are suspended due to current uncertainties in Eastern Europe.

* In a ‘P/B Zero‘ Russia deconsolidation scenario. 

The online quarterly report is available at qr032023.rbinternational.com. The German version is online at zb032023.rbinternational.com.