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Public relations section
• Net interest income decreases 13.4 per cent year-on-year to € 1,455 million (HY/2015: € 1,681 million)
• Operating income decreases 6.5 per cent to € 2,284 million (HY/2015: € 2,444 million)
• Net provisioning for impairment losses decreases 33.3 per cent to € 403 million (HY/2015: € 604 million)
• Profit before tax decreases 1.1 per cent to € 450 million (HY/2015: € 455 million)
• Profit after tax decreases 14.8 per cent to € 268 million (HY/2015: € 314 million)
• Consolidated profit decreases 23.8 per cent to € 210 million (HY/2015: € 276 million)
• Non-performing loan ratio improves 1.5 percentage points to 10.4 per cent compared to year-end 2015
• Common equity tier 1 ratio (transitional) increases 0.4 percentage points to 12.5 per cent compared to year-end
• Common equity tier 1 ratio (fully loaded) increases 0.7 percentage points to 12.2 per cent compared to year-end
• Earnings per share decrease 23.8 per cent to € 0.72 (HY/2015: € 0.94)
All figures are based on International Financial Reporting Standards (IFRS).
“We have been successfully working on the realization of our transformation program also in the first half of 2016. This can be seen in our equity ratios, which we have increased significantly since the beginning of the year. The improvement of our capital base remains the top priority,” explained Karl Sevelda, CEO of Raiffeisen Bank International AG (RBI).
In the first half of 2016, RBI Group generated a profit before tax of € 450 million, which represents a year-on-year decrease of 1 per cent. Profit after tax decreased 15 per cent to € 268 million year-on-year, while consolidated profit decreased 24 per cent to € 210 million.
“Due to the ongoing low interest rate environment and the reduction of our loan volume, our income remains under pressure. What is pleasing though, is that results from business with retail customers were above our expectations despite the difficult market environment,” Sevelda said.
Net interest income decreased 13 per cent
Operating income was down 7 per cent year-on-year, or €160 million, to € 2,284 million.
In the first six months of 2016, net interest income fell 13 per cent, or € 226 million, to € 1,455 million. This was primarily attributable to the continuing low market interest rates in many of the Group’s countries, existing excess liquidity, as well as a reduction of € 104 million, particularly in Russia, in interest income from derivatives entered into for hedging purposes, which were impacted by market fluctuations in the first half of 2015. A decline in the loan portfolios at Group head office and in Asia also contributed to the reduction in net interest income.
Net provisioning for impairment losses decreased 33 per cent
Compared to the same period of the previous year, net provisioning for impairment losses fell by a total of 33 per cent, or € 201 million, to € 403 million. This was mainly due to a € 162 million reduction in individual loan loss provisioning to € 432 million.
“I am very satisfied with the development of our risk costs. Especially in retail business, we were able to reduce net provisioning substantially. Non-performing loans decreased significantly as well,” said Sevelda.
Common equity tier 1 ratio (transitional) of 12.5 per cent
Based on total risk, the common equity tier 1 ratio (transitional) was 12.5 per cent while the total capital ratio (transitional) was 17.8 per cent.
"The outlook remains unchanged. I would like to highlight that the development of the business in our core markets Central Europe and Southeastern Europe has been particularly solid in the first half of this year – which you can see in the numbers. In addition, we believe we will have fully absorbed the problems in Asia this year. These two factors in combination, coupled with the good equity development, make me optimistic for the future," summarized Sevelda.
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You can access the online version of the quarterly report at http://qr022016.rbinternational.com.