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Public relations section
All figures are based on International Financial Reporting Standards (IFRS).
“I am satisfied with the development of the first nine months. Important key figures like the capital ratios and the NPL ratio are developing in the right direction. Our transformation program makes good progress, and we are already now approaching our target figures, one year ahead of schedule”, explains Karl Sevelda, CEO of Raiffeisen Bank International AG (RBI).
In the first three quarters of 2016, Raiffeisen Bank International Group (RBI) generated a profit before tax of € 746 million, which represents a year-on-year increase of 5.3 per cent or € 38 million. Operating income was down 5 per cent year-on-year, or € 190 million, to € 3,470 million. Net interest income declined further, down 12 per cent to € 2,187 million, due to the aforementioned low interest rate level. This was primarily attributable to persistently low market interest rates in many of the Group’s countries and to existing excess liquidity, as well as to a reduction of € 171 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. Profit after tax decreased 6.9 per cent year-on-year to € 480 million. Consolidated profit in the reporting period was € 394 million, which corresponds to a decrease of 14.7 per cent or € 68 million.
“I would like to emphasize the turnaround in Hungary as well as the outstanding result in Ukraine in the light of the extremely difficult environment there. Russia, the Czech Republic, Slovakia and Bulgaria delivered very strong results, too”, said Sevelda.
Net interest income decreased 12 per cent
In the first nine months of 2016, net interest income fell 12 per cent, or € 308 million, to € 2,187 million.
“We cannot completely decouple from the sustaining low interest rate environment and notice this in net interest income. However, the interest rate environment continues to be more attractive in CEE than in Western Europe”, Sevelda stated.
General administrative expenses stable
Compared to the same period in the previous year, general administrative expenses declined € 1 million to € 2,100 million. The cost/income ratio increased 3.1 percentage points to 60.5 per cent, predominantly due to the lower net interest income.
Net provisioning for impairment losses decrease 37 per cent
Compared to the same period of the previous year, net provisioning for impairment losses fell by a total of 37 per cent, or € 292 million, to € 503 million. This was due to a € 280 million reduction in individual loan loss provisioning to € 543 million. There was a net release of € 32 million of portfolio-based provisions in the reporting period, an improvement of € 14 million.
Common equity tier 1 ratio (fully loaded) of 12.3 per cent
Based on total risk, the common equity tier 1 ratio (transitional) was 12.6 per cent while the total capital ratio (transitional) was 17.8 per cent.
“Our outlook remains unchanged. Basically, I am optimistic about RBI’s future development, but populist measures at the expense of banks are cause for concern. Against this background, it is all the more positive that the Romanian Constitutional Court recently stopped the retroactive interference with freedom of contract and partially repealed the so called Walkaway Law. I hope for a signal effect from this verdict”, Sevelda summed up.
You can access the online version of the quarterly report.
The German version is available. Printed versions can also be ordered via that webpage.
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 mergers and acquisitions.
In total, around 51,000 employees service 14.2 million customers through around 2,600 business outlets, the great majority of which are located in CEE.