RBI reports consolidated profit of € 399 million for the first quarter of 2018
On 1 January 2018, the new accounting standard for financial instruments (IFRS 9) took effect. In addition to the adoption of IFRS 9, RBI has also changed the presentation of its balance sheet, which is now aligned with the financial reporting standards (FINREP) issued by the European Banking Authority (EBA).
On 1 January 2018, the new accounting standard for financial instruments (IFRS 9) took effect. In addition to the adoption of IFRS 9, RBI has also changed the presentation of its balance sheet, which is now aligned with the financial reporting standards (FINREP) issued by the European Banking Authority (EBA). With the adoption of the standards, it was also necessary to adjust the comparable period and reporting date.
Raiffeisen Bank International AG (RBI) generated a consolidated profit of € 399 million in the first quarter of 2018.
“We had a good start into the year. We were able to increase our operating result compared with the previous year and release provisioning for impairment losses,” said RBI CEO Johann Strobl.
During the first three months of 2018, net interest income increased 4 per cent or € 32 million to € 829 million year-on-year. The increase was driven by the improvement of 5 basis points in the net interest margin to 2.49 per cent and by a 1 per cent increase in the group’s interest-bearing assets due to growth in short-term loans.
General administrative expenses showed a slight € 5 million year-on-year decline to € 740 million. The cost/income ratio improved by 2.1 percentage points to 57.3 per cent.
Net release of € 83 million
There was a net release of € 83 million in impairment losses on financial assets in the reporting period compared to a net allocation of € 82 million in the same period last year. This positive development was driven by a good macroeconomic environment with regard to inflows and successful recoveries totaling € 135 million.
At the end of March 2018, the NPL ratio was 5.4 per cent, 0.3 percentage points lower than at the beginning of the year.
"We are confident for the financial year and have ambitious plans for it. We will drive our digital projects forward and further improve RBI’s efficiency," said Strobl.
RBI will pursue loan growth with an average yearly percentage increase in the mid-single digit area.
Impairment losses on financial assets (risk costs) in 2018 are expected to be around the 2017 level.
RBI anticipates that the NPL ratio will further reduce in the medium term.
The bank aims to achieve a cost/income ratio of below 55 per cent in the medium term.
It targets a consolidated return on equity of approximately 11 per cent in the medium term.
RBI targets a CET1 ratio (fully loaded) of around 13 per cent post dividend in the medium term.
Based on this target, it intends to distribute between 20 and 50 per cent (dividend payout ratio) of the consolidated profit.
The targets in this outlook include the impact from IFRS 9 and FINREP; the sale of the core banking operations in Poland is not reflected.
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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 RBI Group comprises numerous other financial service providers, for instance in leasing, asset management or M&A.
In total, around 50,000 employees service 16.6 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 Austrian Regional Raiffeisen Banks own around 58.8 per cent of the shares, the remainder is in free float. Within the Austrian 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.
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