All figures are based on International Financial Reporting Standards (IFRS). Raiffeisen Bank International AG (RBI) commenced its business activities this past October; however, the founding of the new bank was effective retroactively as of 1 January 2010. Apart from year-end figures 2010 and the Q1 2011 results, all figures are provided on a pro forma basis.
Raiffeisen Bank International AG (RBI) posted a consolidated profit (after tax and non-controlling interests) of ˆ 270 million in the first quarter of 2011, which represents a decline of 19.1 per cent compared to RBI’s pro forma consolidated profit in the first quarter of the preceding year (pro forma Q1 2010: ˆ 334 million). In contrast, RBI’s profit before tax rose by 3.3 per cent to ˆ 405 million (pro forma Q1 2010: ˆ 392 million), while its profit after tax declined by 14.9 per cent to ˆ 305 million (pro forma Q1 2010: ˆ 359 million). This development reflects the strong increase in RBI’s effective tax burden to ˆ 100 million, an increase largely attributable to the recognition of deferred taxes on valuation gains. Earnings per share declined from pro forma ˆ 1.46 in the first quarter of 2010 by ˆ 0.33 to ˆ 1.13.
«During the first quarter of 2011, we succeeded in maintaining the upward trend and in achieving another good result. Our profit before tax for the period increased by three per cent compared with the same period last year, above all because of satisfying developments in both net interest income and net fee and commission income. However, additional tax expenses driven by deferred taxes weighed heavily on our consolidated profit,» commented Herbert Stepic, CEO of RBI.
Despite a 2 per cent rise in operating income, the operating result in the first three months of 2011 fell by 5 per cent or ˆ 29 million from the comparable period last year to ˆ 588 million. The main reasons for this were the rise in general administrative expenses, particularly as a result of wage in-creases in a number of markets, and the bank levies in Austria and Hungary totalling ˆ 34 million, which were not yet included in the same period last year.
Net interest income rose by 3 per cent or ˆ 26 million compared with the same period last year to ˆ 884 million. It was the largest contributor to operating income, accounting for 66 per cent of total operating income.
Net fee and commission income improved by 6 per cent or ˆ 20 million on the comparable period of last year to ˆ 357 million. The largest contribution to this increase came from net income from payment transfers, which rose by 6 per cent or ˆˆ 8 million to ˆ 141 million due to higher transaction volumes in the Czech Republic and Ukraine.
Net trading income fell slightly compared with the comparable period of 2010, declining by 2 per cent or ˆ 3 million to ˆ 123 million.
«Looking at the distribution of our results before tax by segment, CIS other improved slightly, while Southeastern Europe was a bit weaker. All of the other regional and business segments recorded increases in excess of 40 per cent,» CFO Martin Grüll emphasized.
The net provisioning for impairment losses in the first three months of 2011amounted to ˆ 208 million. This represents a significant decline of 36 per cent or ˆ 117 million from the level in the first quarter of 2010 (ˆ 325 million). This item also includes ˆ 2 million in gains from the sale of loans.
«The fact that our volume of non-performing customer loans has decreased slightly for the first time since the start of the crisis, namely by 2.4 per cent to ˆ 6.6 billion, is particularly positive,» said Chief Risk Officer Johann Strobl.
This positive trend was reflected in the net provisioning ratio (the ratio of net provisioning for impairment losses to average risk-weighted assets), which declined by 0.68 percentage points year-on-year to 1.16 per cent. The ratio at 31 December 2010 was 1.66 per cent.
The NPL ratio, the ratio of non-performing loans to total customer loans, improved by 0.4 percentage points since year-end 2010 to 8.6 per cent. Non-performing loans were matched by provisioning of ˆ 4,530 million. This produced a coverage ratio of 68.3 per cent, an improvement of around 2 percentage points on the end of 2010.
Despite of a slight rise in profit before tax the return on equity figures were slightly weaker. Return on equity before tax was 15.6 per cent at the end of the first quarter, down by 0.9 percentage points from 16.5 per cent in the comparable period in 2010. This was due to the rise in the equity base compared to the first quarter 2010 as a result of retained earnings. Average equity underlying the return on equity calculation rose by 10 per cent to ˆ 10.4 billion.
General administrative expenses rose by 8 per cent or ˆ 53 million compared with the first quarter of 2010 to ˆ 753 million. The cost/income ratio rose by 3 percentage points to 56.2 per cent over the same period.
Staff expenses increased by 10 per cent or ˆ 34 million on the comparable period last year. With a share of 51 per cent staff expenses are the largest single item in general administrative expenses.
The average number of staff was 59,842, a rise of 856 compared to the first quarter of 2010.
Other administrative expenses rose by 3 per cent or ˆ 8 million on the same period last year, with the biggest increases coming from IT expenses (up by 22 per cent), advertising, PR and promotional expenses (up 33 per cent) and office space costs (up by 4 per cent).
As of 31 March 2011, the total assets of RBI amounted to ˆ 139.5 billion. This was 6 per cent or ˆ 8.3 billion above the comparable figure for the end of 2010. On the assets side, the increase was caused by growth in loans to banks and customers. On the liabilities side, the increase came from deposits from banks and customers as well as securities issued.
The consolidated equity, consisting of subscribed capital, participation capital, capital reserves and retained earnings, increased by ˆ 1,046 million to ˆ 9,297 million. The increase in retained earnings was mainly put down to the transfer of earnings amounting to ˆ 1,087 million.
Compared to the year-end 2010, the bank’s balance sheet equity (consisting of the consolidated equity, consolidated net profit and the capital of the non-controlling interests) increased by 3 per cent or ˆ 268 million to ˆ 10,672 million.
The tier 1 ratio — based on credit risk — rose by 0.1 percentage points to 12.3 per cent. Based on total risk, this resulted in a core tier 1 ratio of 8.9 per cent and a tier 1 ratio of 9.7 per cent. The own funds ratio remained unchanged at 13.3 per cent.
Compared to 31 March 2010, the number of business outlets remained with 2,932 more or less at the same level. The customer base remained constant at approximately 14 million as per the end of the first quarter.
You can access the web-version of the quarterly report at qr012011.rbinternational.com. The German version is available under zb012011.rbinternational.com. A printed English-language version can also be ordered via that webpage.
Raiffeisen Bank International AG (RBI) regards both Austria, where it is a leading corporate and investment bank, and Central and Eastern Europe (CEE) as its home market. In CEE, RBI operates an extensive network of subsidiary banks, leasing companies and a range of other specialised financial service providers in 17 markets.
RBI is the only Austrian bank with a presence in both the world’s financial centres and in Asia, the group’s further geographical area of focus.
In total, around 60,000 employees service about 14 million customers through around 3,000 business outlets, the great majority of which are located in CEE.
RBI is a fully-consolidated subsidiary of Raiffeisen Zentralbank Österreich AG (RZB). RZB indirectly owns around 78.5 per cent of the common stock, the remainder is in free float. RBI’s shares are listed on the Vienna Stock Exchange. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country’s largest banking group, and serves as the head office of the entire RZB Group, including RBI.