Raiffeisenbank’s results for the 1st quarter of 2011 are in accordance with International Financial Reporting Standards (IFRS) and may differ from the result of the Russia segment in the financial statements of Raiffeisen International Bank because of the difference that arises from consolidation.
According to the results of the 1st quarter of 2011, the consolidated profit after tax of Raiffeisenbank totaled RUR 3.4 billion, which is 55.3% higher than in the 1st quarter of 2010 (RUR 2.2 billion).
The main growth factors of the net profit of Raiffeisenbank in the 1st quarter of 2011 compared with the 1st quarter of 2010 were: the growth in the net interest income and the improvement in the quality of the loan portfolio.
The net interest income of the bank (RUR 5.9 billion) in the 1st quarter of 2011 increased by 14.7% against the same period last year. The net interest income after allowances for loan losses increased even more significantly during this time — by 45.6% to RUR 6.3 billion. The growth in the interest income resulted from the increase in the loan portfolio and securities portfolio from March 31, 2010 to March 31, 2011, amid the declining cost of funds.
The size of the total loan portfolio after allowances for loan losses at the end of the 1st quarter of 2011 totaled RUR 285.7 billion, which is 0.8% higher than at the end of 2010. The size of the corporate lending portfolio after allowances for loan losses did not change and amounted to RUR 207.2 billion. In the retail lending segment, borrowing increased in the 1st quarter of 2011 by 1.8% and amounted to RUR 72.4 billion.
The allowances for loan losses decreased during the first three months of 2011 by 2.6% to RUR 26.2 billion as a result of the recovery of reserves for possible losses due to extinguished debt. The decline in the reserves resulted from the active work of the bank with arrears, as well as from the improved ratings of borrowers. The bad debt reserve coverage ratio2 increased from 94.3% (on 31 December, 2010) to 98.7% (on March 31, 2011).
The ratio of bad debts in the first three months of 2011 continued its decline, falling to 8.4% (on March 31, 2011) compared with 8.8% (on December 31, 2010).
The securities portfolio amounted to RUR 68.7 billion on March 31, 2011, which is a decrease of 17.8% from the end of 2010. As a result, the share of the securities portfolio in the bank’s assets declined to 13.4% compared to 16.5% at the end of 2010. The main reason for the reduction in the securities portfolio was the bank’s reduced investments in Central Bank bonds of more than RUR 15 billion. The trading securities portfolio decreased insignificantly (by 0.5%) and amounted to RUR 53.3 billion on March 31, 2011.
In the bank’s liabilities, the amount of client funds in both the corporate and retail segments continued to increase. On March 31, 2011 the total value of deposits and current accounts was RUR 308 billion, which is 7.4% higher than on December 31, 2010.
The administrative and operating expenses increased in the 1st quarter of 2011 by 14.4% compared to the 1st quarter of 2010, mainly due to staff costs.
The capital base of the bank in the 1st quarter of 2011 increased by 4.0% to RUR 89.4 billion due to the bank’s net earnings in the 1st quarter. The capital adequacy ratio (H-1) remains at the conservative level of 16.89%, according to Russian standards on March 31, 2011.
ZAO Raiffeisenbank is a subsidiary of Raiffeisen Bank International AG. Raiffeisenbank ranks 9th among the Russian banks in terms of assets, based on Q1 2011 results (Interfax-CEA). According to the same Interfax-CEA data, ZAO Raiffeisenbank ranked 5th in terms of private deposits and 8th with regard to consumer lending.
Raiffeisen Bank International AG 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. 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 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. Raiffeisen Bank International is a fully-consolidated subsidiary of Raiffeisen Zentralbank Oesterreich AG (RZB). RZB indirectly owns around 78.5 per cent of the common stock, which is listed on the Vienna Stock Exchange; the remainder is in free float. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country’s largest banking group, and serves as the group head office of the entire RZB Group, including RBI.