Raiffeisen Bank International´s statement following today’s announcement by Erste Group
- Low sovereign exposure to peripheral countries
- Very low goodwill of EUR 3.5 million for Hungary, no goodwill booked for Romania
- Profit expected for business year 2011
Due to the many questions received from the market as a consequence of today´s announcement by Erste Group, Raiffeisen Bank International AG (RBI) would like to make the following statement:
- RBI's sovereign exposure in the peripheral countries of the Eurozone has traditionally been at a low level. At the end of June 2011, RBI had no sovereign exposure to Greece and Ireland, a sovereign exposure of less than EUR 10 million to Spain and Portugal together, as well as a sovereign exposure of only EUR 474 million to Italy.
- RBI’s CDS portfolio (credit default swaps) was always valued mark-to-market, therefore RBI has no need to adapt its valuation.
- RBI’s subsidiary in Hungary was founded as a «greenfield» operation and has been growing organically for more than 20 years. RBI’s balance sheet shows a very small goodwill amounting to only EUR 3.5 million for its Hungarian bank, which will be written off this year.
- The subsidiary in Romania was acquired at a very low cost level in 2001. There is no goodwill booked for this unit and consequently, RBI has no necessity to write down any goodwill for its Romanian operations.
- RBI already stated during the past weeks that it expects a need for provisioning of around EUR 100 million due to the new legislation decided by the Hungarian Parliament (based on the assumption that approximately 30 per cent of the volume of all loans in foreign exchange will be repaid making use of the legislation’s terms). RBI also expects an additional significant provisioning need because of the difficult market environment in Hungary. More details will be disclosed at the latest on 24 November 2011, the publication date of RBI’s third quarter results.
- The changing and deteriorating macroeconomic climate will result in a challenging market environment. RBI posted a consolidated profit (after tax and non-controlling interests) of € 615 million for the first six months of 2011; the bank expects a profit for the business year 2011 as a whole.
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.
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.
For further information please contact Michael Palzer (+43-1-71-707-2828, firstname.lastname@example.org) or Peter Klopf (+43-1-71-707-1930, email@example.com)