AO Raiffeisenbank has announced its financial results for the first quarter of 2016. All figures are provided in accordance with International Financial Reporting Standards (IFRS) and may differ from the data on Russia in Raiffeisen Bank International AG (RBI) financial report as a result of the difference arising from consolidation and translation to Euro.
Raiffeisenbank’s profit after tax for the first quarter of 2016 contracted by 29.3% compared to the same period of 2015 on the back of lower net interest income and trading result.
The Bank’s profitability ratios remain on the high level but have reduced on the back of lower profit: ROE before tax to 25.3% (-10.0 percentage points
«We continued to increase the share of
The Bank has a substantial liquidity cushion: the share of liquid assets remained nearly unchanged compared to the end of 2015 (down 1.1 percentage points) reaching 27.1% as of
Following the RBI Group’s strategy to reduce the
Following the planned reduction in assets the Bank has contracted due to other banks and term borrowings from the Parent bank (down 39.5% and 23.2% respectively). Customer accounts fell by 3.9% primarily due to the foreign exchange revaluation effect.
The Bank enjoys considerable capital adequacy and fully meets the regulatory capital requirements. H 1.1 and H 1.21 capital ratios remain on the high level and as of 1 April 2016 were 9.9% and 10.8%, respectively (up 1.0 and 0.9 percentage points compared to
Operating income before provisioning for impairment losses2 dropped by 9.0% and at the end of the 1st quarter of 2016 was RUB 16 276.9 million due to lower net interest income and trading result.
Net interest income before provisioning for impairment losses dropped by 11.4% compared to the 1st quarter of 2015 reaching RUB 10 532.8 million due to the lower market rates (compared to the same period of 2015) and contracted loan portfolio.
Trading result3 in the 1st quarter of 2016 was RUB 2 326.5 million (down 22.4% compared to RUB 2 997.1 million in the 1st quarter of 2015) due to the lower result from the items related to foreign exchange transactions and revaluation4 (down from RUB 2 638.9 million to RUB 1 891.6 million) as a result of the falling gains from revaluation of foreign exchange swaps due to the lower market rates. High unrealized gains on foreign exchange swaps in 1st quarter 2015 represent positive
Net fee and commission income rose by 20.0% to RUB 3 219.7 million mainly due to the higher net commission income on settlement transactions (up 162.4% to RUB 584.5 million on the back of the higher income from service packages for small and micro businesses).
Operating expenses rose by 7.7% to RUB 6 079.1 million due to the growing staff expenses (up 30.4%), mainly resulting from low base effect in 1Q2015 because of the release of provisions for bonuses. The factors that prevented further growth in operating expenses were the decrease of rent expenses (down 25.6%), depreciation of premises and equipment (-14.3%) resulting from the lower number of business outlets.
As a result,
During the first three months of 2016 the charge of provisions for loan impairment was at the level of the similar period of 2015 (RUB 4 051.7 million in the 1st quarter of 2016 vs. RUB 3 732.3 million in the 1st quarter of 2015) mainly due to tightening of internal Group requirements to provision calculation. The risk costs5 demonstrated a moderate growth primarily due to a gradual reduction in the average loan portfolio and at the end of the 1st quarter of 2016 reached 3.0% per annum.
Profit before tax at the end of the 1st quarter of 2016 was RUB 6 155.0 million, down 27.7% compared to the same period of 2015. The Bank’s profit after tax was RUB 4 867.1 million.
Gross loan portfolio contracted by 5.0% to RUB 530 347.1 million as a result of the RBI group’s strategy to reduce the
The reduction of loan portfolio was nearly in all business segments: large corporates (down 6.6% to RUB 318 636.3 million), retail business (down 3.0% to RUB 176 430.7 million), small and micro business (down 1.8% to RUB 14 541.5 million). The appreciation of rouble compared to the end of 2015 resulted in negative revaluation of the gross loan portfolio, which contributed to its reduction.
The Bank’s conservative credit policy makes it possible to ensure high quality of assets. The share of loans individually determined to be impaired in the total loan portfolio was 9.3% at the end of the 1st quarter of 2016.
Customer accounts decreased by 3.9% compared to the end of 2015 to RUB 558 753.4 million resulting from the revaluation of foreign exchange current accounts and deposits.
Term borrowings from the Parent bank were RUB 42 409.3 million, down by 23.2% compared to RUB 55 241.4 million at the end of 2015 due to scheduled and partial prepayments. The share of the term funding from Parent bank in total bank’s liabilities was 6.1% as of
The bank’s equity rose by 5.2% or RUB 4 890.4 million compared to the end of 2015 reaching RUB 99 602.9 million primarily as a result of the bank’s profit after tax earned in the 1st quarter of 2016.
Total Basel III capital adequacy ratio rose 2.5 percentage points compared to the end of 2015 reaching 23.1%. The
|1st quarter 2015, |
|1st quarter 2016, |
|Net interest income before provisioning for impairment losses||11 890.5||10 532.8||-11.4%|
|Charge of provision for loan impairment||3 732.3||4 051.7||+8.6%|
|Net fee and commission income||2 682.9||3 219.7||+20.0%|
|Trading result||2 997.1||2 326.5||-22.4%|
|Administrative and other operating expenses||5 646.1||6 079.1||+7.7%|
|Profit before tax||8 518.6||6 155.0||-27.7%|
|Profit after tax||6 887.1||4 867.1||-29.3%|
|ROE before tax||35.3%||25.3%||-10.0 p.p.|
|ROE after tax||28.5%||20.0%||-8.5 p.p.|
|Assets||858 545.6||791 496.1||-7.8%|
|Liquid assets||242 316.4||214 871.9||-11.3%|
|Loans and advances to customers before provision:||558 071.4||530 347.1||-5.0%|
|Retail customers||181 915.5||1176 430.7||-3.0%|
|Small and micro business||14 807.0||14 541.5||-1.8%|
|Middle business||20 183.0||20 738.0||+2.8%|
|Large corporates||341 165.2||318 636.3||-6.6%|
|Customer accounts||581 270.4||558 753.4||-3.9%|
|Term borrowing from Parent bank||55 241.4||42 409.3||-23.2%|
|Equity||94 712.5||99 602.9||+5.2%|
|Share of loans individually determined |
to be impaired in total loan portfolio
|Total Basel III capital adequacy ratio||20.6%||23.1%||+2.5 p.p.|
|H1.0 capital ratio (calculated in accordance |
with the CBR methodology)
1 Calculated on the basis of Basel III requirements in accordance with the methodology of the Central Bank of the Russian Federation.
2 Calculated by subtracting from «Operating income» the following items: «Provisions for loan impairment», «Provisions for credit related commitments», «Provisions for investment securities held to maturity».
3 Trading result includes: losses net of gains from trading securities, gains less losses from other securities at fair value through consolidated profit or loss, gains less losses/(losses, net of gains) from redemption of investment securities available for sale, gains less losses from trading in foreign currencies, unrealized gains less losses/(losses, net of gains) from derivative financial instruments, realized gains less losses from derivative financial instruments (excluding realized result from derivative financial instruments —
4 Includes the following items: gains less losses from trading in foreign currencies; realized gains less losses/(losses, net of gains) from derivative financial instruments; foreign exchange translation (losses, net of gains)/gains, net of losses; ineffectiveness from the hedge accounting.
5 A relation of additional provisions to the average loan portfolio for the period. Annualized.
AO Raiffeisenbank is a subsidiary of Raiffeisen Bank International AG. Raiffeisenbank ranks 13th among the Russian banks in terms of assets, based on Q1 2016 results (
Raiffeisen Bank International AG (RBI) regards both Austria, where it is a leading corporate and investment bank, as well as 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 15 markets. In total, around 51,700 employees service 14.9 million customers through more than 2,600 business outlets, the great majority of which are located in CEE. Raiffeisen Bank International is a