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13.10.06

Raiffeisen International to improve expectations on Group consolidatedprofit at «Capital Markets Day» conference in Kiev

The second conferenceCapital Markets Day arranged by Raiffeisen International Bank-Holding AG received a very positive response on part of the financial community.

Over 110 analysts and investors from the world largest financial centersattended the event to get wise to the activity of RaiffeisenInternational Banking Group.

The conferenceCapital Markets Day took place in Kiev, the capital of Ukraine, and became the first event of such kind that was held in one of 15 countries of Central and Eastern Europe where Raiffeisen International Group banks are represented. The location of the event, on the onehand, outlines the leading position of Raiffeisen International Group in CIS countries and, on the other hand, proves the special importance of the Ukrainian market and Bank Aval for the Group. This banks, which became the largest acquisition in the history of RaiffeisenGroup is renamed to JSC Raiffeisen Bank Aval.

All Board Members of Raiffeisen International took part in theconferenceCapital Markets Day. It was the first time, the representatives from Group subsidiary banks management demonstrated the audience their achievements in the field of JSC Raiffeisen Bank Aval integration to Raiffeisen Group, as well as the legal merger of JSC Impexbank and ZAO Raiffeisenbank Austria in Russia. Moreover, the management representatives delivered a number of reports devoted to different strategic projects of the Group.

Speed-up of integration with JSCImpexbank - agreement on the final purchase price reached before the target date

Raiffeisen International Group and the former owners of JSCImpexbank managed to come early to an agreement on the second tranche volume in JSC Impexbank deal. At the time of acquisition the agreement provided for payment in two tranches: the first payment at the amount of USD 500 mln was effected at the date of the deal closing in May 2006, the payment of the second tranche for a total of USD 50 mln was scheduled for 2007 based on the results of the audited financial statements for the year 2006. Moreover, under terms and conditions of purchase agreement signed in January 2006, the valueof JSC Impexbank Head Office building must be re-appraised by an independent appraiser.

According to the recently achieved agreement the amount of the secondtranche will be USD 25 mln, and upon the results of the buildingre-appraisal the dealmount was increased by USD 30.2 mln. Accordingly, the overall amount of the deal was USD 555.2 mln. This agreement allows Raiffeisen International to speed up the process of reorganization in form of JSC Impexbank accession to ZAO Raiffeisenbank Austria scheduled for 2007.

In addition, the participants of theCapital Markets Day conference were announced with information on the future brand and the management of the combined bank. After the legal merger the new bank will be referred to as ZAO Raiffeisenbank Austria. The Management Board of the Bank will comprise nine people. Johann Jonach, the current CEO of Raiffeisenbank, will be appointed CEO of the combined bank.

Consolidated profit of the Group to be increased to EUR 550 million in2006

In the same way as before, the management of Raiffeisen Internationalconfirmed the positive outlook for the future development of the Group.The Management Board of Raiffeisen International expects a stable growthof revenues in a medium-term period in CIS countries, primarily inUkraine and Russia. Alongside with that, one recognizes thatrestructuring process in Bank Aval and Impexbank can have an impact onthe growth rate of profit in a short-term perspective.

Raiffeisen International in the same positive way assesses the potentialof countries in South-Eastern Europe, though pointing out a possibleimpact of loan increase restrictions, prescribed by regulatory agencies.In Central Europe the Group is even more focused on the booming marketof asset management and insurance, along with traditional bankingproducts.

We expect that in 2006 our consolidated profit will account for about EUR 550 mln. This amount does not include funds raised through sales of Raiffeisenbank Ukraine and minority shareholding of Bank TuranAlem, - stated Herbert Stepic, CEO of Raiffeisen International, while commenting a positive business development of the Group.

Previously, Raiffeisen International predicted the consolidated profitof the Group for the current year to be not less than EUR 500 mln.

Upon the Management Board estimation, for the period up to the year 2008the assets of the Group will grow no less than 20% p.a. The biggestgrowth will be observed in CIS countries that is partially due to theacquisitions in this region. During the same period the branch networkin Central and Eastern Europe will extend to 450 business outlets.

By the end 2009 Raiffeisen International plans to achieve a return onequity ratio (ROE) before taxation to the extent of over 25%. Costincome ratio is also expected to decrease to 58%, and risk earningsratio to 15%.

Every autumn Raiffeisen International Group holds aCapital Markets Day. This is an event that facilitates data and opinion communication process between the representatives of the financial community on the highest level.

Information on Investor''s Handbook published on the occasion of theCapital Markets Day can be found on the web-site:http://www.ri.co.at/cmdhandbook2006.

Raiffeisen International is one of the leading banking groups in Centraland Eastern Europe and operates subsidiary banks and leasing companiesin 16 markets. Over 11 million customers are attended through more than2,700 business outlets. Representative offices in Lithuania and Moldovacomplement the Group''s presence in the region. Raiffeisen Internationalis a fully consolidated subsidiary of Raiffeisen Zentralbank OsterreichAG (RZB), which owns 70 per cent of the common stock, the remaining 30per cent is free float and the shares are traded on the Vienna StockExchange. RZB is a leading corporate and investment bank in Austria andthe central institution of the Austrian Raiffeisen Banking Group, thecountry''s largest banking group.

Based on the first half of the year 2006 results the balance-sheet totalofRaiffeisen International amounted to EUR 46.3 bln (14% growth in comparison with 2005 results). Consolidated profit (after payments to minority shareholders) rose 56% to EUR 289 mln versus the first half of the year 2005.

For additional information please contact Michael Palzer (+43.1/71707-1504,michael.palzer@ri.co.at)or Martin Schreiber (+43.1/71 707-1562,martin.schreiber@ri.co.at).

http://www.ri.co.at,http://www.rzb.at

 

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