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23.03.10

Consolidated profit of € 212 million thanks to solid business model



  • Net interest income declines 9 per cent compared to 2008 to  2,937 million
  • General administrative expenses reduced by 14 per cent to  2,270 million
  • Profit from operating activities down 8.5 per cent year-on-year to  2,056 million (2008:  2,247 million)
  • Results strongly influenced by net allocations to provisioning for impairment losses of 1,738 million (up 123 per cent year-on-year)
  • Profit after tax  287 million (minus 73 per cent)
  • Cost/Income ratio improves by 1.5 percentage points to 52.5 per cent (2008: 54.0 per cent)
  • Return on equity before tax declines by 16.3 percentage points to 5.7 per cent (2008: 22 per cent)
  • Core capital ratio (Tier 1), credit risk 14.1 per cent (plus 4.4 PP y-o-y); core capital ratio (Tier 1), total 11.0 per cent (plus 2.9 PP y-o-y)
  • Customer base grows to 15.1 million


All figures are based on International Financial Reporting Standards (IFRS).

Raiffeisen International Bank-Holding AG, a member of the RZB Group headed by Raiffeisen Zentralbank Osterreich AG (RZB), posted a 2009 consolidated profit (after tax and minorities) of  212 million, which represents a decrease of 78.4 per cent on the preceding year (2008:  982 million). Raiffeisen Internationals profit was sharply influenced by an increase in net allocations to provisioning for impairment losses by 122.7 per cent to  1,738 million, compared to the year-end 2008 value of  780 million. Profit before tax declined by 74.3 per cent to  368 million (2008:  1,429 million), while profit after tax declined by 73.4 per cent to  287 million (2008:  1,078 million). Earnings per share declined by  5.40 to  0.99 (2008:  6.39). The Managing Board will propose to the Annual General Meeting a dividend of  0.20 per share for the year 2009, which would represent a decline of 78.5 per cent against the preceding year. If the Annual General Meeting approves this proposal, the total dividend payment would come to  30.9 million.

Not only do these results underline the sustainability of our business model, we also managed to clearly beat the analyst consensus. Raiffeisen International also made use of this challenging year to undertake a broad number of internal organizational adjustments and changes. We feel that we are very well-positioned in an environment marked by improving economic indicators, said CEO Herbert Stepic.

Profit from operating activities down 8.5 per cent year-on-year

Despite the sharp economic downturn in most CEE countries, Raiffeisen Internationals operating income declined in 2009 by only 8.5 per cent, or  191 million, to  2,056 million compared with the preceding years level.

Significant rise in provisioning for impairment losses

Net allocations to provisioning for impairment losses in the reporting year totaled  1,738 million and thus registered an increase of  958 million, or 123 per cent. That includes income from the sale of loans amounting to  13 million. Less that income, individual provisions accounted for  1,565 million, and portfolio-based provisions for  186 million. A look at the development over the year reveals a slight flattening of momentum in net allocations after the second quarter of 2009, when the largest net allocations were made.

General administrative expenses reduced by 14 per cent  Cost/income ratio improved once again

With the onset of the economic crisis in the CEE region, cost-cutting programs were immediately started. General administrative expenses fell significantly in the reporting year, by 14 per cent, or  363 million, to  2,270 million. The main reasons for that were strict cost management in the Group and currency devaluation in the CEE countries.

Unlike previous years in which our costs had increased by more than 20 per cent annually, we managed to drive down costs significantly in 2009. The measures that we implemented to achieve those cost reductions have led to continuing efficiency gains, CFO Martin Grll said.

Staff costs were again the largest item among general administrative expenses in 2009, accounting for 46 per cent. However, they fell by 17 per cent, or  222 million, on the preceding year to  1,054 million. The effects of cost-cutting measures such as personnel reduction and not filling vacant positions as well as bonus cuts, began to appear.

The number of employees on 31 December 2009 stood at 56,530 in contrast to 63,376 employees at the end of 2008. That means a reduction by 6,846 employees, or 11 per cent.

The decline of general administrative expenses by 14 per cent in the reporting period was greater than that of operating income by 11 per cent. That resulted in another improvement in the cost/income ratio, a key measure of bank efficiency representing the ratio of operating expenses to operating income, by 1.5 percentage points from 54.0 to 52.5 per cent.

Balance sheet total of  76 billion

For the first time after many years of growth, Raiffeisen International Groups balance sheet total declined in the year under review. It fell year-on-year from  85.4 billion to  76.3 billion, which means a reduction of 11 per cent, or  9.1 billion. Measures to reduce and stabilize the loan portfolio and increased provisions for impairment losses were largely responsible for that. Changes in the scope of consolidation, on the other hand, had no appreciable effects. The strong devaluation of currencies which began in the fourth quarter of 2008 slowed to some extent in the course of 2009. Some currencies even gained in value again. As a result, exchange rate movements had a significantly smaller influence on the development of the balance sheet total than in the preceding year.

Solid basis of 15.1 million customers

The number of business outlets came to 3,018 at the end of the year, which represents a net decrease on the preceding years level by 213 business outlets. Due to further location optimizing measures, the number in the CIS Other segment fell year-on-year by 188 business outlets (181 in Ukraine and 7 in Belarus), and by 22 in Russia. Closures also led to a minus of 23 business outlets in Central Europe (in Slovakia and Hungary). The only net increase occurred in Southeastern European, by 20 business outlets.

The customer base grew from 14.7 million at the end of 2008 to 15.1 million.

You can access the web-version of Raiffeisen Internationals annual report at ar2009.ri.co.at. A printed English-language version can also be ordered on that webpage.

Raiffeisen International operates one of the largest banking networks in CEE, covering 17 markets across the region through subsidiary banks, leasing companies and a range of other financial service providers. The groups ca. 56,500 employees service around 15.1 million customers via more than 3,000 business outlets. Raiffeisen International is a fully-consolidated subsidiary of Raiffeisen Zentralbank Osterreich AG (RZB), which owns about 70 per cent of the common stock. The remainder is in free float, with the shares listed on the Vienna Stock Exchange. RZB is a leading corporate and investment bank in Austria and the central institution of the Austrian Raiffeisen Banking Group, the countrys largest banking group.



For further information please contact Michael Palzer (+43-1-71 707-2828, michael.palzer@ri.co.at) or Peter Klopf (+43-1-71 707-1930, peter.klopf@ri.co.at).

www.ri.co.at, www.rzb.at

 

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