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RBI doubled profit and increased capital ratio significantly
24. 05. 2012.
All figures are based on International Financial Reporting Standards (IFRS).
Raiffeisen Bank International AG (RBI) posted a consolidated profit of € 541 million in the first quarter of 2012, which represents an increase of 100.4 per cent compared to the first quarter of the preceding year (Q1 2011: € 270 million). "Despite the challenging environment, we were able to maintain the previous year’s success with our first quarter results. Even deducting the one-off effects we can be very satisfied with the profit we have achieved," said Herbert Stepic, CEO of RBI. RBI’s profit before tax increased by 69.1 per cent to € 685 million (Q1: € 405 million) and its profit after tax rose by 87.9 per cent to € 574 million (Q1 2011: € 305 million). Earnings per share increased from € 1.13 in the first quarter of 2011 by € 1.39 to € 2.52.
Good results due to lower provisioning and positive market movements
RBI's comprehensive income developed positively despite a slight decrease in operating income, which amounted to € 1,295 million in the first quarter of 2012 (Q1 2011: € 1,341 million). On the one hand, this was due to significantly lower net provisioning for impairment losses, which fell by 26.5 per cent to € 153 million (Q1 2011: € 208 million), as well as positive movements in the market. On the other hand, two one-off effects in connection with the requirements of the European Banking Authority (EBA) to achieve a total core tier 1 ratio of 9 per cent (applicable for the RZB Group) resulted in positive contributions to earnings: Pre-tax earnings of € 159 million from further sales of the Group headquarters' securities portfolio were realized. In addition, a profit before tax of € 113 million was earned on the buyback of € 358 million of hybrid bonds (hybrid tier 1 capital).
Net provisioning for impairment losses declined by 27 per cent
Net provisioning for impairment losses further decreased compared to the previous year, by 27 per cent or € 55 million to € 153 million, as the situation improved particularly in the CIS Other and Group Corporates segments. In Ukraine, the provisions for retail customers in particular were reduced significantly because of the improved quality of the portfolio and higher income from the collection of collateral. In the Group Corporates segment, provisions were released specifically in the Group headquarters' corporate customer business. In the other segments, allocations to provisioning also fell slightly or remained at the same level as in 2011.
ROE before tax increased to 25.1 per cent
Return on equity before tax, which is crucial for an assessment of business performance, rose by 9.5 percentage points to 25.1 per cent, mainly because of the higher profit.
General administrative expenses at the same level as in previous year
At € 753 million, general administrative expenses remained at exactly the same level as in the comparable period of the previous year. Lower income, however, meant that the cost/income ratio increased by 2.0 percentage points to 58.2 per cent.
The largest item under general administrative expenses was staff expenses which accounted for 51 per cent and which rose slightly overall by € 2 million to € 381 million. While it increased in Russia, Ukraine and Austria, it declined in Hungary, the Czech Republic and Romania.
Total assets increased by 1 per cent compared to year-end 2011
As of 31 March 2012, the total assets of RBI amounted to € 148.8 billion, up 1 per cent or € 1.8 billion on the end of 2011. Only a very small part of this was due to currency effects. The increase in assets resulted from higher loans and advances to customers and the higher cash reserve, while an increase in deposits from banks and customers led to an increase in liabilities.
Loans and advances to customers accounted for the largest share of assets. These came to 52 per cent of total assets and rose by 1 per cent to € 82.5 billion, specifically due to higher loans and advances to the public sector at Group headquarters and growth in the credit business in Russia.
Tier 1 ratio increased to 10.7 per cent
RBI’s balance sheet equity, consisting of consolidated equity, consolidated profit and the capital of the non-controlling interests, increased by 5 per cent or € 538 million to € 11,474 million compared to the end of 2011.
In total, this results in an excess cover ratio of 83.5 per cent or € 5,759 million, an improvement of 14.8 percentage points. Based on total risk, the core tier 1 ratio was 10.2 per cent, with a tier 1 ratio of 10.7 per cent. The own funds ratio increased to 14.7 per cent.
EBA target ratio fulfillment for RZB Group as planned
At the end of October, the European Banking Authority (EBA) presented a target core tier 1 ratio, according to the EBA's definition, of 9 per cent for the systemically-relevant banks in Europe. In Austria, this group of banks includes Raiffeisen Zentralbank Österreich AG (RZB) as the superordinate financial institution of the RZB Group (Kreditinstitutsgruppe), of which RBI is the largest sub-group.
The new minimum capital ratio must be reached by 30 June 2012. Taking into consideration measures already completed or close to their conclusion, the RZB Group currently reaches a core tier 1 ratio according to the EBA’s definition of 9.3 per cent and is therefore in line with the plan.
* * * * *You can access the interim report at http://www.rbinternational.com/ir/berichte. The English version is available at http://www.rbinternational.com/ir/reports.
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