RBI: 1-9/2023 results
RBI: 1-9/2023 results
Consolidated profit amounts to 2.114 billion euros
- Capital base strengthened
- Significant decrease in risk costs
- Further reduction of Russian business
Raiffeisen Bank International (RBI) achieved a consolidated profit of 2.114 billion euros in the first three quarters of 2023. Core revenues (net interest income as well as net fee and commission income) without the Russian and Belarussian business rose by 20 per cent year-on-year.
"We are very satisfied with the first three quarters. The good earnings development persisted in the third quarter. At the same time, the reduction of our Russian business continues to make good progress," said RBI CEO Johann Strobl.
Significant decrease of risk costs
In the reporting period, impairment losses on financial assets were significantly lower at 251 million euros than in the comparable period of 721 million euros. Impairment losses in Eastern Europe continued to dominate due to the ongoing Russian war of aggression in Ukraine. Risk costs in Eastern Europe totaled 225 million euros compared to 569 million euros in the previous-year period. 147 million euros (previous-year period: 299 million euros) related to Russia and 74 million euros (previous-year period: 247 million euros) to Ukraine.
Further reduction of Russian business
In the third quarter of 2023, RBI further reduced its Russian business. Since the beginning of the year, the loan volume in Russia was scaled back by 30 per cent. At the end of June 2023, the decline was 21 per cent. With a loan volume of around 6.3 billion euros, Raiffeisenbank Russia is now only the fourth-largest subsidiary of RBI. In addition, RBI reduced its payment business with Russia and terminated all business relationships with Russian correspondent banks except for its subsidiary Raiffeisenbank Russia.
"We continue to work on options leading to deconsolidation. In doing so, we depend on numerous regulatory approvals from Russian and European authorities and can therefore influence the pace only to a very limited extent," Strobl explained.
CET1 ratio (transitional) of 16.5 per cent
RBI further strengthened its capital base in the third quarter. Including the results of the first three quarters of 2023, this resulted in a CET1 ratio of 16.5 per cent, already taking the proposed dividend for 2022 into account. The CET1 ratio in the event of a deconsolidation of the
Russian subsidiary bank without taking its equity into account would have been 14.4 per cent at the end of the quarter, significantly above the regulatory
requirements.
"We are pleased that our good capitalization allows us to propose to our shareholders the payout of a dividend of 80 cent per share for the 2022 financial year at an extraordinary general meeting on 21 November," said Strobl.
Outlook
The following guidance refers to RBI excluding Russia and Belarus, whereas the
corresponding figures in brackets refer to the existing footprint. RBI will
continue to progress potential transactions which would result in the sale or
spin-off of Raiffeisenbank Russia and deconsolidation of Raiffeisenbank Russia
from RBI.
In 2023, net interest income is expected between 4.2 and 4.3 billion euros
(between 5.6 and 5.7 billion euros) and net fee and commission income around 1.8 billion euros (between 2.9 and 3.0 billion euros).
We expect customer loan growth to increase by around 2 per cent (minus 1 per
cent).
We expect general administrative expenses around 3.1 billion euros (around 4.0
billion euros), resulting in a cost/income ratio of around 50 per cent (43 to
45 per cent).
The provisioning ratio – before use of overlays – is expected to be around 30
basis points (around 40 basis points).
The consolidated return on equity is expected to be around 10 per cent (around 16 per cent) in 2023.
At year-end 2023 we expect a CET1 ratio above 13.5 per cent*
(above 16.5 per cent). Any decision on dividends will be based on the capital position of the Group excluding Russia.
Medium term return on equity and payout ratio targets are
suspended due to current uncertainties in Eastern Europe.
*
In a ‘P/B Zero‘ Russia deconsolidation scenario.