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RBI: First Quarter Report 2021

Vienna,

Johann Strobl: “Credit demand picked up in March“

  • Net interest income stable quarter-on-quarter; net interest margin reflects excess liquidity
  • Net fee and commission income almost fully recovered despite weaker exchange rates and prolonged lockdowns
  • General administrative expenses down 5 per cent year-on-year
  • Provisioning ratio at 0.35 per cent due to very low inflow of defaulted loans (stage 3)
  • Consolidated profit improved 22 per cent year-on-year to € 216 million, supported by lower risk costs
  • Loans to customers up 1 per cent year-to-date
  • CET1 ratio stable at 13.6 per cent (incl. first quarter result)

Raiffeisen Bank International‘s (RBI) consolidated profit improved by more than a fifth to € 216 million in the first quarter of 2021 – despite ongoing headwinds as RBI’s economic environment continues to be dominated by the COVID-19 pandemic and its impacts. This is also clearly visible in currency movements, with significant depreciation pressure on numerous CEE currencies in the 2020 financial year, even though the first three months of 2021 brought a noticeable appreciation trend. Further influencing factors on consolidated profit included the ongoing low interest rate environment, subdued demand for loans and banking services due to the economic situation, as well as excess liquidity in the group.

"We are satisfied with the development in the first quarter. Credit demand picked up in March. Thanks to the progress in vaccinations, we sense a positive mood. The economic recovery is visible and will continue sustainably over the next two years,” said RBI-CEO Johann Strobl. 

General administrative expenses decreasing

Operating income declined 11 per cent year-on-year to € 1,259 million with net interest income decreasing by 13 per cent to € 767 million, as a result of interest rate cuts in numerous markets of the group and of currency depreciations, especially in Russia and Ukraine. Net fee and commission income was down 3 per cent to € 434 million, mainly due to lower volumes as a result of COVID-19 and to currency depreciations

General administrative expenses were down 5 per cent year-on-year to € 692 million withcurrency movements resulting in a € 35 million reduction.

Significant decline in impairment losses on financial assets

Impairment losses on financial assets in the amount of € 79 million were recognized in the reporting period, a decline by almost half compared with € 153 million in the previous year’s period.

The NPE ratio was slightly down to 1.8 per cent with a decrease of 0.1 percentage points on the end of the year, mainly due to an increase indeposits  at central banks, while the NPE coverage ratio went down 0.3 percentage points to 61.2 per cent.

 CET1 ratio (fully loaded) at 13.6 per cent

Including the first quarter results, the (fully loaded) capital ratios are as follows: CET1 ratio 13.6 per cent, tier 1 ratio 15.6 per cent, and total capital ratio 18.1 per cent.

Quarterly results

Compared to the fourth quarter of 2020, operating income increased € 12 million to € 1,259 million in the first quarter of 2021.

General administrative expenses decreased € 85 million quarter-on-quarter to € 692 million, primarily due to seasonal effects.

Impairment losses on financial assets amounted to € 79 million in the first quarter of2021, following € 133 million in the fourth quarter of 2020.

In the reporting period, consolidated profit rose by € 11 million to € 216 million.

Outlook

We expect modest loan growth in the first half of 2021, accelerating in the second half of the year.

The provisioning ratio for FY 2021 is expected to be around 75 basis points, as moratoria and government support programs expire.

We remain committed to a cost/income ratio of around 55 per cent – possibly as soon as 2022 depending on the speed of the recovery.

We expect the consolidated return on equity to improve in 2021, and we target 11 per cent in the medium term.

We confirm our CET1 ratio target of around 13 per cent for the medium term.

Based on this target we intend to distribute between 20 and 50 per cent of consolidated profit.

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The quarterly report is available at http://qr012021.rbinternational.com, the German version at http://zb012021.rbinternational.com.

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RBI regards Austria, where it is a leading corporate and investment bank, as well as Central and Eastern Europe (CEE) as its home market. 13 markets of the region are covered by subsidiary banks. Additionally, the RBI Group comprises numerous other financial service providers, for instance in leasing, asset management or M&A.

Around 45,000 employees service 17.4 million customers through approx. 1,800 business outlets, the by far largest part thereof in CEE. RBI's shares are listed on the Vienna Stock Exchange. The Austrian regional Raiffeisen banks own around 58.8 per cent of the shares, the remainder is in free float. Within the Austrian Raiffeisen Banking Group, RBI is the central institute of the regional Raiffeisen banks and other affiliated credit institutions.

For further information please contact:

Ingrid Krenn-Ditz (+43-1-71 707-6055, ingrid.krenn-ditz@rbinternational.com ) or Christof Danz (+43-1-71 707-1930, christof.danz@rbinternational.com) www.rbinternational.com 

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