Austria’s Raiffeisen
International, the third-largest bank by assets in Central and
Eastern Europe (CEE), has posted a full year 2010 net income of
€1.09bn ($1.57bn), more than doubling its pro-forma net profit of
€450m the previous year.
Highlights for the 12
months to 31 December, included:
- Net provisions for impairment losses fell
by 46.5% to €1.19bn; - Net interest income rose by 9% to
€3.58bn; - Net fee and commission income increased
by 4.9% to € 1.49bn - Core tier 1 ratio increased by 40 basis
points to 8.9% while the Tier 1 ratio rose by 30 basis points to
9.7%.
Raiffeisen’s NPL ratio
– the proportion of non-performing loans in its
loan portfolio – stood at 9.0% at the end of the reporting
period.
Raiffeisen said that the
NPL growth rate had slowed down considerably since the start
of the second half of 2010. During the fourth quarter, the bank
observed a decline in the existing stock of non-performing loans in
Russia, the Czech Republic, Poland and Romania.
Less positive was an
increase of 2.6 percentage points in the cost-income ratio, to
55.1%.
General administrative
expenses grew by 10% or € 264 million to € 2.98bn; Raiffeisen
blamed part of the increase on currency appreciation in
2010. Staff expenses increased by 8% to €1.45bn.
Total assets declined by
9.9% during fiscal 2010 to €131.2bn.
Retail banking
highlights in 2010 included an increase of 5% in deposits from
€21.4bn to €22.5bn.
Raiffeisen successfully
focused on account and product packages in order to increase credit
margins and cultivate long-term customer relationships.
A new “primary
relationship banking initiative” was also launched.
In the first quarter of
2011, Raiffeisen is rolling out a premium service line for affluent
banking in Raiffeisen’s 15 retail markets with the launch of
Raiffeisen Bank Aval Premium Banking. Raiffeisen ended 2010 with a
total branch network across the group of 2,961 outlets, a net
reduction of 68 units during the year.
Total customers fell
sharply, from 15.1m at the end of 2009 to 14m a year later, due to
the exclusion of customers who had been inactive.
Herbert Stepic, CEO of
Raiffeisen Bank International, said:
“We have ensured that we
are well-positioned to meet future challenges and market
requirements. Central and Eastern Europe has, on the whole,
achieved the turnaround and all of the region’s countries are seen
back on the path of growth in 2011.
“This should result in a
clear rise in the demand for financial products – something for
which we are also well-prepared.”
Stepic told analysts
that analysts that Raiffeisen had not ruled out the possibility of
raising additional capital; as he told RBI in an interview in February, he
forecast NPLs to peak by the middle of 2011.
