Raiffeisen Bank International (RBI) reported that its profit before tax was € 188 million, which represents a year-on-year decline of 22 percent, or € 52 million.
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Profit after tax fell 42 percent year-on-year to € 100 million. Consolidated profit stood at € 83 million in the first quarter, which corresponds to a decline of 48 percent, or € 77 million.
The average number of shares outstanding in the reporting period totaled 292.4 million (comparable period from the previous year: 268.1 million). This resulted in earnings per share of € 0.29.
Net interest income decreased 16 percent. Operating income declined 17 percent, or € 227 million, year-on-year to € 1,118 million. This was primarily attributable to valuation losses from strong currency fluctuations (notably in the Russian rouble and Ukrainian hryvnia).
In the first three months of 2015, net interest income fell 16 percent, or € 158 million, to € 820 million year-on-year. Aside from being attributable to a reduced net interest margin, this was also due to currency-related declines in interest income in Russia and Ukraine and to loan defaults in Asia. Group head office also recorded a volume-based decline in net interest income.
Net fee and commission income fell 4 percent, or € 16 million, to € 360 million year-on-year, largely due to currency-related effects.
Compared to the same period last year, net trading income declined € 43 million to minus € 62 million, largely due to a € 109 million decline in currency-based transactions to minus € 149 million. This was largely attributable to exchange rate-related valuation losses on foreign currency positions in Ukraine, where net trading income reduced due to the sharp depreciation of the Ukrainian hryvnia (down € 64 million) and to a valuation loss on a hedging transaction for dividend income in Russian roubles (down € 53 million) at Group head office.
Compared to the same period last year, general administrative expenses declined € 64 million to € 691 million. The cost/income ratio increased 5.7 percentage points to 61.8 percent, notably due to the currency effects which reduced net trading income.
At 50 percent, the largest component in general administrative expenses was staff expenses, which fell 11 percent, or € 45 million, to € 345 million.
Compared to the same period last year, net provisioning for impairment losses fell by a total of 7 percent, or € 21 million, to € 260 million. This was predominantly due to a € 50 million reduction in individual loan loss provisions to € 220 million, while portfolio-based provisioning increased € 29 million to € 42 million.
In the reporting period, the NPL ratio rose 0.5 percentage points to 11.9 percent compared to year-end 2014. Non-performing loans were set against loan loss provisions of € 6,306 million, resulting in a NPL coverage ratio of 65.9 percent compared to 67.4 percent at the year-end.
Total capital amounted to € 11,271 million as at 31 March 2015. This represents an increase of € 267 million compared to the 2014 year-end figure.
Based on total risk, the common equity tier 1 ratio (transitional) was 10.4 percent, with a total capital ratio (transitional) of 15.3 percent.
Compared to the fourth quarter of 2014, net interest income declined 8 percent, or € 75 million, to € 820 million in the first quarter of 2015.
Net fee and commission income dropped 14 percent, or € 58 million, to € 360 million compared to the fourth quarter of 2014. The decline was due to both currency-related and seasonal factors.
Compared to the previous quarter, net trading income improved € 6 million to minus € 62 million. This was triggered by an increase in net income from interest-based transactions in Russia and at Group head office, primarily as a result of valuation gains from securities positions and derivatives.
At € 691 million in the first quarter of 2015, general administrative expenses were down 5 percent, or € 38 million, from € 728 million in the previous quarter.
Compared to the previous quarter, net provisioning for impairment losses fell 59 percent, or € 373 million, to € 260 million. This was mainly attributable to developments in Asia, Ukraine, Hungary and Poland.
Consolidated profit for the first quarter 2015 was at € 83 million, which represents an increase of € 801 million compared to the fourth quarter of 2014.
RBI is planning an aggregate gross risk-weighted asset (total RWA) reduction of € 16 billion in selected markets by the end of 2017 (based on RWA as at December 2014: EUR 68.7 bn). The bank intends to partly offset the reduction with growth in other business areas. ■