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According to Market Intelligence, April 2023

Polish business sale dents RBI Q2 profit YOY to €357M

Raiffeisen Bank International AG reported second-quarter consolidated profit of €357 million, down from €367 million a year earlier.

The lender noted that the decline is primarily due to the expected €121 million loss recognized in the quarter from the sale of the core banking operations of Polish unit Raiffeisen Bank Polska SA to BNP Paribas SA unit Bank BGZ BNP Paribas SA.

Net interest income rose on a yearly basis to €834 million from €796 million. Net fee and commission income also increased, to €460 million from €433 million.

The Austrian lender did not book any impairment losses on financial assets in the quarter, compared to €18 million in the second quarter of 2017. RBI said it expects impairment losses on financial assets in 2018 to be below the 2017 level.

For the first half, RBI's consolidated profit rose 28.7% year over year to €756 million from €587 million. EPS for the half was €2.21, compared to the year-ago €1.79.

Consolidated return on equity stood at 15.5%, compared to 12.9% in the first half of 2017. The bank has a consolidated ROE target of approximately 11% in the coming years.

The bank's cost-to-income ratio fell year over year to 56.0% from 58.9%. RBI aims to achieve a cost-to-income ratio of below 55% in the medium term.

The lender's nonperforming loans ratio stood at 4.8% at the end of June, compared to 5.7% at 2017-end. The lender expects the NPL ratio to decline further in the medium term. The NPL coverage ratio was 73.5% at June 30, compared to 67.0% at Dec. 31, 2017.

RBI's transitional and fully loaded common equity Tier 1 ratios both stood at 12.8% at the end of June, compared to 12.9% and 12.7%, respectively, at the end of 2017. The lender aims to achieve a fully loaded CET1 ratio of around 13% post dividend in the medium term.