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RBI posts 81.4% YOY increase in Q1 profit

Raiffeisen Bank International AG posted an 81.4% year-over-year increase in first-quarter profit and a reduction in its exposure to nonperforming loans.

The Austrian lender reported first-quarter consolidated profit of €399 million, up from €220 million in the same period in 2017. EPS for the period increased to €1.17 from the year-ago 67 cents.

Consolidated return on equity was 16.6% in the period, up from 9.6% a year ago. RBI said it aims to achieve a consolidated ROE of about 11% in the medium term.

Net interest income rose on a yearly basis to €829 million from €797 million, while net fee and commission income increased to €410 million from €409 million a year earlier.

The bank booked a reversal on impairment losses on financial assets of €83 million, compared to a charge of €82 million a year earlier. Levies and expenses from special governmental measures amounted to €132 million, up from €120 million a year prior.

The bank's cost-to-income ratio fell year over year to 57.3% from 59.5%. RBI intends to achieve a cost-to-income ratio of below 55% in the medium term.

As of March 31, the bank's nonperforming loan ratio was 5.4%, down quarter over quarter from 5.7%. The NPL coverage ratio increased to 69.7% from 67.0% at the end of 2017. The bank anticipates that its NPL ratio will further go down in the medium term.

The nonperforming exposure ratio was 3.6% at March-end, down from 4.0% at the end of 2017. The NPE coverage ratio ticked up quarter over quarter to 56.2% from 56.1%.

The bank's fully loaded common equity Tier 1 ratio stood at 12.8% at the end of March, compared to 12.7% at 2017-end. The transitional CET1 ratio was also 12.8% at March-end, compared to 12.9% at 2017-end. RBI aims to achieve a post-dividend fully loaded CET1 ratio of around 13% in the medium term.

The bank added that it will pursue a mid-single-digit average yearly increase in loan growth. Impairment losses on financial assets in 2018 are also expected to be around the same level of that in 2017.