RBI posts consolidated 2017 profit of € 1,116 million
Net interest income increases 0.3 per cent year-on-year to € 3,208 million (2016: € 3,197 million)
- Operating income increases 2.3 per cent to € 5,228 million (2016: € 5,112 million)
- General administrative expenses decrease 1.2 per cent to € 3,104 million (2016: € 3,141 million)
- Net provisioning for impairment losses decreases 62.1 per cent to € 287 million (2016: € 758 million)
- Profit before tax increases 70.4 per cent to € 1,612 million (2016: € 946 million)
- Profit after tax increases 95.8 per cent to € 1,246 million (2016: € 636 million)
- Consolidated profit increases 114.6 per cent to € 1,116 million (2016: € 520 million)
- Non-performing loan ratio decreases 3.0 percentage points to 5.7 per cent compared to year-end 2016
- Common equity tier 1 ratio (transitional) increases 0.2 percentage points to 12.9 per cent
- Common equity tier 1 ratio (fully loaded) increases 0.3 percentage points to 12.7 per cent
- Earnings per share of € 3.34 (2016: € 1.58)
All figures are based on International Financial Reporting Standards (IFRS).
In 2017, Raiffeisen Bank International AG (RBI) generated a consolidated profit of € 1,116 million.
“We are very satisfied with the past financial year. We have achieved one of the best results in our company's history and at the same time successfully completed important projects such as the merger with RZB,” said Johann Strobl, CEO of RBI.
Therefore, it will be proposed that the Annual General Meeting approve a dividend of € 0.62 per share. This would correspond to a maximum dividend payout of € 204 million and a payout ratio of 18 per cent.
“We are pleased to be able to pay dividends again and propose a dividend of 62 cents per share for 2017. We aim to achieve a payout ratio of between 20 and 50 per cent,” Strobl said.
Net interest income remained largely stable, with a slight increase of € 11 million to € 3,208 million. A rise in net interest income in Russia (up € 84 million), primarily attributable to currency effects and margins, was offset by a decline in interest income in other markets as a result of the continuing low level of interest rates.
Despite effects from currency appreciation, the Group’s general administrative expenses fell 1 per cent year-on-year, or € 37 million, to € 3,104 million. In particular, the average exchange rate of the Russian rouble appreciated 12 per cent year-on-year. The cost/income ratio improved 2.1 percentage points to 59.4 per cent also due to higher operating income.
Net provisioning for impairment losses significantly down
Net provisioning for impairment losses declined 62 per cent overall year-on-year, or € 471 million, to € 287 million.
The NPL ratio declined 3.0 percentage points year-on-year to 5.7 per cent.
Based on total risk, the common equity tier 1 ratio (transitional) was 12.9 per cent, with a total capital ratio (transitional) of 17.9 per cent. Excluding the transitional provisions as defined in the CRR, the common equity tier 1 ratio (fully loaded) stood at 12.7 per cent and the total capital ratio (fully loaded) was 17.8 per cent.
Comparison of results with the previous quarter
Compared to the third quarter of 2017, net interest income rose 2 per cent, or € 13 million, to € 816 million in the fourth quarter.
At € 813 million, general administrative expenses in the fourth quarter were up 13 per cent, or € 95 million, from € 718 million in the previous quarter.
Compared to the third quarter, net provisioning for impairment losses was up € 43 million to € 127 million. This was mainly attributable to an increase in individual loan loss provisions due to one large individual case in the corporate customer business at RBI AG.
The consolidated profit in the fourth quarter was € 206 million, which is a decrease of € 116 million compared to the third quarter 2017.
“We have a lot of plans for this year, too. We want to grow in selected countries and continue RBI‘s digital transformation. Last year, we launched Elevator Lab, the largest Fintech Accelerator program in CEE. In May, we will start the second round,“ Strobl said.
RBI will pursue loan growth with an average yearly percentage increase in the mid-single digit area.
Following very low risk costs in 2017 (€ 287 million), the bank expects impairment losses on financial assets in 2018 to be above the 2017 level.
RBI anticipates that the NPL ratio will further reduce in the medium term.
The bank aims to achieve a cost/income ratio of below 55 per cent in the medium term.
RBI targets a consolidated return on equity of approximately 11 per cent in the medium term.
The bank targets a CET1 ratio (fully loaded) of around 13 per cent post dividend in the medium term.
Based on this target, RBI intends to distribute between 20 and 50 per cent (dividend payout ratio) of the consolidated profit.
The targets in this outlook include the impact from IFRS 9 and FINREP.