Raiffeisen International Bank-Holding AG (Raiffeisen International) has reported very good results for the first half year 2005. Profit before tax came to € 273.3 million, representing an increase of 58 per cent or € 100.5 million compared to the same reporting period 2004. Profit after tax amounted to € 221.1 million (64.3 per cent or € 86.6 million more than in the first semester 2004). All figures according to International Financial Reporting Standards (IFRS).
The press release contains information about the consolidated profit for the second quarter, which is also on the upswing, slightly surpassing the first quarter (€ 92.8 million) to € 93 million. Compared to the same quarter of the previous year this reflects an increase of 79 per cent (Q2 2004: € 51.9 million). The consolidated profit for the first half year 2005 surged by 91.9 per cent to € 185.8 million (HY 04: € 96.8 million)
Herbert Stepic, CEO of Raiffeisen International, commented on the results: „The half-year figures are a seamless continuation to the successful year 2004 and the first quarter 2005. We have improved our results in all business segments with growing customer numbers and higher volumes, building a solid foundation for positive future development.”
Total Assets grew by 13.7 per cent to € 32.9 billion
Compared to the year-end 2004 total assets grew by 13.7 per cent to € 32.9 billion. Loans and advances to customers increased by 17.6 per cent to € 19.1 billion, which is primarily accounted for by the steep growth in the retail business segment. Loans and advances to banks grew by 20.8 per cent to € 5.8 billion.
Deposits from customers surged by 12.5 per cent to € 20.4 billion. At the same time deposits from banks grew by 11.2 per cent to € 7.4 billion.
Significant increase in Operating Income
Operating income increased rapidly during the first half of 2005, growing by 42.3 per cent or € 249.3 million to € 838.3 million. The fastest-growing item was the Net interest income, which rose by 50 per cent from € 358.1 million to € 535.7 million. It thus grew slightly faster than the total assets on annual comparison, which is primarily caused by an improvement in the interest margin by 26 basis points to 3.48 per cent.
With 29.1 per cent the increase in the Provisioning for impairment losses (by € 14.3 million to € 63.4 million; almost exclusively in the retail customers segment) was considerably lower than the increase in Net interest income. This results in an improvement of the Risk/Earnings ratio to 11.8 per cent.
General administrative expenses rose by 36.8 per cent or € 135.4 million – slower than the Operating income – to € 502.6 million. Consequently the Cost/income ratio improved from 63.5 per cent (for the full year 2004) to 59.9 per cent.
With € 355.8 million the Operating result was 51.4 per cent higher compared to the same period last year.
91 per cent profit surge in Southeastern Europe segment
According to the geographical segmentation the main growth driver in comparison to the previous year was the Southeastern Europe segment. The profit before tax surged by 90.9 per cent or € 42.1 million to € 88.1 million. The segment of the CIS-countries improved its results by 76.3 per cent or € 27.1 million to € 62.4 million, while the Central Europe segment generated a pre-tax profit of € 122.7 million, which is 34.5 per cent or € 31.3 million more than in the first six months of 2004. Compared to last year the pre-tax profit allocation is becoming more and more even across the geographical segments: Central Europe 45 per cent (2004: 53 per cent), Southeastern Europe 32 per cent (27 per cent) and CIS-countries 23 per cent (20 per cent).
5.7 Million Customers
Looking at individual customer segments, Retail Customers showed an extraordinary development. Profit before tax grew by € 34.0 million or 143 per cent to € 57.8 million. The Retail Customer segment accounted already for 21 per cent of the group’s profits. The Corporate Customer segment generated a pre-tax Profit of 155.6 million (plus 22 per cent or € 27.8 million). The Treasury segment contributed € 86.4 million (plus 156 per cent or € 52.7 million). Although the Corporate Customers segment exhibited the slowest growth of all three operational segments in absolute and relative terms, it still accounted for the biggest slice of overall profit, namely 57 per cent.
Martin Grüll, CFO of Raiffeisen International, values the rapid expansion of the retail customers segment as a crucial factor for long-term success: “We focus on the business with private individuals and SME´s. The success of our strategy is underscored by the rapid growth in our customer base. In the second quarter alone we have acquired more than 350,000 new clients, building a superb basis for our sustainable future earnings growth.” Including corporate clients 5.7 million customers were serviced at the end of June 2005, which is more than 1.3 million more than at the same time last year.
Improved equity base
The equity shown on Raiffeisen International’s balance sheet increased by 36 per cent or € 781 million to € 2,957 million. Apart from the proceeds from the IPO, which amounted to € 555 million after issuing costs, the change was largely due to three factors: Current profit for the period contributed € 221 million. Secondly, dividend payments to the shareholders of Raiffeisen International diminished equity by € 60 million. Finally, movements in the exchange rates of CEE currencies increased equity by € 42 million (net of the capital hedge result).
Regulatory own funds increased by € 626 million from € 2,360 million to € 2,986 million. The regulatory own funds requirement increased by € 295 million to € 1,866 million. These changes increased excess own funds position by € 331 million to € 1,120 million. The own funds ratio was 12.8 per cent after 12.0 per cent at year-end 2004. Hence, the core capital ratio (tier-1) also rose significantly after the IPO by 0.8 percentage points to 10.9 per cent.
Rapid expansion of business outlet network
The expansion of local business outlets continues at high pace. With 55 new business outlets since the end of 2004 the total number of business outlets increased to 971 by the end of June 2005. Hence, the number of staff also increased by 7.7 per cent from 22,851 to 24,616.
General information on Raiffeisen International
Raiffeisen International is the steering unit for the subsidiaries of Raiffeisen Zentralbank Österreich AG (RZB) in Central and Eastern Europe (CEE). Its shares are traded on the Vienna Stock Exchange. RZB owns 70 per cent. The balance is free-float, including shareholdings of the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) of about three per cent each. Raiffeisen International operates the leading banking network in CEE with Network Banks and leasing companies in 16 markets. More than 5.7 million customers are served through more than 970 business outlets.
