Raiffeisen posts record profit, opens door to extraordinary dividend
Raiffeisen has set a new record profit, albeit only by a hair, in the third quarter of 2021, reporting a consolidated after-tax profit of EUR 443 million, beating the market's call substantially. RBI's profit in January-September jumped 76% in annual terms to EUR 1,055 billion, which includes the impact from taking over Czechia's Equa Bank. RBI's common equity tier 1 ratio (CET1) stood at 13.2% at the end of September.
The way key income items turned out suggests that business activity improved and the interest rate environment normalised to some extent. Net interest income rose 14% yr/yr and net fee and commission income leaped 24% over Q3 2020. Their growth over the second quarter reached 9% and 8%, respectively. The bank's cost-to-income ratio was 57.1%, which also shows the effect of the costs of integrating Equa Bank.
The great quarterly profit also stems from the fact that while operating expenses rose EUR 73 million (11%), RBI "saved" more than that, EUR 143 million, on risk costs as the operating environment turned more favourable. Unlike Erste, however, there was no provision reversal at Raiffeisen that incurred a loss of EUR 42 million on this row. The NPE (non-performing exposure) ratio decreased 0.2 percentage points to 1.6% as a result of an increase in deposits at central banks and higher lending volumes. The NPE coverage ratio rose 0.7 percentage points to 62.2%.
Taking into account the consolidation of Equa Bank, RBI's total assets increased by 16% yr/yr, while deposits grew by 15% and loans went up 10% over Q3 2020. The Hungarian operation posted a profit of EUR 41 million in Q3 and EUR 77 mn in Jan-Sept. The latter translates into a rather favourable return on equity (ROE) of 15.0%. The Russian operation reported EUR 135 mn and EUR 344 mn profit for Q3 and Q1-Q3, respectively.
""We are very satisfied with the performance in the first nine months. We have significantly improved our consolidated profit compared to the prior-year period and successfully completed the acquisition of Czech Equa bank. The economic upturn in our markets gives us a tailwind, so we are optimistic about both the rest of the year and 2022," said Johann Strobl, CEO of RBI.
The bank said that following the ECB’s decision not to extend its recommendation to limit dividend payments, the Management Board of RBI called an Extraordinary General Meeting to be held on 10 November 2021
to propose the payment of an additional dividend of € 0.75 per share for the financial year 2020.
Cover photo: Getty Images
