Raiffeisen: no Russian exit, Hungarian bank absolutely stable
Yesterday, it was suggested that Raiffeisen was considering leaving the Russian market, which was later denied by the bank. What is the situation with this?
The share price of Raiffeisen Bank International (RBI), the dominant banking group in most countries of Eastern Europe, including Russia and Ukraine, was also affected by the war. At the same time, RBI CEO Johann Strobl confirmed at an international press conference last night that there are no plans to withdraw from Russia, and in fact there are no plans to withdraw from Russia at all.
He also considers it unthinkable that Russian Raiffeisen will make a loss at all
owing to a strong retail market position and outstanding innovation. We have significant capital reserves and in 2021 we closed a strongly profitable year, in Russia, in Hungary and on the rest of the markets in the banking group. The operations of all Raiffeisen units, including the one in Hungary, are absolutely stable. So there is no question of a Russian exit, these were false reports.
Does the same apply to Ukraine?
In Ukraine, branches are open depending on local conditions, and colleagues there are doing their best to provide basic banking services. ATMs are up and running, card acceptance is working and cash is being supplied as much as possible.
How are Hungarian customers affected by the conflict?
Fortunately not at all! We have a very secure ownership background, Raiffeisen Bank in Hungary continues to operate as usual with a full range of services, and will continue to do so in the future. New customers are coming in all the time, fresh funds are coming in. We do not expect any change in the liquidity of the bank, quite the contrary.
On the retail side, the medium-term trend is absolutely growth. We have been the fastest growing bank in recent years, both on the deposit side (10% average growth) and on the loan side (20% average growth). On the corporate side, we have also grown close to 10% on average over several years, and we continue to be a pioneer in some key areas such as export finance, structured finance, treasury services and the provision of subsidised programmes.
Of course, we are also monitoring events, but there is no cause for concern.
Could the operation of the Hungarian bank be affected if the Russian-Ukrainian situation deteriorates further?
Certainly not as far as the stability of the bank is concerned. It should be noted that there are two types of funding in European banking groups: one where the parent bank provides capital to the subsidiary banks, and the other where each subsidiary bank must be self-financing. The Raiffeisen Banking Group, in agreement with the European Central Bank, has been following the latter model for years. In practice, this means that
both the Ukrainian and Russian banks are fully self-financing, with neither subsidiary bank having cross-border funding or capital requirements.
As a result, the Hungarian Raiffeisen Bank's operations are protected from the developments in the Russian-Ukrainian conflict.
