RBI net income falls by 35% to €804mn in 2020

RBI net income falls by 35% to €804mn in 2020
The bank’s CET1 ratio rose 0.5 percentage points q/q to 13.6%.
By bne IntelliNews February 5, 2021

Raiffeisen Bank International (RBI), the second largest Austrian lender by assets, made a preliminary consolidated profit of €804mn in 2020, down 35% year-on-year, as the COVID-19 pandemic hit income and pushed the bank to raise provisioning, the bank announced on February 5.

The results were also affected by weaker local currencies and continuing low interest rates across most of the CEE region where RBI operates. Net profit in the fourth quarter was €205mn.

Loans to customers were down 0.6%, mainly due to currency effects, at  €90.67bn, while assets rose 9% to €166bn.

The bank’s CET1 ratio rose 0.5 percentage points quarter-on-quarter to 13.6% after dividends.

Provisioning for impairment losses on financial assets soared 169% to €630mn, an annualised ratio of 0.68%, up 0.42pp, but this was mostly for general provisioning for the macro-economic environment. In fact there was a slight improvement in the non-performing exposures (NPE) ratio, down 0.2pp to 1.9%, with the NPE coverage ratio up 0.5pp to 61.5%.  

Net interest income fell 5% to €3.24bn as net interest margins compressed to 1.97% in Q4, down 0.3pp q/q. Net fee income fell 3.3% to €1.74 bn.

General administrative expenses were down 5% y/y at €2.95bn but the overall cost-income ratio remained high at 63.7% in Q4, up 9.6pp q/q.

The bank’s return on equity was 6.6%, down 0.9pp in Q4. The bank’s board has recommended a dividend of €0.48 per share for 2020.