Raiffeisen Bank International (RBI) made significantly less profit in 2023.
p>Raiffeisen Bank International (RBI) made significantly less profit in 2023. The bottom line was 2.39 billion euros, after 3.63 billion euros the year before. Excluding Russia and Belarus, the bank announced on Wednesday that there was a consolidated result of 997 million euros. In Russia, RBI wants to further reduce its exposure; the planned purchase of Oleg Deripaska’s STRABAG shares is already on track.
According to RBI, the deal could be completed as early as the first quarter of 2024. “The approval process for the STRABAG transaction is on track. We have submitted all necessary documents to the responsible authorities,” said bank boss Johann Strobl. The bank has already carried out its own checks and has come to the conclusion “that there is certainly no violation of sanctions here,” said Strobl. Whether the authorities see it that way is still unclear. According to Strobl, there has not yet been any official approval from the Oesterreichische Nationalbank (OeNB), which is responsible for compliance with the sanctions in Austria, or from the Kremlin.
Deripaska himself is affected by the Russia sanctions. In order for the purchase to be carried out at all, Deripaska must first transfer his share held through MKAO “Rasperia Trading Limited” (Rasperia) to the Russian joint stock company Iliadis JSC, as announced. Raiffeisen Russia then wants to acquire the STRABAG shares (27.8 percent) from Iliadis and transfer them to the RBI in Vienna in the form of a dividend in kind, according to the bank’s plan.
If the transaction goes through, RBI could significantly reduce its equity capital in Russia. The possible purchase price for Deripaska’s share package was 1.5 billion euros. At the end of 2023, Raiffeisen Russia’s equity amounted to 4.45 billion euros.
Aside from the planned STRABAG deal, RBI is still working on a sale or spin-off of Raiffeisen Russia. A sale or partial sale is still more likely than a spin-off. Strobl left it open as to when one of the scenarios could occur. “We are talking to everyone who is interested,” said the bank boss. Ultimately, the decisive factor for a sale is approval from the Kremlin.
In addition, RBI is continuing to scale back its daily operations in Russia. “Since the second quarter of 2022, the loan volume in Russia has been reduced by 56 percent. At the end of 2023 it was still 6 billion euros,” says the release of the figures. The payment transaction business was also withdrawn and all relationships with Russian correspondent banks except for the company’s own subsidiary were terminated.
With regard to the real estate market and Signa’s exposure, the bank’s board of directors was cautious. CFO Hannes Mösenbacher emphasized again that no information was provided about individual companies. However, the bank has taken good care of its real estate portfolio. There are reserves totaling 150 million euros for the entire portfolio. Mösenbacher had already mentioned the number at the general meeting in autumn 2023. At this point in time, the five largest real estate commitments were valued at a total of 2.2 billion euros, of which 755 million euros were the largest commitment. This sum has often been reported in media reports as the bank’s Signa exposure.
In the previous year, RBI’s total profit was burdened by, among other things, provisions for the ongoing Swiss franc loan litigation in Poland amounting to EUR 873 million. The number of lawsuits per month in Poland continues to rise significantly, said Mösenbacher. The jurisprudence is also one-sided, i.e. the customers’ contracts are simply canceled. If the influx of new lawsuits remains as high as it has been recently, further provisions running into the hundreds of millions could be necessary in the coming years.
The dispute, which has been going on for years, concerns thousands of Poles who, before the financial crisis, took out loan agreements in francs to finance their house due to low interest rates in Switzerland at the time. However, the Polish zloty subsequently lost massively in value against the franc, which placed a heavy burden on house builders. Many borrowers then sued their banks to get out of the expensive loans.
Despite the weaker profit, the board wants to offer shareholders a dividend of 1.25 euros per share. This is primarily due to the solid capital resources. The bank increased its common equity Tier 1 capital ratio from 16.0 percent to 17.3 percent. The general meeting is scheduled to take place on April 4th.
According to the figures presented, RBI shares lost 4.6 percent in the morning, and in the evening the loss on the Vienna Stock Exchange was 3.40 percent to 19.32 euros.
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