RAIFY Raiffeisen Bank International AG (PK)

   By Sarah Sloat 
 

Raiffeisen Bank International AG on Wednesday said that it now expects lower loan growth and higher risk provisions for the year, and that it continues to evaluate strategic options for its business in Russia, where it has largely suspended operations.

In the first quarter, the Austrian bank's net profit rose to 442 million euros ($465 million) from EUR216 million. Net interest income rose to EUR986 million from EUR736 million, it said.

Loans grew 1% in the first quarter, and new lending in Russia has largely been stopped. The bank said it now expects expect stable loan volumes in 2022, compared with previous guidance for growth of 7% to 9%.

Raiffeisen now expects its provisioning ratio for the year to be up to 100 basis points, compared with earlier guidance of about 40 basis points, as it assumes a higher cost of risk.

As a result of credit-rating downgrades in Russia, Ukraine and Belarus, the bank's common equity Tier 1 ratio slipped to 12.3% at the end of March, compared with 13.1% at the end of the previous quarter. For 2022, Raiffeisen said it expects its CET 1 ratio--a measure of capital strength--to recover close to its 13% target.

It also expects a consolidated return on equity of 8% to 10%. It had previously guided for the metric to be above 11% for the year.

Raiffeisen is one of the European banks with the most exposure to Russia. It made 33% of its pretax profit in Russia last year. Among the options for its Russian business is an orderly withdrawal, Raiffeisen said. As of earlier this year, it had a staff there of more than 9,000 serving 4.3 million customers, mostly individuals and small companies.

Write to Sarah Sloat at sarah.sloat@wsj.com

(END) Dow Jones Newswires

May 04, 2022 02:54 ET (06:54 GMT)

Raiffeisen Bank (PK) (USOTC:RAIFY)
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