Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Austria's RBI gets indications of interest for Russia business

Published 05/04/2022, 10:54 AM
Updated 05/04/2022, 10:56 AM
© Reuters. The logo of Raiffeisen Bank International is seen on their headquarters in Vienna, Austria, March 1, 2022.  REUTERS/Leonhard Foeger

By Alexandra Schwarz-Goerlich and Tom Sims

VIENNA (Reuters) - Austria's Raiffeisen Bank International, one of the European banks most exposed to Russia, has received unsolicited indications of interest for its Russia operations, the bank's chief said on Wednesday.

RBI has been studying strategic options for the business, including a possible withdrawal from Russia, following Russia's invasion of Ukraine.

The lender has operated in Russia since the collapse of the Soviet Union 30 years ago. Its business there, Russia's 10th largest bank by assets, contributed almost a third to the group's net profit last year.

"We've been approached," Chief Executive Johann Strobl told analysts. He said in the coming weeks the bank would try to assess the interest of those parties, which he didn't name.

Strobl said options include a full or partial sale of the business or spin-off. He said a decision may take time.

"We want to get an understanding as quickly as possible what options we have," he said.

On Wednesday, the bank said that its first-quarter profit had doubled but it was revising its outlook due to lower loan growth and higher risk assumptions.

The better-than-expected profit was helped by a rise in fees and commissions due to increased customer activity by its foreign-exchange business in Russia, though risk provisions wiped out many of those gains.

Moreover, loan growth in the country has "largely been stopped".

Consolidated profit in the quarter was 442 million euros ($464.59 million). That was up from 216 million euros a year earlier and exceeded the 165 million euros expected by analysts.

Quarterly results were hurt by 319 million euros in impairments, almost entirely for business in Russia, Ukraine and Belarus.

The bank expects "stable" lending activity in 2022, compared with previous expectations of growth in the range of 7% to 9%.

It also expects a provisioning ratio of as much as 100 basis points, compared with previous expectations of 40 basis points.

© Reuters. The logo of Raiffeisen Bank International is seen on their headquarters in Vienna, Austria, March 1, 2022.  REUTERS/Leonhard Foeger

The bank's shares are down 47% since Russia's invasion of Ukraine on Feb 24 that Russia describes as a "special military operation".

($1 = 0.9514 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.