Raiffeisen Bank International Ag · VIE:RBI
Raiffeisen Bank International — FY2017 Earnings Presentation
53 slides from Raiffeisen Bank International's earnings presentation, Mar 14, 2018
Slide 1: Raiffeisen Bank International FY 2017 Results
Raiffeisen Bank International FY 2017 Results Group Investor Relations 14 March 2018
Slide 2: Disclaimer
Disclaimer Certain statements contained herein may be statements of future expectations and other forward-looking statements about Raiffeisen Bank International AG (“RBI”) and its affiliates, which are based on management's current views and assumptions and involve known and unknown risks and uncert
Slide 3: Table of Contents
Table of Contents Executive Summary . . . . . . . . . . . . . . . . . 3 Financials . . . . . . . . . . . . . . . . . . . . . . . 12 Risk Management . . . . . . . . . . . . . . . . . . 22 Appendix . . . . . . . . . . . . . . . . . . . . . . . 26 Group Investor Relations 14 March 2018 3
Slide 4: Executive Summary FY 2017
Executive Summary FY 2017 Consolidated profit more than doubled to EUR 1.1 bn (FY/2016: EUR 520 mn) CET1 ratio at 12.7% (fully loaded); IFRS 9 estimated impact around 15 bps on 1 January 2018 NPL ratio actively managed down to 5.7% (FY/2016: 8.7%) through NPL sales and write-offs Exceptionally low r
Slide 5: Financial Highlights FY 2017
Financial Highlights FY 2017 In EUR mn FY/2017 FY/2016 y-o-y Net interest income 3,208 3,197 0.3% Net fee and commission income 1,719 1,599 7.5% Net trading income 244 220 11.3% Operating income 5,228 5,112 2.3% Profitability General administrative expenses (3,104) (3,141) (1.2)% Net provisioning fo
Slide 6: Development of Financial Ratios in FY 2017
Development of Financial Ratios in FY 2017 RoE (Consolidated)1 Cost/Income Ratio 62.8% 16.2% 61.5% 14.0% 60.7% 12.2% 59.4% 58.4% 9.6% 8.9% 55.6% 6.2% FY/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017 FY/2017 FY/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017 FY/2017 Net Interest Margin1 Provisioning Ratio1 0.93% 2.48% 2
Slide 7: Growth across the Group
Growth across the Group FY 2017 Loans1 Projected Loan Growth2 Projected Loan Growth2 FY 2017 Loans1 Albania Kosovo EUR 777 mn EUR 577 mn Belarus Poland EUR 1,002 mn EUR 8,209 mn Bosnia & Herzegovina Romania EUR 1,248 mn EUR 5,013 mn Bulgaria Russia EUR 2,350 mn EUR 8,146 mn Croatia Serbia EUR 2,636
Slide 8: Update on Poland
Update on Poland Ongoing recovery of net interest margin in 1-12/2017 (1-12/2017: 2.31% vs. 1-12/2016: 1.94%) mostly due to repricing of retail deposits and reduction of excess liquidity Increased risk weighting of FX mortgages in December 2017 with 54 bps impact on Group CET1 ratio, fully recognize
Slide 9: Leveraging our Strong Position in Russia
Leveraging our Strong Position in Russia Key Developments Strategy Net interest margin increased to 5.88% in 1-12/2017 (from 5.64% in We will look to grow across all business segments while maintaining 1-12/2016) positively influenced by deposit repricing and increase of our prudent risk approach sh
Slide 10: Macro Outlook
Macro Outlook Development of Real GDP (%) General Market Trends Country 2016 2017e 2018f 2019f 2017 has seen the strongest growth in Central Europe (CE) CE Czech Republic 2.5 4.5 3.3 3.2 and Southeastern Europe (SEE) since before the financial Hungary 2.2 4.0 3.8 3.2 crisis. Regional economies are b
Slide 11: Outlook and Targets
Outlook and Targets We will pursue loan growth with an average yearly percentage increase in the mid-single digit area Following very low risk costs in 2017 (EUR 287 mn), we expect impairment losses on financial assets in 2018 to be above the 2017 level We anticipate that the NPL ratio will further
Slide 12: Table of Contents
Table of Contents Executive Summary . . . . . . . . . . . . . . . . . 3 Financials . . . . . . . . . . . . . . . . . . . . . . . 12 Risk Management . . . . . . . . . . . . . . . . . . 22 Appendix . . . . . . . . . . . . . . . . . . . . . . . 26 Group Investor Relations 14 March 2018 12
Slide 13: Overview of Key Financials
Overview of Key Financials In EUR mn Q4/2017 Q3/2017 q-o-q FY/2017 FY/2016 y-o-y Development (q-o-q) Net interest income 816 803 1.6% 3,208 3,197 0.3% Net interest income up EUR 13 mn mostly due to Net fee & commission income 448 429 4.4% 1,719 1,599 7.5% volume-driven interest income from customer
Slide 14: Distribution of Profit before Tax – FY 2017
Distribution of Profit before Tax – FY 2017 In EUR mn 257 (451) 872 1,612 404 530 Central Europe Southeastern Eastern Europe Group Corporate Center RBI Group Europe Corporates & Markets & Reconciliation1 Czech Republic Albania Belarus Corporates Vienna Group Treasury Hungary Bosnia & Russia Markets
Slide 15: Revenue Composition
Revenue Composition Split of Operating Income Development (q-o-q) In EUR mn Net interest income up EUR 13 mn mostly due to 1,374 1,339 19 1,298 1,300 6 1,291 9 13 volume-driven interest income from customer 28 79 64 69 50 62 loans (up EUR 9 mn) and EUR 4 mn higher current 419 433 429 448 income from
Slide 16: Expense Base Breakdown
Expense Base Breakdown Development of General Administrative Expenses Development (q-o-q) In EUR mn General administrative expenses up EUR 95 mn 847 815 813 758 718 driven by higher staff expenses and higher other 120 76 90 81 administrative expenses 81 324 350 286 314 272 Staff expenses up EUR 43 m
Slide 17: Balance Sheet Overview
Balance Sheet Overview Balance Sheet (31/12/2017) In EUR mn 31/12/2017 30/09/2017 q-o-q 31/12/2017 31/12/2016 y-o-y 11% Total assets 135,146 139,963 (3.4)% 135,146 134,804 0.3% EUR 135 bn 15% 5% 17% 4% Loans and advances 14,358 16,711 (14.1)% 14,358 10,981 30.8% to banks 63% 58% Loans and advances t
Slide 18: Equity Overview
Equity Overview Subscribed Capital Retained Consolidated Consolidated equity Non-controlling Total In EUR mn capital reserves earnings profit/loss (incl. TCI1) interests AT1 capital Equity Equity as at 31/12/2016 892 4,994 2,301 463 8,651 581 0 9,232 RZB/RBI merger 110 0 336 0 445 74 0 519 Equity as
Slide 19: Regulatory Capital Overview
Regulatory Capital Overview Regulatory Capital Structure Changes in Regulatory Capital (YTD) In EUR mn 31/12/2017 31/12/2016 Common equity tier 1 ratio (fully loaded) of 12.7% (up 0.3PP) and transitional of 12.9% (up 0.2PP); common equity tier 1 Common equity tier 1 (before deductions) 9,955 9,293 c
Slide 20: Capital Ratios well above Requirements
Capital Ratios well above Requirements Regulatory Capital Requirements Further Details (RBI Group) 2018 SREP P2R of 2.25%, and P2G of 1.0% (unchanged RBI Group from 2017) 17.9% Combined buffer requirement in 2018 of 2.96%: RBI Group RBI Group 13.7% − 1.875% capital conservation buffer 12.9% − 1.0% s
Slide 21: Funding Overview
Funding Overview Funding Structure (31/12/2017) NSFR1 and Loan/Deposit Ratio2 Subordinated Medium- and liabilities 112% 111% 112% 113% long-term 3% 110% refinancing 11% 91% 92% 92% 91% 90% Short-term Customer refinancing deposits 13% 73% Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Total: EUR 117 bn Loan
Slide 22: Table of Contents
Table of Contents Executive Summary . . . . . . . . . . . . . . . . . 3 Financials . . . . . . . . . . . . . . . . . . . . . . . 12 Risk Management . . . . . . . . . . . . . . . . . . 22 Appendix . . . . . . . . . . . . . . . . . . . . . . . 26 Group Investor Relations 14 March 2018 22
Slide 23: RWA and Credit Portfolio Development
RWA and Credit Portfolio Development RWA and Credit Portfolio Development Comments (q-o-q) In EUR mn RWA q-o-q YTD Total Exposure q-o-q YTD Credit risk RWA increased by EUR 3,266 mn 31/12/2017 31/12/2017 − Non-retail: RWA increased by EUR 568 mn Czech Republic 6,521 1.3% 11.2% 19,789 (1.0%) 10.9% pr
Slide 24: NPL and Provisioning Ratio Development
NPL and Provisioning Ratio Development NPL as % of Customer Loans and NPL Coverage Ratio Comments Strong improvement in risk costs and NPL ratio due to NPL sales, recoveries and write-offs 75.2% 74.0% 70.5% NPL ratio down by 3.0PP to 5.7% YTD; largest decrease in Eastern 69.4% 67.0% Europe by 8.3PP
Slide 25: NPL Distribution by Country
NPL Distribution by Country NPL Ratio and Coverage Ratio Comments (YTD) In EUR mn NPL NPL NPL NPL NPL of EUR 4,611 mn down EUR 2,299 mn; NPL sales of Stock Ratio Ratio Coverage Ratio 31/12/2017 31/12/2017 31/12/2016 31/12/2017 EUR 1,010 mn and write-offs of EUR 1,635 mn Czech Republic 276 2.6% 4.0%
Slide 26: Table of Contents
Table of Contents Executive Summary . . . . . . . . . . . . . . . . . 3 Financials . . . . . . . . . . . . . . . . . . . . . . . 12 Risk Management . . . . . . . . . . . . . . . . . . 22 Appendix . . . . . . . . . . . . . . . . . . . . . . . 26 Group Investor Relations 14 March 2018 26
Slide 27: Geographic Footprint
Geographic Footprint Czech Republic, #5 Austria, #3 Central Europe (CE) Eastern Europe (EE) Loans: EUR 10.5 bn Loans: EUR 28.0 bn Southeastern Europe (SEE) Branches: 132 Branches: 19 Leading regional player with Hungary, #6 Russia, #11 CEE presence of over 30 years Loans: EUR 3.1 bn Loans: EUR 8.1 b
Slide 28: Country and Segment Overview
Country and Segment Overview FY/2017 Total Assets Share of Total Assets2 Loan/deposit Net Interest Provisioning Ratio NPL Ratio NPL Coverage Ratio (EUR mn) Ratio Margin Czech Republic 16,125 11.9% 83.3% 1.83% 0.14% 2.6% 86.6% Hungary 7,040 5.2% 58.2% 2.01% (1.71)% 8.1% 68.2% Poland 11,724 8.7% 94.0%
Slide 29: RBI Group
RBI Group In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 816 803 1.6% 792 796 858 3,208 3,197 0.3% Net fee and commission income 448 429 4.4% 433 409 419 1,719 1,599 7.5% Net trading income 62 50 23.6% 69 64 79 244 220 11.3% Recurring other net oper
Slide 30: Country Financials (CE) – Czech Republic
Country Financials (CE) – Czech Republic In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 79 71 11.7% 67 69 63 287 247 16.1% Net fee and commission income 36 30 20.4% 32 33 28 132 111 19.3% Net trading income 5 6 (8.9)% 12 5 5 28 8 257.7% Recurring ot
Slide 31: Country Financials (CE) – Hungary
Country Financials (CE) – Hungary In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 31 33 (7.2)% 33 34 29 131 107 22.9% Net fee and commission income 34 32 5.0% 33 31 33 130 122 6.9% Net trading income 1 5 (88.0)% 4 6 3 15 14 5.8% Recurring other net o
Slide 32: Country Financials (CE) – Poland
Country Financials (CE) – Poland In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 67 68 (1.6)% 68 62 60 266 233 14.1% Net fee and commission income 35 35 1.0% 35 33 34 138 135 2.1% Net trading income 1 3 (63.7)% (1) 1 (1) 3 7 (57.7)% Recurring other n
Slide 33: Country Financials (CE) – Slovakia
Country Financials (CE) – Slovakia In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 70 71 (0.7)% 67 69 67 277 275 0.7% Net fee and commission income 40 40 2.1% 38 39 39 157 151 4.0% Net trading income 4 3 6.3% 3 2 2 12 6 101.2% Recurring other net ope
Slide 34: Country Financials (SEE) – Albania
Country Financials (SEE) – Albania In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 13 13 0.4% 13 13 12 53 56 (4.4)% Net fee and commission income 4 4 (9.6)% 4 4 4 15 13 19.3% Net trading income (0) 1 – (3) 3 0 1 12 (90.6)% Recurring other net operati
Slide 35: Country Financials (SEE) – Bosnia & Herzegovina
Country Financials (SEE) – Bosnia & Herzegovina In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 17 17 (1.2)% 17 17 17 67 67 (0.4)% Net fee and commission income 10 10 (0.6)% 11 9 9 39 38 4.3% Net trading income 0 1 (21.9)% 0 0 0 2 2 2.3% Recurring ot
Slide 36: Country Financials (SEE) – Bulgaria
Country Financials (SEE) – Bulgaria In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 24 25 (4.8)% 29 26 27 104 112 (7.0)% Net fee and commission income 11 12 (3.0)% 11 10 11 45 42 7.2% Net trading income 1 1 21.9% 1 1 0 3 2 25.4% Recurring other net o
Slide 37: Country Financials (SEE) – Croatia
Country Financials (SEE) – Croatia In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 28 29 (4.7)% 31 31 31 119 126 (6.1)% Net fee and commission income 16 21 (25.8)% 18 16 16 71 66 7.5% Net trading income 1 1 9.3% 3 3 4 8 18 (52.6)% Recurring other net
Slide 38: Country Financials (SEE) – Kosovo
Country Financials (SEE) – Kosovo In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 10 10 (0.6)% 9 9 9 38 38 0.8% Net fee and commission income 3 4 (25.2)% 3 2 3 13 10 40.6% Net trading income (0) (0) (61.2)% 0 0 (0) (0) 1 – Recurring other net operati
Slide 39: Country Financials (SEE) – Romania
Country Financials (SEE) – Romania In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 71 65 9.0% 66 63 67 266 259 2.5% Net fee and commission income 49 43 11.7% 44 41 48 176 185 (4.6)% Net trading income (0) 2 – 4 4 4 10 17 (42.6)% Recurring other net o
Slide 40: Country Financials (SEE) – Serbia
Country Financials (SEE) – Serbia In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 21 21 0.9% 20 20 20 81 80 0.8% Net fee and commission income 11 11 3.9% 10 9 10 41 38 9.2% Net trading income 0 2 (75.9)% 1 1 1 5 3 70.4% Recurring other net operating
Slide 41: Country Financials (EE) – Belarus
Country Financials (EE) – Belarus In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 22 24 (11.4)% 29 31 32 106 128 (16.8)% Net fee and commission income 13 13 (2.8)% 13 13 13 52 51 1.5% Net trading income 1 1 (15.0)% 2 (1) 1 4 7 (39.3)% Recurring other
Slide 42: Country Financials (EE) – Russia
Country Financials (EE) – Russia In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 173 155 11.4% 162 161 151 651 567 14.9% Net fee and commission income 82 77 7.1% 82 75 77 317 259 22.4% Net trading income 20 12 64.9% 23 18 15 73 47 57.7% Recurring oth
Slide 43: Country Financials (EE) – Ukraine
Country Financials (EE) – Ukraine In EUR mn Q4/2017 Q3/2017 q-o-q Q2/2017 Q1/2017 Q4/2016 FY/2017 FY/2016 y-o-y Net interest income 47 47 0.0% 45 45 47 183 171 7.2% Net fee and commission income 24 25 (5.2)% 22 21 23 91 81 12.6% Net trading income (1) 1 – 6 5 1 11 11 1.1% Recurring other net operati
Slide 44: Bank levies and resolution fund
Bank levies and resolution fund Impact in EUR mn FY 20161 FY 2017 FY 2018e Bank levy based on total assets (excluding derivatives) and Austria including a one-off payment (spread over 4 years) of EUR 163 mn 85 572 ~56 from 2017 on Bank levy of 0.15% (for up to HUF 50 bn of total assets) and 0.21% Hu
Slide 45: Breakdown CHF Loan Exposures
Breakdown CHF Loan Exposures CHF Loan Exposures (31/12/2017, in EUR mn) CHF NPL Ratio & NPL Coverage Ratio (31/12/2017) 2,423 71.8% 58.7% 170 54.7% 49.6% 20.5% 48 11.1% 13.3% 28 2.7% Poland Romania Serbia Hungary Poland Romania Serbia Hungary NPL ratio NPL coverage ratio Poland, Romania, Serbia: CHF
Slide 46: NPL and NPE Distribution by Country
NPL and NPE Distribution by Country NPE NPE NPE Coverage NPE Coverage NPL NPL NPL Coverage NPL Coverage Ratio Ratio Ratio Ratio Ratio Ratio Ratio Ratio 31/12/2017 31/12/2016 31/12/2017 31/12/2016 31/12/2017 31/12/2016 31/12/2017 31/12/2016 Czech Republic 2.2% 5.0% 60.6% 45.1% 2.6% 4.0% 86.6% 70.1% H
Slide 47: Raiffeisen Banking Group Structure
Raiffeisen Banking Group Structure Raiffeisen Banking Group (RBG) – largest banking group in Austria Raiffeisen Banking Group (RBG) with total assets of EUR 286.0 bn as of 31/12/2017 Solid funding profile of RBG based on a domestic market share of ~1.7 mn1 members (mainly private individuals) around
Slide 48: The Institutional Protection Scheme (IPS)
The Institutional Protection Scheme (IPS) Legal Background IPS in Raiffeisen Austria IPS regulations are defined in the CRR Art. 113 (7); the IPS is subject to There are regional IPS in place. Members are the Raiffeisen banks and the regulatory supervision incl. regular reporting requirements region
Slide 49: Maturity Profile
Maturity Profile Maturity Profile at 31/12/2017 (in EUR mn) Group Investor Relations 14 March 2018 49
Slide 50: AT1 and Subordinated Instruments
AT1 and Subordinated Instruments Regulatory Capital Initial Reset Nominal Issuance First Call Issuer Treatment1 Recognition2 ISIN Coupon Coupon outstanding date Date Call period Maturity 5Y EUR Raiffeisen Bank Additional Tier 1 99.3% XS1756703275 4.500% MidSwap + EUR 500 mn 17 Jan 2018 25 Jun 2025 S
Slide 51: Available Distributable Items (ADI) to Cover Discretionary Distributions
Available Distributable Items (ADI) to Cover Discretionary Distributions Distributable Items Available Distributable Items (EUR mn) Discretionary coupon payments on AT1 capital are subject to sufficient distributable items1 1,530 Distributable items based on RBI AG's unconsolidated 1,400 accounts un
Slide 52: Shareholder Information Overview
Shareholder Information Overview General Information Shareholder Structure1 Listed since 25-04-05 on the Vienna Stock Exchange Prime Market Indices: ATX, ATX Prime, ATX five, MSCI Standard Index Europe, EURO STOXX Banks RBI free float 328,939,621 ordinary shares issued ~41.2% ISIN: AT0000606306 Trad
Slide 53: Contact and Financial Calendar
Contact and Financial Calendar Contact Details Financial Calendar Susanne E. Langer 15 March 2018 RBI Investor Presentation, London Head of Group Investor Relations 1 May 2018 Start of Quiet Period1 Spokesperson 15 May 2018 First Quarter Report, Conference Call Raiffeisen Bank International AG 11 Ju
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