Raiffeisen Bank International Ag · VIE:RBI
Raiffeisen Bank International — FY2019 Earnings Presentation
59 slides from Raiffeisen Bank International's earnings presentation, Mar 18, 2020
Slide 1: Raiffeisen Bank International FY 2019 Results
Raiffeisen Bank International FY 2019 Results – 18 March 2020
Slide 2: Disclaimer
Disclaimer Certain statements contained herein may be statements of future statements set forth herein, whether as a result of new information, not relevant persons. Any investment or investment activity to which expectations and other forward-looking statements about Raiffeisen future events or oth
Slide 3: Executive Summary
Executive Summary 01 02 03 04 Executive Financials Risk Management Appendix Summary JOHANN STROBL Group Investor Relations 18 March 2020 3
Slide 4: Executive Summary FY 2019
Executive Summary FY 2019 Operating Result (in EUR mn) Consolidated Profit (in EUR mn) 1-12/2019 2,382 1-12/2019 1,227 1-12/2018 2,330 1-12/2018 1,270 ▪ NII up 8% y-o-y excluding Poland1 ▪ Risk costs remain low; early recognition of updated default definition (EUR 74 mn impact) ▪ Net fee and commiss
Slide 5: Financial Performance FY 2019
Financial Performance FY 2019 Operating Income y-o-y Net Interest 1-12/2019 2.44% 2.44 EUR 5,475 mn 1.8% Margin Net Interest Income 1-12/2018 2.50% y-o-y EUR 3,412 mn 1.5% excl. Poland 7.7% Fee Income 1-12/2019 56.5% 2.44 y-o-y Cost/Income EUR 1,797 mn 0.3% Ratio 1-12/2018 56.7% excl. Poland 7.1% Ge
Slide 6: Strong Fundamentals in the face of Economic Uncertainty
Strong Fundamentals in the face of Economic Uncertainty CET1 Ratio STRONG CAPITAL AND HEALTHY BALANCE SHEET 13.9% + 1.2 PP since 2017 Comfortable CET1 Continued improvement 2.1% NPE ratio and ratio of 13.9% in portfolio quality 61.0% coverage ratio Coverage Ratio 61.0% 58.3% 56.1% FOCUSED ON COST CO
Slide 7: Four Levers for Tighter Cost Control Across the Group
Four Levers for Tighter Cost Control Across the Group I II III IV Target Operating Model Cost savings in the Efficiency gains from Optimization in Group IT review in Austria network digital investments governance ▪ Overhaul of processes and ▪ Firm cost targets for ▪ Consolidation of Group- ▪ Migrati
Slide 8: Macro Outlook
Macro Outlook Real GDP (% yoy) ▪ Given the unprecedented restrictive measures to contain the Country 2018 2019e 2020f 2021f spread of Covid-19, we anticipate a severe European recession of CE Czech Republic 2.9 2.4 -5.2 3.4 -4% in 2020, with a substantial output decline in H1. Quarterly GDP Hungary
Slide 9: Outlook and Targets
Outlook and Targets The likelihood of a severe recession in the Euro area (assumed -4% GDP in 2020) resulting from the measures taken to limit the spread of COVID-19 along with the negative repercussions for our markets (assumed up to -6% GDP in 2020) have led to changes to our outlook. The revised
Slide 10: Financials
Financials 01 02 03 04 Executive Financials Risk Management Appendix Summary Group Investor Relations 18 March 2020 10
Slide 11: Key Financials
Key Financials Change in consolidated profit Profitability (in EUR mn) Q4/2019 Q3/2019 q-o-q Q4/2018 (q-o-q) Net interest income 881 866 1.7% 843 Net fee and commission income 489 468 4.6% 467 214 (115) Operating income 1,642 1,327 23.7% 1,318 General administrative expenses (848) (748) 13.4% (819)
Slide 12: Operating Result
Operating Result In EUR mn Operating income ▪ Net interest income up EUR 15 mn, mainly due to higher volumes in Russia 200 1,642 21 78 ▪ NIM further stabilizing at 2.47% (up 1 bp q-o-q) 1,327 15 ▪ Net fee and commission income up EUR 21 mn 23.7% from higher volumes in payment services and vs. Q3/19
Slide 13: Central Europe Q4/2019
Central Europe Q4/2019 Q4/2019 29,603 ▪ Central Europe retail active customers Loans to up 5% in 2019 with mobile banking +1% Customers Q3/2019 29,284 penetration up 6% (EUR mn) 2.44 ▪ Q4/2019 risk costs reflect early 2.44 recognition of updated default Q4/2019 1.94% definition NIM (22) bps Q3/2019
Slide 14: Southeastern Europe Q4/2019
Southeastern Europe Q4/2019 Q4/2019 15,915 ▪ Southeastern Europe retail active Loans to customers up 7% in 2019 and number of +1% Customers Q3/2019 15,688 branches down 7% (EUR mn) 2.44 ▪ NIM down 8 bps in Q4 2.44 but slightly improved in FY/2019 to 3.63% Q4/2019 3.62% NIM (8) bps ▪ Romania FY/2019
Slide 15: Eastern Europe Q4/2019
Eastern Europe Q4/2019 Q4/2019 14,465 ▪ Strong loan growth in 2019, partly due to Loans to RUB and UAH appreciation Customers +4% (EUR mn) Q3/2019 13,882 ▪ NIM in Russia improved further in Q4 (up 2.44 24 bps), while Ukraine impacted by rate 2.44 cuts (down 42 bps) Q4/2019 5.95% NIM (2) bps ▪ Driven
Slide 16: Group Corporates & Markets Q4/2019
Group Corporates & Markets Q4/2019 Q4/2019 29,720 ▪ 10.3% loan growth in 2019 driven by high quality lending to corporates Loans to and project finance Customers (4%) (EUR mn) Q3/2019 30,829 ▪ NIM down 5 bps y-o-y to 1.23% for FY/2019, reflecting pressure on 2.44of new business margins and high qual
Slide 17: Capital Ratios well above Requirements
Capital Ratios well above Requirements Regulatory capital requirements 2019 Development (incl. Q4 results) RBI ▪ 2019 SREP P2R of 2.25%, and P2G of 1.0% (unchanged Regulatory from 2018), no changes expected for 2020 18.0% ▪ CBR composition: ▪ systemic risk buffer 2.00% 15.5% ▪ capital conservation b
Slide 18: CET 1 Ratio Development in 2019
CET 1 Ratio Development in 2019 YTD Q-o-Q +50bps +20bps CET1 development in 2019 ▪ Positive 9 bps impact from FX & Other effects ▪ Negative 58 bps impact in FY/2019 from RWA increase mainly due to credit risk (loan growth), while operational risk increased and market risk decreased ▪ 108 bps increas
Slide 19: Funding and Liquidity
Funding and Liquidity Overview of funding plan RBI Group Head office funding highlights 2019 ▪ 60% of Group funding from customer deposits. Inflows ▪ Tier 2 issuance and tender offer; remaining untendered amount remain strong with high stickiness despite low interest rates called at the first call d
Slide 20: Risk Management
Risk Management 01 02 03 04 Executive Financials Risk Management Appendix Summary HANNES MÖSENBACHER Group Investor Relations 18 March 2020 20
Slide 21: Total Exposure and Credit Portfolio Development
Total Exposure and Credit Portfolio Development Total exposure by segments, in EUR bn, FY/2019 RWA by category & segment, in EUR bn, ∆YTD Total: EUR 189.1 bn, +8.5% Total: EUR 78.0 bn, +7.3% GC&M +8.3% Market risk RWA 79.99 CE +4.1% Operational risk RWA 3.4 bn 7.8 bn 50.00 SEE +6.4% Retail RWA 31.86
Slide 22: Provisioning and Impairment
Provisioning and Impairment Provisioning & Impairment 2019 Developments FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Central Europe 0.41% 0.63% Q4/2019 risk costs of EUR 154 mn (FY/2019: EUR 234 mn) 0.09% (0.54%) 0.16% 0.13% driven by non-retail (EUR 104 mn) in GC&M and Russia as well 39 as updat
Slide 23: NPE Ratio and NPE Coverage
NPE Ratio and NPE Coverage NPE Ratio and NPE Coverage Ratio Asset Quality Developments YTD Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 NPE Stock Central Europe 56.0% 57.2% 57.2% 59.1% 58.6% in EUR mn ▪ NPE ratio down 52 bps to 2.1% driven by writebacks and Q4/2019 recoveries (EUR 1,053 mn), write-offs (
Slide 24: Appendix
Appendix 01 02 03 04 Executive Financials Risk Management Appendix Summary Group Investor Relations 18 March 2020 24
Slide 25: Geographic Footprint
Geographic Footprint Central Europe (CE) ▪ Leading regional player with Russia, #8 Southeastern Europe (SEE) CEE presence of over 30 ◼ Loans: EUR 11.3 bn Eastern Europe (EE) ◼ Branches: 154 years servicing approx. 16.7 million customers Austria, #3 Ukraine, #4 ◼ Loans: EUR 33.8 bn ◼ Loans: EUR 1.8 b
Slide 26: Raiffeisen Banking Group Structure
Raiffeisen Banking Group Structure ▪ Raiffeisen Banking Group (RBG) – largest banking group in Austria with total assets of EUR 320 bn as of 31/12/2019 ▪ Solid funding profile of RBG based on a domestic market share of around 33% of total customer deposits, not least due to superior brand recognitio
Slide 27: Total Exposure by Country and Segment
Total Exposure by Country and Segment EUR 189 bn total exposure and EUR 78 bn RWA Total exposure by segments, FY/2019 Total exposure by business lines in EUR bn, ∆ YTD GC&M +8.3% 79.99 CE +4.1% Retail (22%) 50.00 Sovereigns Mortgage Loans 19% 13% Consumer Loans SEE +6.4% 5% 31.86 FI EE +21.2% FI & O
Slide 28: FY/2019 Group Corporates and Markets (GC&M)
FY/2019 Group Corporates and Markets (GC&M) Austria & Western Europe make up ~ 85% of GC&M net exposure1… … and 84% of GC&M net exposure in Corporates 48.0% 43.5% Net Exposure Share Net Exposure Share 37.5% 37.5% Credit RWA Share Credit RWA Share 51.9% 49.1% 35.0% 31.2% 6.6% 7.3% 5.0% 6.1% 3.4% 3.1%
Slide 29: Committed to Sustainable Finance
Committed to Sustainable Finance Two green bonds issued Certifications ▪ Green loan portfolio with total volume of eligible assets: EUR “C+” Prime status in sustainability rating by 1,370 mn as of 31/12/2019 ISS-oekom research (June 2019) ▪ The reference portfolio includes 84% of green buildings, ev
Slide 30: Leveraging our Strong Position in Russia
Leveraging our Strong Position in Russia Key developments in Q4 2019 Loans to customers by sector Retail lending by product ▪ EUR 114 mn profit after tax, slightly decreased (down EUR 16 mn Other Energy Other 10% 8% q-o-q) 6% Industrials Personal and 6% Credit Cards other ▪ Loans to customers up 3.8
Slide 31: Corporate Center/Reconciliation
Corporate Center/Reconciliation In EUR mn 1-12/2019 1-12/2018 y-o-y In EUR mn 1-12/2019 1-12/2018 y-o-y Operating income 834 747 11.5% Operat ing income (894) (827) 8.2% General admin. expenses (353) (344) 2.6% General admin. expenses 131 127 3.2% Operating result 481 404 19.1% Operat ing result (76
Slide 32: Equity Overview
Equity Overview Cumulative other Subscribed Capital Retained comprehensive Consolidated Non-controlling Additional Total In EUR mn capital reserves earnings income equity interests tier 1 Equity Equity as at 31/12/2018 1,002 4,992 7,587 (2,994) 10,587 701 1,125 12,413 Impact of implementation IFRS 1
Slide 33: Regulatory Capital Overview
Regulatory Capital Overview Regulatory Capital Structure In EUR mn 31/12/2019 31/12/20181 30/9/2019 Common equity tier 1 (before deductions) 11,659 10,436 11,199 Deduction items (797) (734) (791) Common equity tier 1 (after deductions) 10,862 9,702 10,408 Additional tier 1 (after deductions) 1,230 1
Slide 34: Maturity Profile
Maturity Profile Maturity Profile at 31/12/2019 1,899 (in EUR mn) 500 1,531 1,534 152 1,265 1,251 546 1,184 922 1,379 1,399 504 622 1,150 1,265 482 509 988 201 417 281 96 57 9 96 5 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 >2035 Senior placements Subordinated Additional Tier 1 Group Inv
Slide 35: AT1 and Subordinated Instruments
AT1 and Subordinated Instruments Regulatory Capital Initial Reset Nominal Issuance Issuer ISIN First Call Date Call period Maturity Treatment1 Recognition2 Coupon Coupon outstanding date 5Y EUR Raiffeisen Bank Additional Tier 1 99.5% XS1756703275 4.500% MidSwap + EUR 500 mn 17 Jan 2018 25 Jun 2025 S
Slide 36: 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 7,180 7,274 7,098 7,009 subject to sufficient distributable items1 6,947 260 354 332 484 332 ▪ Distributable items ba
Slide 37: The Institutional Protection Scheme (IPS)
The Institutional Protection Scheme (IPS) 1 RBI is part of the Raiffeisen Banking Group federal IPS. The IPS supports members if needed to ensure solvency and liquidity 2 IPS serves as capital cushion and source of liquidity to its members. Uniform and joint monitoring ensures the early identificati
Slide 38: Bank Levies and Resolution Fund
Bank Levies and Resolution Fund Impact in EUR mn FY 2018 FY 2019 FY 2020e Bank levy based on total assets (excluding derivatives) and including a one-off Austria 57 57 1 ~58 payment (spread over 4 years) of EUR 163 mn from 2017 on Bank levy of 0.15% (for up to HUF 50 bn of total assets) and 0.21% (f
Slide 39: NPE and NPL Distribution by Country
NPE and NPL Distribution by Country In EUR mn NPE Stock NPE Ratio NPE Ratio NPE Coverage Ratio NPE Coverage Ratio NPL Ratio NPL Ratio NPL Coverage Ratio NPL Coverage Ratio 31/12/2019 31/12/2019 30/9/2019 31/12/2019 30/9/2019 31/12/2019 30/9/2019 31/12/2019 30/9/2019 Czech Republic 237 1.4% 1.2% 61.0
Slide 40: Country and Segment Overview
Country and Segment Overview 2 1-12/2019 Total Assets Share of Loan/deposit Net Interest Cost/income Provisioning Return on equity (EUR mn) Total Assets2 Ratio Margin Ratio Ratio after tax Czech Republic 17,433 11.5% 86.2% 2.37% 52.0% 0.14% 14.7% Hungary 7,862 5.2% 70.5% 1.73% 69.8% (0.64%) 9.5% Pol
Slide 41: RBI Group
RBI Group In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 881 866 1.7% 840 825 843 3,412 3,362 1.5% Net fee and commission income 489 468 4.6% 437 402 467 1,797 1,791 0.3% Net trading income and fair value result 70 (8) – (27) (52) (3) (17) 17 –
Slide 42: Country Financials (CE) – Czech Republic
Country Financials (CE) – Czech Republic In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 96 104 (7.5%) 98 97 92 395 338 16.9% Net fee and commission income 33 32 2.0% 33 32 34 130 136 (4.3%) Net trading income and fair value result 4 (9) – (2) (1
Slide 43: Country Financials (CE) – Hungary
Country Financials (CE) – Hungary In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 22 34 (36.5%) 34 37 34 127 133 (4.3%) Net fee and commission income 38 37 0.7% 37 36 36 149 134 11.1% Net trading income and fair value result 1 (2) – (1) 1 1 (0) 1
Slide 44: Country Financials (CE) – Poland
Country Financials (CE) – Poland In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 3 4 (7.3%) 4 3 22 14 205 (93.1%) Net fee and commission income 0 1 (74.9%) 1 1 13 2 115 (98.2%) Net trading income and fair value result 0 0 (54.8%) 1 0 3 1 21 (93.2
Slide 45: Country Financials (CE) – Slovakia
Country Financials (CE) – Slovakia In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 75 74 0.5% 73 72 74 294 289 1.8% Net fee and commission income 41 40 2.2% 39 39 42 160 163 (2.2%) Net trading income and fair value result 30 (0) – 1 1 2 32 8 290.
Slide 46: Country Financials (SEE) – Albania
Country Financials (SEE) – Albania In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 14 14 (0.1%) 15 14 14 57 55 3.9% Net fee and commission income 4 4 (10.3%) 4 4 4 16 17 (1.8%) Net trading income and fair value result 1 1 (38.5%) (1) 2 (1) 3 (2)
Slide 47: Country Financials (SEE) – Bosnia & Herzegovina
Country Financials (SEE) – Bosnia & Herzegovina In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 17 17 0.2% 17 18 17 68 68 0.3% Net fee and commission income 11 11 0.3% 10 10 10 42 40 4.4% Net trading income and fair value result 0 1 (23.8%) 0 0 0
Slide 48: Country Financials (SEE) – Bulgaria
Country Financials (SEE) – Bulgaria In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 29 29 0.7% 29 26 27 114 103 10.0% Net fee and commission income 13 15 (11.2%) 14 13 14 55 49 12.2% Net trading income and fair value result 1 1 43.7% 0 1 1 3 4 (2
Slide 49: Country Financials (SEE) – Croatia
Country Financials (SEE) – Croatia In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 31 31 (1.0%) 30 30 33 122 125 (2.4%) Net fee and commission income 20 22 (10.0%) 17 16 17 75 71 6.1% Net trading income and fair value result 2 1 176.3% 1 2 (3) 6
Slide 50: Country Financials (SEE) – Kosovo
Country Financials (SEE) – Kosovo In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 11 11 1.3% 11 10 12 44 42 3.4% Net fee and commission income 3 4 (27.1%) 2 2 2 10 11 (2.9%) Net trading income and fair value result 0 (0) – (0) 0 0 0 (0) – Other n
Slide 51: Country Financials (SEE) – Romania
Country Financials (SEE) – Romania In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 96 96 0.6% 92 90 90 374 336 11.3% Net fee and commission income 40 44 (10.0%) 44 40 49 168 189 (11.0%) Net trading income and fair value result 10 4 123.7% 4 0 6 1
Slide 52: Country Financials (SEE) – Serbia
Country Financials (SEE) – Serbia In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 22 22 (0.9%) 22 22 22 88 85 4.1% Net fee and commission income 13 13 (3.8%) 13 11 12 51 45 11.5% Net trading income and fair value result 2 2 15.7% 3 1 2 8 8 0.9% O
Slide 53: Country Financials (EE) – Belarus
Country Financials (EE) – Belarus In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 27 28 (2.7%) 25 23 22 103 90 14.4% Net fee and commission income 15 16 (6.2%) 14 12 13 57 49 15.8% Net trading income and fair value result 2 1 157.7% 0 1 2 3 6 (46
Slide 54: Country Financials (EE) – Russia
Country Financials (EE) – Russia In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 218 205 6.3% 190 176 184 789 712 10.8% Net fee and commission income 121 106 13.9% 89 78 94 394 324 21.5% Net trading income and fair value result (10) 4 – 12 10 14
Slide 55: Country Financials (EE) – Ukraine
Country Financials (EE) – Ukraine In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 68 65 4.4% 61 57 57 250 220 13.9% Net fee and commission income 29 31 (5.4%) 24 22 25 106 92 15.2% Net trading income and fair value result 5 4 27.0% 3 2 3 14 7 102
Slide 56: Group Corporates & Markets
Group Corporates & Markets In EUR mn Q4/2019 Q3/2019 q-o-q Q2/2019 Q1/2019 Q4/2018 1-12/2019 1-12/2018 y-o-y Net interest income 143 160 (10.9%) 149 146 129 598 534 11.9% Net fee and commission income 118 97 21.7% 92 88 105 394 371 6.4% Net trading income and fair value result 20 15 41.2% 16 (16) (2
Slide 57: Sustainable Ratings and Industry Awards
Sustainable Ratings and Industry Awards The Banker – Bank of the year 2019 in “C+” level and prime status in sustainability rating by ISS ESG ▪ Central & Eastern Europe (June 2019) ▪ Bulgaria ▪ Bosnia and Herzegovina ▪ Ukraine Overall ESG score 77 – Outperformer 37th out of 336 Global Finance (June
Slide 58: Shareholder Information Overview
Shareholder Information Overview General Information Shareholder Structure1 ▪ Listed since 25 April 2005 on the Vienna Stock Exchange Prime Market ▪ Indices: ATX, ATX Prime, ATX five, MSCI Standard Index Europe, EURO STOXX Banks RBI free float ~41.2% ▪ 328,939,621 ordinary shares issued Regional ▪ I
Slide 59: Contact and Financial Calendar
Contact and Financial Calendar Contact Details Financial Calendar Group Investor Relations 30 April 2020 Start of Quiet Period1 14 May 2020 First Quarter Report, Conference Call Raiffeisen Bank International AG 08 June 2020 Record Date Annual General Meeting Am Stadtpark 9 18 June 2020 Annual Genera
Raiffeisen Bank International — FY2019 Earnings Presentation on 6ix