Raiffeisen Bank International Ag · VIE:RBI
Raiffeisen Bank International — H1 2018 Earnings Presentation
52 slides from Raiffeisen Bank International's earnings presentation, Aug 9, 2018
Slide 1: Raiffeisen Bank International H1 2018 Results
Raiffeisen Bank International H1 2018 Results Confidential
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 . . . . . . . . . . . . . . . . . . . . . . . 11 Risk Management . . . . . . . . . . . . . . . . . . 20 Appendix . . . . . . . . . . . . . . . . . . . . . . . 24 Group Investor Relations 9 August 2018 3
Slide 4: Executive Summary H1/2018
Executive Summary H1/2018 Consolidated profit of EUR 756 mn (up 29% year-on-year), including EUR 121 mn expected loss from sale of Polish core banking operations Operating income up 5% year-on-year supported by net interest income Exceptionally high releases of loan loss provisions led to positive i
Slide 5: Financial Highlights
Financial Highlights In EUR mn Q2/2018 Q1/2018 q-o-q H1/2018 H1/2017 y-o-y Net interest income 834 829 0.7% 1,663 1,593 4.4% Net fee and commission income 460 410 12.1% 869 843 3.2% Net trading income and fair value result 18 (1) – 16 27 (40.6)% Operating income 1,379 1,291 6.8% 2,669 2,551 4.7% Pro
Slide 6: Development of Financial Ratios
Development of Financial Ratios RoE (Consolidated)1 Cost/Income Ratio 16.2% 16.6% 14.6% 62.5% 14.0% 12.2% 59.1% 58.4% 8.9% 57.3% 55.9% 54.7% Q2/2017 Q3/2017 Q4/2017 FY/2017 Q1/2018 Q2/2018 Q2/2017 Q3/2017 Q4/2017 FY/2017 Q1/2018 Q2/2018 Net Interest Margin1 Provisioning Ratio1 0.63% 0.48% 0.41% 2.55
Slide 7: Growth across the Group
Growth across the Group H1/2018 Loans1 Projected Loan Growth2 Projected Loan Growth2 H1/2018 Loans1 Albania Kosovo EUR 667 mn EUR 603 mn Belarus EUR 997 mn Romania EUR 5,247 mn Bosnia & Herzegovina EUR 1,222 mn Russia EUR 8,133 mn Bulgaria EUR 2,400 mn Serbia Croatia EUR 1,261 mn EUR 2,361 mn Slovak
Slide 8: Update on Russia
Update on Russia Key Developments Strategy H1/2018 profit after tax stable y-o-y at EUR 237 mn We will look to grow across all business segments while maintaining our prudent risk approach RUB depreciated 5% YTD, y-o-y average rate down 11% Retail market: expanding the private individual customer ba
Slide 9: Macro Outlook
Macro Outlook Development of Real GDP (%) General Market Trends Country 2017 2018e 2019f 2020f Growth dynamics in Central Europe (CE) have peaked but remain CE Czech Republic 4.5 3.5 3.2 2.5 strong with GDP growth above 4 percent expected in 2018. Private consumption to benefit from further declinin
Slide 10: Outlook and Targets
Outlook and Targets We will pursue loan growth with an average yearly percentage increase in the mid-single digit area Impairment losses on financial assets (risk costs) in 2018 are expected to be below the 2017 level We anticipate that the NPL ratio will further reduce in the medium term We aim to
Slide 11: Table of Contents
Table of Contents Executive Summary . . . . . . . . . . . . . . . . . 3 Financials . . . . . . . . . . . . . . . . . . . . . . . 11 Risk Management . . . . . . . . . . . . . . . . . . 20 Appendix . . . . . . . . . . . . . . . . . . . . . . . 24 Group Investor Relations 9 August 2018 11
Slide 12: Overview of Key Financials
Overview of Key Financials Development (q-o-q) In EUR mn Q2/2018 Q1/2018 q-o-q Q2/2017 y-o-y Net interest income up EUR 6 mn mostly due to higher Net interest income 834 829 0.7% 796 4.7% volumes despite asset margin pressure; also supported Dividend income 48 9 440.3% 18 167.6% by rate increases in
Slide 13: Distribution of Profit before Tax – H1/2018
Distribution of Profit before Tax – H1/2018 In EUR mn (11.2)% 40.9% (4.4)% 73.8% (1.0)% 20.7% ∆ y-o-y 329 (292) 453 1,024 291 244 Central Europe Southeastern Eastern Europe Group Corporate Center RBI Group Europe Corporates & Markets & Reconciliation¹ Czech Republic Albania Belarus Corporates Vienna
Slide 14: Revenue Composition
Revenue Composition Split of Operating Income Development (q-o-q) In EUR mn Net interest income up EUR 6 mn mostly due to 67 42 29 4 53 18 higher volumes despite asset margin pressure; 26 10 429 446 410 460 also supported by rate increases in Romania (up 433 EUR 7 mn) and improved corporate business
Slide 15: Expense Base Breakdown
Expense Base Breakdown Development of General Administrative Expenses Development (q-o-q) In EUR mn General administrative expenses up EUR 14 mn 758 798 mainly driven by higher staff expenses 710 740 754 75 75 70 71 74 292 315 286 287 271 Staff expenses up EUR 12 mn due to salary increases in severa
Slide 16: Balance Sheet Overview
Balance Sheet Overview Balance Sheet (30/06/2018) In EUR mn 30/06/2018 31/03/2018 q-o-q 30/06/2018 31/12/2017 YTD Total assets 143,556 140,033 2.5% 143,556 135,146 6.2% EUR 144 bn 8% Loans to banks 9,774 10,386 (5.9)% 9,774 10,741 (9.0)% 25% 18% 13% Loans to customers 77,895 80,226 (2.9)% 77,895 77,
Slide 17: Regulatory Capital Overview
Regulatory Capital Overview Regulatory Capital Structure Changes in Regulatory Capital (YTD) Common equity tier 1 capital up by EUR 220 mn to EUR 9,486 mn mainly due In EUR mn 30/06/2018 31/12/2017 to inclusion of HY/2018 result Common equity tier 1 (before deductions) 10,226 9,955 IFRS 9 impact of
Slide 18: 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 from 2017) RBI Group 17.7% Combined buffer requirement in 2018 of 2.97%: RBI Group − 1.875% capital conservation buffer 14.4% RBI Group − 1.0% systemi
Slide 19: Funding Overview
Funding Overview Funding Structure (30/06/2018) NSFR and Loan/Deposit Ratio Long-term refinancing Non-financial 112% 113% 113% 113% 16% corporations 110% 26% 98% 97% 97% 98% 95% Short-term refinancing 25% Households Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 33% Total: EUR 129 bn Loan/deposit ratio NSF
Slide 20: Table of Contents
Table of Contents Executive Summary . . . . . . . . . . . . . . . . . 3 Financials . . . . . . . . . . . . . . . . . . . . . . . 11 Risk Management . . . . . . . . . . . . . . . . . . 20 Appendix . . . . . . . . . . . . . . . . . . . . . . . 24 Group Investor Relations 9 August 2018 20
Slide 21: RWA and Credit Portfolio Development
RWA and Credit Portfolio Development RWA and Credit Portfolio Development Comments (YTD) In EUR mn Total Exposure Retail Non-Retail Total Exposure RWA Change Credit risk RWA: increased by EUR 2,612 mn 30/06/2018 30/06/2018 30/06/2018 Change (YTD) 30/06/2018 RWA (YTD) • Non-retail RWA up by EUR 1,963
Slide 22: 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 of EUR 73.5% 361 mn (Q2: EUR 226 mn) and recoveries (incl. writebacks) of EUR 519 70.5% 69.4% 69.7% mn (Q2: EUR 319 mn) 67.0% NPL stock (E
Slide 23: NPL Distribution by Country
NPL Distribution by Country NPL Ratio and Coverage Ratio Comments (YTD) In EUR mn NPL NPL NPL NPL NPL NPL down by EUR 761 mn due to NPL sales of EUR 361 Stock Ratio Ratio Coverage Ratio Coverage Ratio mn, recoveries of EUR 519 mn and Polish core banking 30/06/2018 30/06/2018 31/03/2018 30/06/2018 31
Slide 24: Table of Contents
Table of Contents Executive Summary . . . . . . . . . . . . . . . . . 3 Financials . . . . . . . . . . . . . . . . . . . . . . . 11 Risk Management . . . . . . . . . . . . . . . . . . 20 Appendix . . . . . . . . . . . . . . . . . . . . . . . 24 Group Investor Relations 9 August 2018 24
Slide 25: Geographic Footprint
Geographic Footprint Austria, #3 Central Europe (CE) Eastern Europe (EE) Loans: EUR 29.0 bn Southeastern Europe (SEE) Branches: 19 Leading regional player with Czech Republic, #5 Russia, #10 CEE presence of over 30 years Loans: EUR 10.5 bn Loans: EUR 8.1 bn servicing approx. 16.7 million Branches: 1
Slide 26: Country and Segment Overview
Country and Segment Overview 1-6/2018 Total Assets2 Share of Total Assets2 Loan/deposit Net Interest Provisioning Ratio NPL Ratio NPL Coverage Ratio (EUR mn) Ratio Margin Czech Republic 15,986 11.1% 89.9% 2.04% 0.16% 2.1% 102.2% Hungary 7,162 5.0% 64.1% 1.94% (0.74)% 6.8% 84.6% Poland 11,119 7.7% 10
Slide 27: RBI Group
RBI Group In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 834 829 0.7% 818 814 796 1,663 1,593 4.4% 3,225 Net fee and commission income 460 410 12.1% 446 429 433 869 843 3.2% 1,718 Net trading income and fair value result 18 (1) – 10 (1)
Slide 28: Country Financials (CE) – Czech Republic
Country Financials (CE) – Czech Republic In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 80 82 (2.4)% 76 70 66 161 134 20.0% 280 Net fee and commission income 36 33 7.8% 36 30 32 69 66 4.6% 132 Net trading income and fair value result 1 0
Slide 29: Country Financials (CE) – Hungary
Country Financials (CE) – Hungary In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 33 34 (2.4)% 33 35 34 66 69 (3.4)% 137 Net fee and commission income 34 31 10.0% 34 32 33 65 64 2.2% 130 Net trading income and fair value result (3) 5 – 0
Slide 30: Country Financials (CE) – Poland
Country Financials (CE) – Poland In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 62 64 (2.4)% 66 67 65 126 127 (0.4)% 260 Net fee and commission income 36 32 12.9% 35 35 35 68 68 0.1% 138 Net trading income and fair value result (0) 5 – 2
Slide 31: Country Financials (CE) – Slovakia
Country Financials (CE) – Slovakia In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 71 68 3.8% 68 73 64 139 133 4.6% 274 Net fee and commission income 41 40 0.9% 40 40 38 81 77 5.0% 157 Net trading income and fair value result 2 2 (1.2)% 4
Slide 32: Country Financials (SEE) – Albania
Country Financials (SEE) – Albania In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 13 13 0.1% 14 14 14 27 28 (4.8)% 56 Net fee and commission income 4 4 14.5% 4 4 4 8 7 11.6% 15 Net trading income and fair value result (2) (1) 63.2% (1) 0
Slide 33: Country Financials (SEE) – Bosnia & Herzegovina
Country Financials (SEE) – Bosnia & Herzegovina In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 16 16 (0.3)% 17 16 16 33 33 (1.0)% 66 Net fee and commission income 9 10 (8.1)% 10 10 11 19 20 (3.3)% 39 Net trading income and fair value res
Slide 34: Country Financials (SEE) – Bulgaria
Country Financials (SEE) – Bulgaria In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 25 25 (0.0)% 24 25 26 50 52 (3.8)% 101 Net fee and commission income 12 11 9.0% 11 12 11 23 22 4.4% 45 Net trading income and fair value result 1 0 161.4%
Slide 35: Country Financials (SEE) – Croatia
Country Financials (SEE) – Croatia In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 31 30 1.6% 30 31 33 61 65 (6.4)% 126 Net fee and commission income 18 15 21.3% 16 21 18 33 34 (2.6)% 71 Net trading income and fair value result (1) 2 – (0
Slide 36: Country Financials (SEE) – Kosovo
Country Financials (SEE) – Kosovo In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 10 10 1.3% 10 10 9 20 19 5.6% 38 Net fee and commission income 3 2 7.3% 3 4 3 5 6 (15.5)% 13 Net trading income and fair value result (0) 0 – (0) (0) 0 0 0
Slide 37: Country Financials (SEE) – Romania
Country Financials (SEE) – Romania In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 82 75 9.3% 71 65 64 156 127 22.9% 263 Net fee and commission income 48 44 9.5% 49 43 44 92 84 8.7% 176 Net trading income and fair value result 9 3 255.9%
Slide 38: Country Financials (SEE) – Serbia
Country Financials (SEE) – Serbia In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 21 21 (0.0)% 21 21 20 42 40 4.6% 81 Net fee and commission income 14 8 67.4% 11 11 10 22 20 12.5% 41 Net trading income and fair value result (1) 5 – (0) 2
Slide 39: Country Financials (EE) – Belarus
Country Financials (EE) – Belarus In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 23 22 2.2% 22 24 29 45 60 (25.8)% 107 Net fee and commission income 13 11 11.6% 13 13 13 24 26 (6.5)% 52 Net trading income and fair value result 1 1 20.9%
Slide 40: Country Financials (EE) – Russia
Country Financials (EE) – Russia In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 171 176 (2.7)% 182 166 173 347 341 1.8% 688 Net fee and commission income 76 73 4.7% 82 77 82 149 157 (5.4)% 317 Net trading income and fair value result (0)
Slide 41: Country Financials (EE) – Ukraine
Country Financials (EE) – Ukraine In EUR mn Q2/2018 Q1/2018 q-o-q Q4/2017 Q3/2017 Q2/2017 1-6/2018 1-6/2017 y-o-y 1-12/2017 Net interest income 56 49 14.2% 48 48 47 106 92 15.1% 188 Net fee and commission income 22 20 10.3% 24 25 23 43 44 (2.4)% 93 Net trading income and fair value result 3 3 (12.8)
Slide 42: Bank Levies and Resolution Fund
Bank Levies and Resolution Fund Impact in EUR mn FY 2017 1-6 2018 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 57 491 ~56 from 2017 on Bank levy of 0.15% (for up to HUF 50 bn of total assets) and 0.21% Hu
Slide 43: 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 31/12/2017 1,002 4,992 6,496 (2,553) 9,937 660 645 11,241 Impact of adopting IFRS 9 0 0 (223
Slide 44: 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 30/06/2018 31/03/2018 30/06/2018 31/03/2018 30/06/2018 31/03/2018 30/06/2018 31/03/2018 Czech Republic 1.6% 1.7% 67.4% 67.3% 2.1% 2.3% 102.2% 99.4%
Slide 45: 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 46: 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 47: Maturity Profile
Maturity Profile Maturity Profile at 30/06/2018 (in EUR mn) 1,269 1,169 1,078 917 301 152 500 899 57 739 751 225 673 486 278 546 520 409 515 868 490 650 635 285 194 500 440 490 342 85 218 153 75 40 36 29 98 11 89 7 10 20 96 41 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 203
Slide 48: AT1 and Subordinated Instruments
AT1 and Subordinated Instruments Regulatory Capital Initial Reset Nominal Issuance First Call Issuer ISIN Call period Maturity Treatment1 Recognition2 Coupon Coupon outstanding date Date 5Y EUR Raiffeisen Bank Additional Tier 1 98.1% XS1756703275 4.500% MidSwap + EUR 500 mn 17 Jan 2018 25 Jun 2025 S
Slide 49: 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 1,894 subject to sufficient distributable items1 1,602 Distributable items based on RBI AG's unconsolidated 1,530 accou
Slide 50: Shareholder Information Overview
Shareholder Information Overview General Information Shareholder Structure1 Listed since 25 of April 2005 on the Vienna Stock Exchange Prime Market Indices: ATX, ATX Prime, ATX five, MSCI Standard Index Europe, RBI free float EURO STOXX Banks ~41.2% 328,939,621 ordinary shares issued ISIN: AT0000606
Slide 51: Sustainable Ratings, Indices, and Awards
Sustainable Ratings, Indices, and Awards Ratings, Indices and Certification Awards “C+” Prime status in sustainability rating by oekom research (June 18, 2018) Austrian Sustainability Reporting Award (ASRA 2017) for the third best report (2016) by a large corporation Overall ESG score 72 – Outperfor
Slide 52: Contact and Financial Calendar
Contact and Financial Calendar Contact Details Financial Calendar Susanne E. Langer 31 October 2018 Start of Quiet Period1 14 November 2018 Third Quarter Report, Conference Call Head of Group Investor Relations Spokesperson 30 January 2019 Start of Quiet Period1 06 February 2019 Preliminary Results
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