Raiffeisen Bank Int'l targets 450 mln eur cost cuts
VIENNA, Sept 24
VIENNA, Sept 24 (Reuters) - Raiffeisen Bank International aims to slash costs by up to 450 million euros ($607 million) by the end of 2016, including by cutting an unspecified number of jobs, emerging Europe's second-biggest lender said on Tuesday.
The Vienna-based bank said last month it was readying "painful" cost cuts that would include forced layoffs as new Chief Executive Karl Sevelda reins in the emerging Europe empire that he took over in June.
In notes released ahead of an analyst meeting, Raiffeisen said it was taking a hard look at personnel costs - which made up nearly half its administrative expenses last year - as well as spending on office space and information technology.
It will reevaluate its product and sales networks and create more cross-border shared-service centres in addition to existing ones for transactions in Romania and credit cards in Slovakia.
"There will be job cuts...but I cannot tell you where or what amount. We are just at the beginning of the project," a bank spokesman said.
The group employed 58,831 people at the end of June.
The goal is to chop costs by a total of 400-450 million euros between 2014 and 2016 via actual cost reductions and "mitigation of inflation", it said. That would put administrative costs in 2016 at the level of 2012.
Cost cuts of 450 million euros would represent nearly 14 percent of 2012 full-year costs.
Raiffeisen said it would have more to say when it releases third-quarter results on Nov. 27.
Administrative costs went up nearly 10 percent in 2010, almost 5 percent in 2011, 4.6 percent in 2012 to 3.3 billion, and 6.5 percent in the first half of this year, primarily due to integrating Polish unit Polbank and pay inflation in Russia.
Sevelda has taken a much more conservative line than his forceful, ambitious predecessor Herbert Stepic, who built the bank into a regional powerhouse but then quit in a controversy over his personal finances.
His departure exposed a power struggle over the group's direction and strategy.
The juggernaut spanning 18 markets that Stepic forged during four decades at the bank is less efficient than its main competitors, Austrian peers Bank Austria and Erste Group Bank.
Raiffeisen had a cost-to-income ratio of 60.2 percent in the first half of 2013, compared with 54.9 percent at Bank Austria and 52.8 percent at Erste Group.
($1 = 0.7412 euros) (Reporting by Michael Shields; Editing by David Cowell)
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