* Q2 net profit 345 mln eur vs poll avg 273 mln
* Q2 net interest income 897 mln vs poll 918 mln
* Q2 provisioning for impairment losses 197 mln vs poll 251
* Reiterates targets, says NPL ratio to peak in H2
(Adds comments from news conference, market reaction)
By Michael Shields
VIENNA, Aug 25 Raiffeisen Bank International
could raise its share capital within a year, emerging
Europe's number three lender said on Thursday while reporting
second-quarter net profit that blew past market expectations.
The decision on whether to sell new shares hinges on a
variety of factors, not least how bank shares fare after a
market rout and how regulatory requirements play out, Chief
Executive Herbert Stepic told a news conference.
"I don't see any reason why a capital increase wouldn't
succeed" over a 12-month span, he said, adding he could not
state a floor price at which it would not make sense to tap the
markets with a share sale.
The bank said in a statement it was examining whether a
share sale made sense. "Depending on market developments, a
capital increase may be a possible option within the next 12
months," it said.
Stepic said this marked little change in the bank's previous
stance but it decided this time to put it in writing because
reporters and analysts always asked about its plans.
RBI will hold a road show during the annual meetings of the
World Bank and International Monetary Fund in Washington this
autumn, he said, but added this was not directly linked to its
share sale deliberations.
Second-quarter net profit of 345 million euros ($497
million), up from 138 million a year earlier, beat even the
highest estimate in a Reuters poll of analysts as risk
provisions fell more sharply than expected.
Raiffeisen reiterated its medium-term target of generating a
pretax return on equity of 15-20 percent and stuck to its view
that its non-performing loan ratio would peak in the second half
of this year.
The question of whether RBI would issue new shares to catch
up with peers and bolster its balance sheet has weighed on the
Austrian group's stock price for months.
Its shares halved from a 2011 high at 45.40 euros in
February to 24.36 euros this month. They bounced 4.3 percent on
Thursday to 28 euros thanks to bumper quarterly profits.
"RBI reported very strong results, clearly beating consensus
and our estimates due to significantly higher trading income and
lower provisions," UniCredit's Thomas Neuhold said in a research
Raiffeisen easily passed European bank stress tests this
year, but said on Thursday its core tier one capital ratio
slipped to 8.5 percent at the end of the first half from 8.9
percent of risk-weighted assets at the end of March.
Raiffeisen stock has been trading on a 12-month forward
price/earnings ratio of around 5 times, a discount to Austrian
peer Erste Group on nearly 7 times, according to Thomson Reuters
StarMine, which weights analysts' estimates by their track
record for accuracy.
Special state taxes in Austria and Hungary totalled 68
million euros in the half and will cost 130 million in 2011.
RBI kept its exposure to the sovereign debt of Greece and
Ireland at zero as of the end of June. It reduced its combined
sovereign exposure to Portugal and Spain to 7 million euros,
while exposure to Italy edged up to 474 million.
High margins have allowed Raiffeisen, Erste Group Bank
and market leader UniCredit to remain
profitable in emerging Europe, a region they think will outgrow
sluggish western European markets.
UniCredit unit Bank Austria's first-half net profit rose more
than half, helped by lower provisioning costs.
Erste Group lowered its full-year outlook last month as bad
loans remained high in Hungary and Romania and as lending growth
Oesterreichische Volksbanken's OTVVp.VI first-half net
profit was nearly wiped out by writedowns on Greek assets, it
said, adding a dividend was now unlikely. It was one of eight
banks to fail this year's European stress tests.
($1 = 0.694 Euros)
(Additional reporting by Sylvia Westall and Angelika Gruber;
Editing by David Cowell)