* Pretax profit rises 14.3 pct to 1.05 bln euros in 2013
* NPL ratio increases to 10.2 pct
* Proposes unchanged dividend of 36 euros per share
(Adds details from annual report)
By Michael Shields
VIENNA, April 11 Raiffeisen Zentralbank's
core tier 1 capital ratio fell 1 percentage point to
9.9 percent of risk-weighted assets at the end of 2013 under
local accounting rules as weak eastern European currencies hit
its balance sheet, the Austrian lender said on Friday.
The unlisted parent of Raiffeisen Bank International
- the second-biggest lender in central and eastern
Europe (CEE) - is one of six Austrian banks to come under direct
supervision of the European Central Bank later this year.
Announcing its 2013 annual results, it proposed keeping its
dividend unchanged at 36 euros per share.
"Core capital declined by 311 million euros ($432 million)
to 9.695 billion due mainly to the negative exchange-rate trend
of the Russian rouble, the Ukrainian hryvnia, the Czech koruna
and the Polish zloty," RZB said in its 2013 annual report.
The trend continued into 2014 as the political crisis in
Ukraine - where Raiffeisen is a top-five bank - heaped pressure
on the hryvnia and rouble, undermining the value of local assets
when expressed in euros.
"At the time the year-end report was being finalised (in
early 2014), the development of all currencies relevant to RZB
resulted in a reduction in its tier 1 ratio (CET1) of roughly 25
basis points," RZB's annual report said.
Raiffeisen Bank International had already flagged the issue
when it reported its 2013 results last month. It swung to a
fourth-quarter group net profit of 146 million euros, beating
market estimates as net interest income and risk provisions came
in better than expected.
The impact of eastern European currencies highlights risks
the group faces in a region plunged into uncertainty by Russia's
annexation of the Crimean peninsula, triggering the worst
East-West conflict since the Cold War.
Despite the threat of Western sanctions against Moscow,
Raiffeisen remains committed to its highly profitable Russian
business, RBI Chief Executive Karl Sevelda said last month. He
sought to play down potential problems in Ukraine.
But it was so concerned about the crisis in Ukraine that it
said previous targets for lending and risk provisioning now
depended on how events in the region play out.
Parent RZB's 2013 profit before tax rose 14.3 percent to
1.05 billion euros as its operating result rose 26 percent. Net
provisioning for impairment losses rose 16 percent to 1.2
Its ratio of non-performing loans (NPL) rose to 10.2 percent
of its loan book from 9.7 percent in 2012, while its NPL
coverage ratio fell 3.8 percentage points to 63.1 percent.
($1 = 0.7204 Euros)
(Reporting by Michael Shields; editing by Eric Auchard and