October 19, 2018 / 9:50 AM / a year ago

Austrian lender RBI signals robust results

VIENNA, Oct 19 (Reuters) - Austrian lender Raiffeisen Bank International’s (RBI) businesses in Russia, Ukraine and Romania are growing steadily and will help the lender to exceed its core capital ratio target this year, finance chief Martin Gruell said.

RBI, which operates across eastern Europe from the Czech Republic to Russia and down to the Balkans, aims to reach a fully loaded common equity tier 1 (CET 1) ratio, a measure of capital strength, of around 13 percent post dividend in the medium term.

“We will significantly exceed our 13 percent target by year-end,” Gruell told an investor fair in Vienna.

The bank plans to reward shareholders with a dividend “not lower than last year’s,” he added.

For 2017, RBI paid 0.62 euros per share, its first dividend in four years after it went through a radical restructuring in the wake of the financial crisis.

When asked about the bank’s nearly 20 percent share price drop since the beginning of the year, the finance chief said this was mainly due to worries about an escalation of tensions between the U.S. and Russia. The shares slipped 2 percent on Friday.

He said he expected “record earnings” in Romania and a profit of more than 100 million euros ($114.52 million) in Ukraine. Growth in Russia was continuing.

Russia is an important market for RBI as it has just under 10 percent of its assets there, but the lender said earlier that only 0.1 percent of its total assets were linked to companies directly affected by sanctions.

“It is primarily the fear of more sanctions in Russia,” Gruell said, adding that nervousness before the U.S. congressional elections in November obviously played a role. ($1 = 0.8732 euros) (Reporting by Kirsti Knolle Editing by Keith Weir)

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