May 14, 2020 / 6:52 AM / 21 days ago

UPDATE 2-Austria's RBI warns of profit, keeps dividend plan

* Q1 profit down 22% to 177 mln euros

* Takes COVID-19-related writedowns of 96 mln euros

* Plans to pay dividend for 2019, 2020

* Expects moderate 2020 loan growth (Adds CEO, dividend, shares, detail)

By Kirsti Knolle

VIENNA, May 14 (Reuters) - Austria’s Raiffeisen Bank International (RBI) on Thursday warned on profits this year after a 22% fall in the first quarter but stuck to its dividend plans.

“Due to the expectation of a large-scale global recession, RBI anticipates a significant decline in profit,” said RBI, one of the largest banks in central and eastern Europe.

Shares in the bank, which reported a net profit last year of 1.23 billion euros ($1.33 billion), were down 4.8% at 1221 GMT, lagging a European banks sector index down 3.2%.

Net profit fell to 177 million euros in its January-March first quarter on higher provisions in response to governments’ payment moratorium schemes.

Such schemes are up and running in nearly all the 14 countries it operates in, RBI said.

The bank expects that up to 40% of its clients in its major markets in the Czech Republic, Slovakia and Russia will make use of state aid schemes, it said in a web presentation.

RBI booked write-offs in relation to the coronavirus pandemic of 96 million euros in the first quarter, of which 67 million were attributable to non-financial corporations and 29 million to retail customers, it said.

It booked a net loss for loan modifications of 8 million euros.

Net interest income rose 6.9% to 881 million euros, helped by lower interest expenses for bank deposits.

RBI expects 2020 loan growth to be moderate and the provisioning ratio to increase to 75 basis points after having previously guided for 50-75 basis points.

CEO Johann Strobl said RBI would stick to its planned payout to shareholders for 2019. The bank has proposed a dividend of 1.0 euro per share, up from 0.93 euros the previous year.

“We believe that we are very well placed to propose a dividend to the shareholders meeting in October,” Strobl said on a call, adding it currently also expected to be able to pay a dividend for 2020.

RBI confirmed its medium-term target of a consolidated return on equity of approximately 11%, but said the rate would be in the mid-single digits this year.

$1 = 0.9272 euros Reporting by Kirsti Knolle' editing by Michelle Martin and Jason Neely

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