May 15, 2019 / 6:31 AM / 10 days ago

UPDATE 2-Raiffeisen Bank Intl shares down as quarterly profit misses expectations

* Q1 profit down 43 percent on higher risk costs, hedging

* Q1 net profit at 226 mln eur vs 399 mln eur last year

* Late loan payments in Poland following sale of core business

* Shares down as much as 5.4% (Adds detail, shares)

VIENNA, May 15 (Reuters) - Raiffeisen Bank International missed profit expectations for the first quarter due to hedging against interest-rate risks, higher risk costs and late payments for foreign currency loans in Poland, pushing the stock down 5%.

The Austrian lender, which operates across eastern Europe, reported a 43% decline in first-quarter net profit to 226 million euros ($253 million), missing analyst expectations of 244 million.

“Due to various one-off effects, the first quarter of 2019 can be compared with the prior-year quarter only to a limited extent,” Chief Executive Johann Strobl said.

Loan growth and net interest income were developing positively, he added. “We have a strong capital base that allows us further growth.”

The outlook remained unchanged, RBI said.

Customer loans increased by 7% in the January-March period compared with the previous year, and deposits from customers grew 2%.

However, UBS analysts noted that strong volume growth was offset by a decline in the net interest margin, driven by its major market Russia.

The bank put aside 9 million euros for loan-loss provisions after releasing 83 million euros in the year-earlier period. Risk costs increased in particular in its corporates and markets segment, in Russia and in Poland, the group said.

It also booked a net trading loss of 52 million euros as it hedged long-term loan portfolios against interest rate change risks, a spokesman said. The comparable loss for last year’s period was 1 million euros.

RBI booked a loss of 19 million euros in its Polish division after a profit of 21 million a year ago as customers were late in paying foreign exchange loan instalments, the spokesman said. The lender sold its core business in Poland last year but had to keep the foreign currency loan portfolio of 3.5 billion euros, mostly in Swiss francs.

Its profit in Russia, a market with just under 10 percent of its assets, fell 8 percent mainly due to the depreciation of the rouble, the spokesman said.

$1 = 0.8921 euros Reporting by Kirsti Knolle, editing by Michael Shields and Louise Heavens

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