March 14, 2018 / 7:48 AM / 4 days ago

Raiffeisen pays first dividend in four years, looking out for acquisitions

VIENNA (Reuters) - Austria’s Raiffeisen Bank International (RBIV.VI) said on Wednesday it would propose a dividend for 2017, its first in four years, and aims to pay out between 20 and 50 percent of its consolidated profit in the future.

FILE PHOTO: The logo of Raiffeisen Bank International is seen at a branch office in Vienna, Austria March 15, 2017. REUTERS/Heinz-Peter Bader/File Photo

The lender, which went through a radical restructuring in the wake of the financial crisis, scaling back operations in central and eastern Europe (CEE), expects strengthening economies in the region to boost growth in 2018.

“We want to return to growth... Our strategy is to be a leading universal bank in CEE, for which focused growth is essential,” Chief Executive Johann Strobl said in the bank’s annual report, adding that acquisitions were an option to reach that goal.

“In light of the good capital position, we are also looking at buying portfolios,” Strobl said.

Raiffeisen (RBI), which operates across eastern Europe from the Czech Republic to Russia and down to the Balkans, said it would propose a dividend of 0.62 euros per share for 2017.

It also said it aimed 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.

The ratio stood at 12.7 percent at the end of 2017.

    RBI said it aims to reduce its NPL ratio further from 5.7 percent at the end of last year. A declining backlog of bad loans helped the bank beat 2017 net profit forecasts.

    Raiffeisen said it still plans to either float or sell a majority stake in its Polish operations.

    In November, two sources familiar with the situation told Reuters that BNP Paribas (BNPP.PA) has approached RBI to express interest in buying Raiffeisen Bank Polska.

    Raiffeisen’s Polish unit is in the midst of a restructuring after reaching a cost/income ratio of 59.8 percent at the end of 2017. “We expect it to be considerably better in 2019,” Strobl said.

    Reporting by Kirsti Knolle; Editing by Maria Sheahan and Susan Fenton

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