All figures are based on International Financial Reporting Standards (IFRS). Raiffeisen Bank International AG (RBI) officially commenced its business activities this past October; however, the founding of the new bank was effective retroactively as of 1 January 2010. Apart from year-end figures 2010, all figures are provided on a pro forma basis.
«The year 2010 was a decisive one, both for our company and for its home market Central and Eastern Europe. Despite the considerable additional costs brought about by the merger, Raiffeisen Bank International managed to post a very satisfying full-year profit of more than one billion euros for its first financial year. Moreover, with our merger, we have ensured that we are well-positioned to meet future challenges and market requirements. Central and Eastern Europe has, on the whole, achieved the turnaround and all of the region’s countries are seen back on the path of growth in 2011. This should result in a clear rise in the demand for financial products — something for which we are also well-prepared,» said Herbert Stepic, CEO of Raiffeisen Bank International.
RBI posted a consolidated profit (after tax and non-controlling interests) of ˆ 1,087 million in 2010, which represents an increase of 141.5 per cent compared to RBI’s pro forma consolidated profit a year earlier (2009: ˆ 450 million). This result reflects, above all, the positive influence of markedly lower need for net provisioning for impairment losses, which declined by 46.5 per cent to ˆ 1,194 million (pro forma 2009: ˆ 2,232 million). In addition, there was a one-off effect with regard to income taxes. This item was lower in spite of a 58 per cent rise in net income due, in particular, to deferred tax income arising from the recognition of tax loss carry-forwards in Austria (ˆ 120 million) and changes to tax legislation in Ukraine (ˆ 26 million). Profit before tax rose by 62.9 per cent to ˆ 1,287 million (pro forma 2009: ˆ 790 million), while the profit after tax increased by 121.7 per cent to ˆ 1,177 million (pro forma 2009: ˆ 531 million). Earnings per share rose from pro forma ˆ 1.29 in 2009 by ˆ 3.27 to ˆ 4.56. The Management Board will propose a dividend of ˆ 1.05 per share at this Annual General Meeting. If this proposal is approved, the total dividend will be ˆ 204.3 million.
RBI’s operating result in 2010 fell by 1 per cent to ˆ 2,424 million as a result of higher general administrative expenses and the Hungarian bank levy, which comes under other net operating income.
Due to the improvement in overall economic conditions and the measures taken to stabilize the loan portfolio, provisioning for impairment losses in 2010 fell by 46.5 per cent or ˆ 1,038 million to ˆ 1,194 million.
The return on equity (ROE) before tax rose year-on-year by 4.2 percentage points to 13.7 per cent, primarily due to a reduction in provisioning for impairment losses.
Following a 14 per cent decline in 2009 due to cost-cutting measures and currency effects, general administrative expenses grew by 10 per cent or ˆ 264 million to ˆ 2,980 million in the year under review. In contrast to the previous year, currency appreciation in 2010 partly contributed to a rise in general administrative expenses.
Market-related changes in salary structures and reinstated bonus payments led to an 8 per cent increase in staff expenses to ˆ 1,453 million.
The average number of staff fell by 6 per cent or 3,692 to 59,188, primarily as a result of cutbacks in Ukraine, Russia and Romania.
As per the end of 2010, RBI had 59,782 employees, which represents an increase of 1.0 per cent in comparison to the end of 2009.
Higher general administrative expenses, which grew by 10 per cent — and thus by more than operating income, which was up 5 per cent — to reach ˆ 2,980 million were the main reason for the increase in the cost/income ratio by 2.6 percentage points to 55.1 per cent. This ratio of general administrative expenses to operating income is a key measure of a bank’s efficiency.
With the merger of Raiffeisen International and RZB’s principal business areas shown retroactively, the total assets increased by ˆ 69.4 billion at the start of the year 2010. It fell year-on-year by ˆ 14.5 billion to ˆ 131.2 billion at year-end. This fall was largely due to interbank business. As a result of the appreciation of the US dollar and most CEE currencies, the total assets increased by approximately ˆ 2.4 billion. Adjusted for these effects, there was an organic reduction of the total assets of around 12 per cent or ˆ 16.9 billion.
You can access the web-version of Raiffeisen Bank International’s annual report at ar2010.rbinternational.com. A printed English-language version can also be ordered on that webpage. A short video statement of CEO Herbert Stepic can be found at www.rbinternational.com/videostatementstepic
Raiffeisen Bank International AG (RBI) regards both Austria, where it is a leading corporate and investment bank, and Central and Eastern Europe (CEE) as its home market. In CEE, RBI operates an extensive network of subsidiary banks, leasing companies and a range of other specialised financial service providers in 17 markets.
RBI is the only Austrian bank with a presence in both the world’s financial centres and in Asia, the group’s further geographical area of focus.
In total, around 60,000 employees service about 14 million customers through around 3,000 business outlets, the great majority of which are located in CEE.
RBI is a fully-consolidated subsidiary of Raiffeisen Zentralbank Österreich AG (RZB). RZB indirectly owns around 78.5 per cent of the common stock, the remainder is in free float. RBI’s shares are listed on the Vienna Stock Exchange. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country’s largest banking group, and serves as the group head office of the entire RZB Group, including RBI.