Russia remains one of six key markets for RBI
VIENNA. Oct 4 (Interfax) - Russia remains one of the six priority markets for Raiffeisen Bank International (RBI), Karl Sevelda, RBI's chief executive since the summer, said at a press conference.
RBI has identified six key markets in which it will continue to grow - Russia, Poland, Slovakia, the Czech Republic, Romania and Austria, Sevelda said.
The bank does not rule out scaling down its business in other markets, such as Hungary and Slovenia, and might leave some regions completely, but this does not in any way apply to Russia, Sevelda said.
He said RBI has identified three priority areas to work on in the near term - the geography of its presence, cost policy and the group's capital. The bank has worked out a special program to cut costs in the next three years and hopes to achieve savings of 400 million-450 million euros, Sevelda said, adding that RBI wants to bring costs in 2016 to the level of 2012.
In order to bolster its capital, the bank still has plans to raise financing, but not attract a strategic investor, he said. Investors are already showing interest in both RBI and its bank in Russia, he said.
The group plans to increase the number of Raiffeisenbank branches in Russia by 10% from the current 190 by the end of 2014, Sevelda said. This year Raiffeisenbank has already purchased the rights to lease more than 30 branches from Sberbank , located primarily in Moscow, as part of the expansion strategy, he said, without specifying the price of the deal.
He said Raiffeisenbank plans to grow organically in Russia and there are no plans to buy out loan portfolios.
Sevelda did not comment on the group's expectations concerning the share of group net profit that RBI's companies in Russia will earn this year.
RBI is not alarmed that its Russian subsidiaries generate such a large share of group profit, but in the interests of spreading risks it would like profits to be more evenly distributed throughout the group, Sevelda said. In the 1998 financial crash, the bank lost $140 million-$150 million in Russia, and in terms of risk it does not want to depend heavily on any one country, he said.
It was reported earlier that the IFRS net profit of RBI's Russian companies rose 0.7% to 257 million euros in the first half of 2013, while RBI saw its net profit tumble nearly 60% to 311 million euros. The Russian subsidiaries - Raiffeisenbank, a leasing company and an investment company - therefore generated 83% of the group's net profit.
Raiffeisenbank was Russia's 11th largest bank by assets at the end of the first half of 2013, according to the Interfax-100 ranking of the country's lenders.
