Share of Raiffeisen's Russian subsidiaries in group profit to moderate in 2013 - Stepich
MOSCOW. May 28 (Interfax) - The Russian subsidiaries of Raiffeisen Bank International (RBI), which accounted for almost 90% of the group's overall profit in the first quarter of 2013, will contribute a lower proportion for the full year, RBI Executive Director Herbert Stepich.
"We do not expect that the Russian share will reach 90% in overall group profits," Stepich said.
"We expect that other countries will begin to recover and, naturally, the share of earnings in Russia will decline. As we noted, the economies of other countries showed some improvement in the second half of the latest accounting period," he said.
"For example, profitability in the Central European block was under pressure from the integration of Polbank and we expect it to improve in the second quarter," he said.
RBI's Russian companies increased first quarter net profit 29.9% year-on-year to 156 million euro under international financial reporting standards, up from 120 million euro in the first quarter last year, RBI reported. The net profit in Russia accounted for just under 90% of net profit for the entire RBI group, which declined almost 70% to 174 million euro in the three months.
Stepich said RBI plans to increase the share of retail in the Russian business' portfolio. "In the first place, we feel our capitalization in Russia is sufficiently effective. Secondly, we plan to continue developing our business in Russia. That means we will develop the corporate and the retail business. Thirdly, as reported earlier, we will increase the share of the retail business, because we believe that is a more profitable business. However, that does not mean we plan to develop consumer lending, which is one of the reasons that we are not demonstrating the growth rates of our competitors - 30%, 40%, 50% - in retail lending," Stepich said.
Overall, he said, RBI "feels good" about its Russian business. "We are staying. We will grow retail and have no plans to cut back [business]," he said.
Raiffeisen Bank International is represented in Russia by Raiffeisenbank, and by leasing and investment companies.
Raiffeisenbank was the 12th biggest Russian bank by assets as of the end of the first quarter of 2013 according to the Interfax-100 ranking compiled by the Center for Economic Analysis.