4 May 2022 15:14

RBI continues to review options for future of Russian subsidiary, looking to take all factors into account

MOSCOW. May 4 (Interfax) - Austria's Raiffeisen Bank International (RBI) continues to review options for the future of its Russian subsidiary, including a "carefully managed exit" from Russia, and will take the interests of its customers, shareholders and employees into account, the group said on a financial report to International Financial Reporting Standards.

"On 17 March, we announced the review of all strategic options for the future of Raiffeisenbank in Russia, including a carefully managed exit from Russia. It is no secret that this process is not easy and depends not only on further political framework conditions in Russia, strict regulatory requirements, but also the obligations towards our customers and employees. Furthermore, be rest assured that the interests of our shareholders also play a central role in this process. All of these factors must be taken into account and carefully weighed, and we therefore ask for understanding that this process may take some time," RBI CEO Johann Strobl said in a foreword to the report.

He said the RBI subsidiaries were strongly capitalized and had ensured that they are self-financing. In addition, comprehensive risk-strategic measures, such as provisions amounting to 115 million euros for sanctions and geopolitical risks in the region had been undertaken as a precautionary measure months before the special operation in Ukraine began.

RBI said the Russian subsidiary, Raiffeisenbank, had practically stopped issuing new loans since the end of February. Its loan portfolio decreased 8.7% to 10.6 billion euros from 11.6 billion euros during Q1 2022, according to a presentation.

Customer accounts and deposits with the Russian subsidiary bank grew 9.6% to 16.2 billion euros from 14.8 billion euros.

RBI's Russian business comprises the bank as well as leasing, insurance and management companies.

They made a profit after tax of 96 million euros in Q1 2022, level with the same period of 2021 and 21% of Group profit after taxes, which was 458 million euros.

Provision charges were 209 million euros, nearly three times the 72 million euros reported for the whole of 2021 and accounted for 5.7% of the loan portfolio, up from 1% in 2021. The non-performing loan ratio fell to 1.4% from 1.5%.

The group had 3.7 million customers in Russia at end-Q1 2022, down from 4.3 million at end-2021 and 3.9 million tonnes at end Q1 2021; and 9,663 employees, up from 9,327 at end-2021.

Raiffeisenbank was Russia's 10th largest bank by assets at the end of 2021, according to the Interfax-100 ranking prepared by the Interfax Center for Economic Analysis.