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Austria's RBI gets indications of interest for Russia business

Published 05/04/2022, 10:54 AM
Updated 05/04/2022, 10:56 AM
© Reuters. The logo of Raiffeisen Bank International is seen on their headquarters in Vienna, Austria, March 1, 2022.  REUTERS/Leonhard Foeger

By Alexandra Schwarz-Goerlich and Tom Sims

VIENNA (Reuters) - Austria's Raiffeisen Bank International, one of the European banks most exposed to Russia, has received unsolicited indications of interest for its Russia operations, the bank's chief said on Wednesday.

RBI has been studying strategic options for the business, including a possible withdrawal from Russia, following Russia's invasion of Ukraine.

The lender has operated in Russia since the collapse of the Soviet Union 30 years ago. Its business there, Russia's 10th largest bank by assets, contributed almost a third to the group's net profit last year.

"We've been approached," Chief Executive Johann Strobl told analysts. He said in the coming weeks the bank would try to assess the interest of those parties, which he didn't name.

Strobl said options include a full or partial sale of the business or spin-off. He said a decision may take time.

"We want to get an understanding as quickly as possible what options we have," he said.

On Wednesday, the bank said that its first-quarter profit had doubled but it was revising its outlook due to lower loan growth and higher risk assumptions.

The better-than-expected profit was helped by a rise in fees and commissions due to increased customer activity by its foreign-exchange business in Russia, though risk provisions wiped out many of those gains.

Moreover, loan growth in the country has "largely been stopped".

Consolidated profit in the quarter was 442 million euros ($464.59 million). That was up from 216 million euros a year earlier and exceeded the 165 million euros expected by analysts.

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Quarterly results were hurt by 319 million euros in impairments, almost entirely for business in Russia, Ukraine and Belarus.

The bank expects "stable" lending activity in 2022, compared with previous expectations of growth in the range of 7% to 9%.

It also expects a provisioning ratio of as much as 100 basis points, compared with previous expectations of 40 basis points.

The bank's shares are down 47% since Russia's invasion of Ukraine on Feb 24 that Russia describes as a "special military operation".

($1 = 0.9514 euros)

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