Austrian Raiffeisen Bank International (RBI) experienced a 4.5% surge in its shares to EUR14.72 on Friday, following an upgrade in the bank's net interest income guidance. This increase came despite the bank's reported decline in earnings for Q3. The financial results, which exceeded both top and bottom line consensus expectations, were a significant factor in the share price increase.
In Q3, RBI recorded an earnings decline, with a reported net profit of 879 million euros ($933.6 million), a decrease from EUR1.09 billion the previous year. The bank's operating income also fell by 17% year-on-year, totaling EUR2.25 billion. Despite these declines, net interest income saw significant growth.
RBI reported a nine-month profit decrease, impacted by a fall in net fee and commission income to 2.364 billion euros from 2.682 billion euros in 2022, and an increase in administrative expenses to 2.874 billion euros from last year's 2.574 billion euros.
Consolidated profit fell to 2.114 billion euros from last year's 2.801 billion euros, pre-tax income dropped to 2.931 billion euros from the previous year's 3.044 billion euros, and the operating result declined to 4.030 billion euros from 2022's 4.275 billion euros.
Net trading income and fair value result also decreased to 205 million euros from last year's 471 million euros. However, net interest income rose significantly to 4.190 billion euros from last year's 3.591 billion euros.
For full-year 2023, excluding Russia and Belarus, RBI forecasts a net fee and commission income of between 2.9-3 billion euros, an annual net interest income of between 5.6-5.7 billion euros, and plans for the deconsolidation of Raiffeisenbank Russia.
InvestingPro Insights
In light of the recent performance of Raiffeisen Bank International (RBI), InvestingPro provides some valuable insights. According to InvestingPro's real-time data, RBI has a market cap of $5113.76M and a very attractive P/E ratio of 1.59. The revenue for the last twelve months as of Q2 2023 was $10379.75M, showing a substantial revenue growth of 48.25%.
InvestingPro Tips point out that RBI has high earnings quality, with free cash flow exceeding net income, a key indicator of financial health. The strong earnings should allow management to continue dividend payments, which is good news for investors. Another positive is that RBI is trading at a low Price/Book multiple, suggesting that the stock might be undervalued.
In total, InvestingPro provides more than ten additional tips for RBI, available through the InvestingPro platform, offering investors a comprehensive analysis of the company's financial health and market position.
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