RBI reported decent Q2 despite CHF provisioning

Summary: RBI’s reported PAT came in at EUR 715mn in Q2 despite CHF
provisioning, 3% ahead of the consensus. The quarter was driven by a slight
decrease in NII, which peaked in Q4/23, in our view, offset by the increase in
NFCI on higher deposits. Russia remained outstandingly strong despite
shrinking operations as it added alone EUR 379mn to the Group’s profit. RBI
lifted its NII guidance by EUR 100mn to EUR 4.1bn and lowered the guidance
for cost of risk to 35bps from 50bps on better market developments. The
outlook for loan growth was also lifted from the range of 3-4% to 4-5%.
According to the RBI’s own ‘Russia P/B zero deconsolidation scenario’,
CET1 is seen at 14.7% vs. 14.6% a quarter earlier. We also note that
Financial Times reported today that RBI warned over capital hit, but
conditions have eased despite this misleading headline suggesting. The
picture is much rosier, in our view. During the conf. call, the management
mentioned that RBI’s own simulation was run by a DPS of EUR 1.5, so we
reiterate our BUY recommendation and suggest our investors to buy any pull
back.