Morningstar | Raiffeisen Bank Continues Its Good Start of the Year in 2Q 2018; FVE Maintained
No-moat Raiffeisen Bank posted an 29% increase in its first-half 2018 net income, including a EUR 121 million expected loss from sale of Polish core banking operations. The main drivers were the first-quarter net release of loan losses, amounting to EUR 83 million, an 4% increase in net interest income, and an 3% increase in net fee and commission income. Net interest margin improvement in the first half by 5 basis points to 2.48% was mainly attributed to positive margin development in countries like Romania, the Czech Republic, and Ukraine. Noninterest expenses at EUR 1.5 billion, or 1% lower than first-half 2017, came in better than our expectations, which might be a sign the Austrian bank is getting closer to achieving its 55% cost/income ratio target by 2019. For now, we retain our EUR 33 fair value estimate and no-moat rating.During the quarter, the bank reported no impairment losses, whereas in the previous quarter, the release of loan losses amounted to EUR 83 million. The group corporates and markets segment net release in the quarter of EUR 52 million was offset by impairment losses in Russia, Poland, and Romania. The management is no longer guiding for loan total charges to be similar to 2017 levels of EUR 287 million and expects 2018 loan charges to be below the level of the previous year. The nonperforming loan ratio decreased to 4.8%, of which 78 basis points was organic and 14 basis points was due to Polish core banking operations pending sale, a trend that management expects to continue in the medium term.
Raiffeisen Bank International is a universal bank focusing on corporate and retail customers in Central and Eastern Europe (CEE) and on corporate customers in Austria. In CEE, Co. consists of a network of banks, leasing companies and financial service providers. In Austria, Co. is involved in corporate finance and export and trade finance banks. Co. provides services to customers in 2,800 branch offices. In the retail banking business, Co.'s product and service portfolio comprises inter alia credit services (mortgages, credit cards and personal loans), as well as payment transaction and current account package services. As of Dec 31 2014, Co.'s total assets amounted to Euro121.6 million
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.