Quarterly Report • Nov 24, 2011
Quarterly Report
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| Raiffeisen Bank International Group Monetary values in € million |
2011 | Change | 2010 |
|---|---|---|---|
| Income statement | 1/1-30/9 | 1/1-30/9 | |
| Net interest income | 2,724 | 0.6% | 2,707 |
| Net provisioning for impairment losses | (782) | (14.4)% | (913) |
| Net fee and commission income | 1,125 | 3.3% | 1,088 |
| Net trading income | 293 | 13.5% | 258 |
| General administrative expenses | (2,287) | 6.2% | (2,153) |
| Profit before tax | 1,032 | 3.5% | 997 |
| Profit after tax | 760 | (10.9)% | 853 |
| Consolidated profit | 745 | (4.8)% | 783 |
| Statement of financial position | 30/9 | 31/12 | |
| Loans and advances to banks | 28,376 | 31.8% | 21,532 |
| Loans and advances to customers | 81,321 | 7.5% | 75,657 |
| Deposits from banks | 37,607 | 11.7% | 33,659 |
| Deposits from customers | 68,936 | 19.6% | 57,633 |
| Equity | 10,348 | (0.5)% | 10,404 |
| Total assets | 148,368 | 13.1% | 131,173 |
| Key ratios | 1/1-30/9 | 1/1-30/9 | |
| Return on equity before tax | 13.6% | (0.5) PP | 14.1% |
| Return on equity after tax | 10.0% | (2.0) PP | 12.0% |
| Consolidated return on equity | 11.0% | (1.4) PP | 12.4% |
| Cost/income ratio | 55.8% | 2.6 PP | 53.2% |
| Return on assets before tax | 0.99% | 0.08 PP | 0.91% |
| Net interest margin | 2.61% | 0.13 PP | 2.48% |
| Net provisioning ratio (average risk-weighted assets, credit risk) | 1.36% | (0.31) PP | 1.67% |
| Bank-specific information1 | 30/9 | 31/12 | |
| Risk-weighted assets (credit risk) | 80,433 | 6.4% | 75,601 |
| Total own funds | 12,196 | (3.3)% | 12,608 |
| Total own funds requirement | 8,068 | 6.4% | 7,585 |
| Excess cover ratio | 51.2% | (15.1) PP | 66.2% |
| Core tier 1 ratio, total | 7.9% | (1.0) PP | 8.9% |
| Tier 1 ratio, credit risk | 10.9% | (1.2) PP | 12.2% |
| Tier 1 ratio, total | 8.7% | (1.0) PP | 9.7% |
| Own funds ratio | 12.1% | (1.2) PP | 13.3% |
| Stock data | 30/9 | 30/9 | |
| Earnings per share in € | 3.06 | (6.0)% | 3.25 |
| Price in € | 22.16 | (35.2)% | 34.20 |
| High (closing prices) in € | 45.10 | 5.5% | 42.75 |
| Low (closing prices) in € | 19.19 | (33.9)% | 29.01 |
| Number of shares in million | 195.51 | – | 195.51 |
| Market capitalization in € million | 4,331 | (35.2)% | 6,686 |
| Resources | 30/9 | 31/12 | |
| Number of employees as of reporting date | 60,247 | 0.8% | 59,782 |
| Business outlets | 2,933 | (0.9)% | 2,961 |
1 Calculated according to the Austrian Banking Act (Bankwesengesetz, BWG) for illustrative purposes. RBI as part of the RZB Group is not subject to the Austrian Banking Act.
| Overview of RBI | 3 |
|---|---|
| RBI in the capital markets | 4 |
| Group management report | 8 |
| General economic environment | 8 |
| Performance and financials | 11 |
| Comparison of results year-on-year | 14 |
| Comparison of results with the previous quarter | 19 |
| Statement of financial position | 22 |
| Risk management | 27 |
| Outlook | 31 |
| Segment reports | 33 |
| Division of the segments | 33 |
| Business divisions | 76 |
| Interim consolidated financial statements | 83 |
| Statement of comprehensive income | 83 |
| Profit development | 85 |
| Statement of financial position | 86 |
| Statement of changes in equity | 87 |
| Notes | 94 |
| Publication details/Disclaimer | 134 |
In this report RBI denotes the RBI Group. If RBI AG is used it denotes Raiffeisen Bank International AG. For reasons of transparency and comparison the figures for the first three quarters 2010 are comparable figures for the RBI structure after applying the merger retrospectiviely to 1 January 2010.
Adding and subtracting rounded amounts in tables and charts may lead to minor discrepancies. Changes in tables are not based on rounded amounts.
Raiffeisen Bank International (RBI) is active as a universal bank in 17 markets in Central and Eastern Europe (CEE) through a closely knit network of subsidiaries, leasing companies and specialist financial services providers. Approximately 57,000 staff in around 3,000 business outlets serve around 13.7 million customers in this region. In Austria RBI is one of the top corporate and investment banks. It is also the only Austrian bank to be represented not only in the world's financial centers, but also in the growth markets of Asia with its own branches and representative offices. In all, RBI has some 60,000 employees.
| In € million | Total assets | Change1 | Business outlets | Number of staff |
|---|---|---|---|---|
| Czech Republic | 8,988 | 13.7% | 128 | 3,171 |
| Hungary | 8,290 | (2.9)% | 144 | 3,188 |
| Poland | 7,234 | 4.4% | 116 | 3,149 |
| Slovakia | 9,453 | 5.4% | 156 | 3,807 |
| Slovenia | 1,668 | 3.6% | 17 | 342 |
| Reconciliation | (25) | 2.0% | – | – |
| CE segment | 35,608 | 5.0% | 561 | 13,657 |
| Albania | 2,156 | 7.3% | 104 | 1,378 |
| Bosnia and Herzegovina | 2,144 | 4.5% | 98 | 1,583 |
| Bulgaria | 3,705 | (2.2)% | 189 | 3,346 |
| Croatia | 5,490 | (6.3)% | 81 | 2,102 |
| Kosovo | 702 | 4.3% | 52 | 717 |
| Romania | 6,292 | 1.0% | 544 | 6.065 |
| Serbia | 2,214 | 4.0% | 85 | 1,772 |
| Reconciliation | (72) | 70.6% | – | – |
| SEE segment | 22,630 | (0.3)% | 1,153 | 16,963 |
| Russia segment | 13,975 | 12.3% | 192 | 8,697 |
| Belarus | 1,347 | (10.9)% | 96 | 2,234 |
| Kazakhstan | 72 | (3.1)% | 1 | 11 |
| Ukraine | 5,341 | (3.7)% | 917 | 15,528 |
| Reconciliation | (2) | – | – | – |
| CIS other segment | 6,758 | (5.2)% | 1,014 | 17,773 |
| Group corporates segment | 21,596 | (8.0)% | 8 | |
| Group markets segment | 28,565 | 5.0% | 4 | 3.1572 |
| Corporate center segment | 52,695 | 93.9% | 1 | |
| Reconciliation | (33,460) | 46.1% | – | – |
| Total | 148,368 | 13.1% | 2,933 | 60,247 |
The markets of RBI
1 Change of total assets versus figures 31 December 2010. Change expressed in local currencies varies due to fluctuation euro exchange rates.
2 Allocation of staff to Group corporates, Group markets and Corporate center is not possible.
The international capital markets were strongly affected by the European debt crisis in the period under review. Defensive asset classes such as gold emerged as the winners, while prices plummeted on the extremely volatile equity markets in the light of the threat of double-dip recessions in parts of Europe and the US. Within the eurozone, politicians were searching for a solution to the sovereign debt problems in Greece, Ireland, Italy, Portugal and Spain. Despite the European Central Bank buying up bonds in an attempt to prevent risk premiums for Spanish and Italian government bonds rising any further, the rating agencies dropped the rating of Italy and Spain once again.
This environment also generated unease in the banking sector, as reflected in the rating downgrades for Italian, Spanish and British banks. Moreover, a number of European banks had to post net book value write-offs.
Financial service providers in Hungary came under additional pressure when the Parliament in Budapest passed a law on foreign currency lending which allows private individuals to repay foreign currency mortgage loans early at an exchange rate well below the market rate. As a result banks will have to bear the entire shortfall against the current market rate. After Austria and Hungary introduced special bank levies back in 2010, the Slovakian Parliament also agreed to levy a similar charge on banks.
Price performance since 25 April 2005 compared with the ATX and EURO STOXX Banks
RBI shares did not remain unaffected by the generally tough environment. The highest closing price in the last quarter was € 37.00 on 1 July, with the lowest recorded on 23 September, at € 19.19. The fall mirrored the performance of other European bank stocks.
Shares closed at € 35.54 on 30 June and € 22.16 on 30 September, comprising a total decline of 37.7 per cent for the third quarter of 2011. The EURO STOXX Banks and the ATX lost 34.3 per cent and 29.6 per cent, respectively, over the same period. After 30 September, RBI share price continued to decline. On 21 November, the editorial deadline of this report, shares were trading at € 15.34. This means that the price has dropped 30.8 per cent between the start of the fourth quarter and the time of writing as a result of a generally very weak development of bank stocks.
Price performance since 1 January 2010 compared with the ATX and EURO STOXX Banks
In a telephone conference on 25 August, the Managing Board presented the 2011 semi-annual results and took questions from over 180 participants. At the end of the third quarter, the RBI Management undertook a two-week roadshow. To launch the event, RBI invited over 50 participants to an analyst lunch in Vienna on 15 September. The Managing Board then gave a series of presentations in London, Warsaw, Washington, D.C. and New York, providing a wide range of interested investors and analysts with a personal update on RBI and current developments. Further roadshows were undertaken in London, Milan and Paris.
RBI strives to keep market participants well-informed. In the interest of ongoing optimization of its communications, it has made teleconference presentations and other important events available as online webcasts since the beginning of 2010. These can be viewed at any time at www.rbinternational.com Investor Relations Reports & Presentations Presentations & Webcast.
RBI has been listed on the Vienna Stock Exchange since 25 April 2005 (until 12 October 2010 as Raiffeisen International). It is represented in several leading national and international indices, including the ATX and the EURO STOXX Banks. Raiffeisen Zentralbank Österreich AG (RZB) holds 78.5 per cent of RBI's shares, with the remaining shares in free float.
| Price as of 30 September 2011 | € 22.16 |
|---|---|
| High/low (closing prices) in third quarter 2011 | € 37.00 / € 19.19 |
| Earnings per share from 1 January to 30 September 2011 | € 3.06 |
| Market capitalization as of 30 September 2011 | € 4.331 billion |
| Avg. daily volume (single counting) in third quarter 2011 | 306,828 shares |
| Stock exchange trading (single counting) in third quarter 2011 | € 553 million |
| Free float as of 30 September 2011 | 21.5% |
| ISIN | AT0000606306 |
|---|---|
| Ticker symbols | RBI (Vienna Stock Exchange) |
| RBI AV (Bloomberg) | |
| RBIV.VI (Reuters) | |
| Market segment | Prime Market |
| Number of shares issued as of 30 September 2011 | 195,505,124 |
| Rating agency | Long-term rating |
Short-term rating |
Outlook Individual rating | |
|---|---|---|---|---|
| Moody's Investors Service | A1 | P-1 | stable | D+ |
| Standard & Poor's | A | A-1 | negative | n/a |
| Fitch Ratings | A | F1 | stable | bbb |
| 1 March 2012 | Start of quiet period |
|---|---|
| 29 March 2012 | 2011 annual report, analyst conference, conference call |
| 30 March 2012 | RBI Investor Presentation, London |
| 10 May 2012 | Start of quiet period |
| 24 May 2012 | First quarter report, conference call |
| 20 June 2012 | Annual General Meeting |
| 27 June 2012 | Ex-dividend date and dividend payment date |
| 15 August 2012 | Start of quiet period |
| 29 August 2012 | Semi-annual report, conference call |
| 14 November 2012 | Start of quiet period |
| 28 November 2012 | Third quarter report, conference call |
E-mail: [email protected] Internet: www.rbinternational.com Investor Relations Phone: +43-1-71707 2089 Fax: +43-1-71707 2138
Raiffeisen Bank International AG Group Investor Relations Am Stadtpark 9 1030 Vienna Austria
Although performance varied considerably across the individual regions in Central and Eastern Europe (CEE) in 2010 and Southeastern Europe (SEE) stayed in recession, in 2011 all regions are expected to record positive economic growth. According to expectations, in 2011 total growth in CEE will be around 1.9 percentage points above the eurozone and is likely to be around 2 percentage points above the eurozone level for the next few years.
The Central European region (the Czech Republic, Hungary, Poland, Slovakia and Slovenia), having recovered from the crisis in 2010, posted total growth of 3.0 per cent. Slovakia and Poland were the top performers, advancing 4.0 and 3.8 per cent respectively. Whereas growth in Hungary and Slovenia was considerably more muted at 1.3 per cent and 1.2 per cent respectively. Exports, particularly those going to the eurozone, were the key growth driver. In contrast, domestic demand has done little to boost growth so far. The region is set to maintain largely robust growth of 3.0 per cent for 2011. In the eurozone, however, an economic slowdown has already begun, which is likely to cause growth to flatten off in Central Europe during 2012.
The economies in Southeastern Europe (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Romania and Serbia) performed at very different rates: In the second quarter of 2011, Romania and Serbia saw a further slight slowdown, while Bulgaria and Croatia rallied somewhat, following a slump in Croatian economic growth in the first quarter. Economic growth in Southeastern Europe declined 0.8 per cent in 2010, but is expected to be 2.0 per cent in the year under review. However, cautious lending policies, high levels of unemployment and meager wage growth have curbed private consumption. The sovereign debt crisis has still not yet been resolved, which is depressing the investment climate. As the Southeastern Europe region has very close trading links with the countries of the eurozone, the anticipated recession in peripheral European countries will have a knock-on effect. As a result only a weak GDP growth of 0.4 per cent is forecasted for 2012.
High oil and commodity prices boosted growth in the CIS region (Belarus, Russia and Ukraine). Although growth significantly outperformed the CEE region as a whole in 2010 (4.1 per cent) and is expected to amount to 3.9 per cent in 2011, there is no avoiding the fact that the CIS region has not been able to match the 7.2 per cent average annualized growth recorded in the boom years of 2000 to 2007 and will probably not be able to repeat these growth rates in the coming years. In terms of countries, Russia is particularly sensitive to the price of oil. Even after support for domestic consumption prior to the presidential elections, the Russian economy is expected to grow by just 3.2 per cent in 2012. In Ukraine the revival of the IMF's aid program, suspended in spring 2011, is of major significance. An agreement with the IMF would allay investors' concerns and therefore make it easier to finance the budget deficit. If the ratio of imports to exports worsens or the turbulence in the capital markets intensifies, it would be difficult to keep the Ukrainian hryvnia pegged to the US dollar. Belarus will still be dealing with the consequences of the currency and liquidity crisis in 2012. In 2011, the Belarusian rouble was devalued by two-thirds and prices doubled. The government now needs to tackle concerns about devaluation and inflation. Additionally, a marked economic slowdown, if not a recession, is expected in 2012. It seems unlikely that the IMF will approve a loan, but Russia will probably provide at least some limited financial assistance.
| Country | 2010 | 2011e | 2012f | 2013f | |
|---|---|---|---|---|---|
| CE | Czech Republic | 2.2 | 1.9 | (1.2) | 1.2 |
| Hungary | 1.3 | 1.5 | (2.0) | 1.5 | |
| Poland | 3.8 | 3.9 | 2.2 | 3.3 | |
| Slovakia | 4.0 | 3.3 | (0.5) | 2.5 | |
| Slovenia | 1.2 | 1.2 | (1.5) | 1.5 | |
| CE | 3.0 | 3.0 | 0.5 | 2.4 | |
| SEE | Albania | 3.9 | 3.0 | 2.5 | 3.5 |
| Bosnia and Herzegovina | 0.7 | 1.9 | 0.0 | 2.0 | |
| Bulgaria | 0.2 | 2.0 | 1.2 | 2.5 | |
| Croatia | (1.2) | 0.5 | (1.0) | 1.5 | |
| Kosovo | 4.0 | 4.0 | 3.0 | 4.0 | |
| Romania | (1.9) | 2.5 | 0.5 | 2.5 | |
| Serbia | 1.0 | 2.0 | 1.0 | 2.0 | |
| SEE | (0.8) | 2.0 | 0.4 | 2.3 | |
| CIS | Belarus | 7.6 | 6.0 | 0.0 | 3.0 |
| Russia | 4.0 | 3.8 | 3.2 | 4.0 | |
| Ukraine | 4.2 | 4.7 | 3.5 | 4.0 | |
| CIS | 4.1 | 3.9 | 3.1 | 4.0 | |
| CEE | 3.2 | 3.4 | 2.0 | 3.3 | |
| Austria | 2.3 | 3.2 | (0.5) | 1.5 | |
| Germany | 3.6 | 2.9 | (0.8) | 1.4 | |
| Eurozone | 1.7 | 1.5 | (1.0) | 1.1 |
Annual real GDP growth in per cent compared to the previous year
In most CEE markets, the uptrend in non-performing loans eased considerably in 2011. The CEE banking sector, however, is currently in a period of upheaval due to the continued high rate of loan defaults, growing local refinancing requirements and tougher regulatory requirements. Before the crisis (2005 to 2008), bank assets advanced rapidly year after year, but in 2009, 2010 and 2011, most CEE banking markets either stagnated or slightly declined. Banks have been very cautious when it comes to lending, especially consumer loans. Nevertheless, banking sector growth is expected to pick up in the long term, particularly as the large CEE banking markets (like the Czech Republic, Poland, Russia and Slovakia) still show considerable potential for lending and banking services. That said, growth rates will no longer match boom levels. This is, however, good news for sustainable performance in the medium to long term as it lessens the chances of the banking sector overheating once again.
The comparable figures used in this report for the first three quarters of 2010 and for the reporting date, 30 September 2010, are the figures for the RBI structure after applying the merger of Raiffeisen International and the principal business areas of RZB retrospectively to 1 January 2010.
RBI's performance in the third quarter of 2011 was marked by two key elements. Firstly, earnings were hit by concerns about the finance sector in relation to the sovereign debt crisis in some eurozone countries, which resulted in wider credit spreads. Secondly, the prospects in Hungary deteriorated, due both to political measures (legislation on early repayment of foreign currency mortgage loans at fixed rates) and to a further decline in loan portfolio quality among the Hungarian Group units. The decline was triggered by a combination of high levels of debt among Hungarian local municipalities and the general economic environment in Hungary.
The sovereign debt crisis increased volatility on the financial markets and generated valuation losses on financial investments (minus € 146 million) and, on the other hand, gains on derivatives used for hedging purposes (€ 149 million). The changed situation in Hungary necessitated a considerable increase in impairment losses for loans and advances for this country in the third quarter, amounting to € 258 million. The rise in general administrative expenses and the bank levies in Austria and Hungary also had a negative impact on profit. Taxes in the period under review were disproportionately high, partly due to deferred tax expenses in Hungary.
Despite stable net interest income and a positive trend in net trading as well as fee and commission income, the operating result for the first nine months of 2011 fell by 4 per cent or € 84 million to € 1,813 million. Reasons for the decrease were the 6 per cent rise in general administrative expenses (particularly as a result of salary adjustments in several markets) and the bank levies in Austria and Hungary totaling € 95 million (previous year's comparable period: € 31 million).
Overall decline in net provisioning for impairment losses – negatively impacted by Hungary Although most markets saw a sharp decrease in net provisioning for impairment losses as the market environment improved, in Hungary provisioning had to be doubled year-on-year to € 373 million. Nevertheless, provisioning declined by 14 per cent to € 782 million across the Group. The segments Russia (down 75 per cent), CIS other (down 56 per cent) and Group corporates (down 49 per cent) improved considerably. The decline was mainly a result of the improved environment for corporate customers: in the Corporate customers division, net provisioning dropped 24 per cent to € 309 million. Due to the aforementioned problems in Hungary, provisioning for retail customers fell only 2 per cent to € 489 million.
While growth in non-performing loans slowed down over the last quarters, the level of non-performing loans remained largely unchanged compared to the year-end figure with an increase of € 31 million to € 6,821 million, also due to currency effects. In terms of segments, Russia (down 19 per cent) and Group corporates (down 16 per cent) recorded decreases, whereas Southeastern Europe and Central Europe saw non-performing loans increase by 18 per cent and 3 per cent respectively. While gains in Serbia and Croatia were triggered by a few individual cases involving large customers, in the Czech Republic mainly retail customers were responsible for the increase.
The non-performing loan ratio (ratio of non-performing loans to total customer loans) fell by 0.6 percentage points compared with the year-end of 2010, to 8.4 per cent. The coverage ratio (ratio of impairment losses to NPLs) rose further by 4.2 percentage points to 70.5 per cent.
Despite a weaker third quarter, profit before tax advanced 4 per cent or € 35 million year-on-year, to reach € 1,032 million at the end of the nine-month period. The reduced profitability in the third quarter was due to higher provisioning for impairment losses in Hungary and to market-related valuation losses on securities.
Income taxes rose by € 128 million to € 272 million. This increase was primarily driven by higher earnings in the Group units, but deferred tax expenses on valuation gains increased as well. Only a small proportion of deferred tax assets could be recognized to offset the losses in Hungary.
As a result of the losses in Hungary, profit attributable to non-controlling interests decreased by 80 per cent to € 14 million. Non-controlling interests make up around 30 per cent of the Hungarian Group units, putting the loss attributable to these interests at € 98 million. Therefore, the consolidated profit for the first nine months of 2011 came to € 745 million, a decline of 5 per cent or € 38 million yearon-year. Earnings per share amounted to € 3.06, compared with € 3.25 for the same period in 2010.
The return on equity before tax for the first nine months of 2011 remained almost unchanged year-onyear at 13.6 per cent (down 0.5 percentage points). Average equity underlying the return on equity calculation rose by 7 per cent as a result of the addition of retained earnings to € 10.1 billion.
Total assets grew 13 per cent or € 17.2 billion to € 148.4 billion in the first nine months of the year, although currency effects reduced total assets by around 1 per cent. The growth in assets reflected higher short-term loans to banks, partly as a result of repo transactions, leading to an increase of € 6.8 billion in loans and advances to banks. Loans and advances to customers after impairment losses rose by € 5.4 billion, driven largely by loans to large customers and repo transactions with nonbanks. On the liabilities side, the increase was due mainly to two balance sheet items. Deposits from customers advanced by € 11.3 billion, primarily coming from institutional and corporate customers (€ 9.4 billion) and to a lesser extent from retail customers (€ 1.9 billion). The loan/deposit ratio (loans and advances to customers divided by customer deposits) improved by 13 percentage points compared with the end of 2010 to 118 per cent. Deposits from banks rose by € 3.9 billion due to shortterm deposits while debt securities issued decreased by € 1.4 billion as a result of the redemption of several issues, particularly a € 1.5 billion state-guaranteed bond issued in 2009.
Equity including non-controlling interests was down 1 per cent or € 56 million, compared with the beginning of the year, to € 10,348 million. An increase of € 760 million due to profit after tax was offset by a decrease of € 463 million for dividend payments for the financial year 2010 and other comprehensive income of minus € 379 million. Other comprehensive income was impacted by a negative currency difference of € 335 million linked to the devaluations in Russia, Belarus and Poland. The derecognition of the net valuations on a cash flow hedge required when these hedging activities ceased also generated a loss of € 36 million (after adjustments for deferred tax).
Five subsidiaries were deconsolidated in the reporting period due to non-materiality. However, the data remains comparable between the two periods since these changes did not have a material effect on any of the items in the income statement. The average exchange rates used in the income statement developed as follows: the Czech koruna appreciated by 4 per cent and the Hungarian forint by 1 per cent. By contrast, the Belarusian rouble lost 32 per cent, the Ukrainian hryvnia 6 per cent, and the Albanian lek, the Russian rouble and the Croatian kuna all dropped 2 per cent. The US dollar lost 6 per cent year-on-year.
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 | Change absolute |
Change in % |
|---|---|---|---|---|
| Net interest income | 2,724 | 2,707 | 16 | 0.6% |
| Net fee and commission income | 1,125 | 1,088 | 36 | 3.3% |
| Net trading income | 293 | 258 | 35 | 13.5% |
| Other net operating income | (42) | (5) | (37) | >500.0% |
| Operating income | 4,099 | 4,049 | 50 | 1.2% |
| Staff expenses | (1,141) | (1,057) | (84) | 7.9% |
| Other administrative expenses | (884) | (853) | (31) | 3.7% |
| Depreciation | (262) | (243) | (19) | 7.9% |
| General administrative expenses | (2,287) | (2,153) | (134) | 6.2% |
Net interest income advanced by 1 per cent or € 16 million to € 2,724 million in the first nine months of 2011, compared to the same period in 2010, and constituted again the largest contributor to operating income at 67 per cent.
The main driver of this development was the net interest margin (the ratio of net interest income to average total assets), which rose by 13 basis points to 2.61 per cent. Interest margins rose in all segments with the exception of CIS other. In Ukraine, net interest income was reduced by the decrease in the volume of lending to customers and the depreciation of the currency. In Russia, the net interest margin improved by 30 basis points, driven by new business and more favorable refinancing conditions. Higher volumes also increased net interest income in Russia. Loans and advances to customers rose year-on-year by 9 per cent or € 5,664 million across the Group to € 81,321 million.
Net fee and commission income improved by 3 per cent or € 36 million over the prior year period to € 1,125 million. The largest contribution came from net income from the payment transfer business amounting to € 453 million, up € 14 million year-on-year. The decisive elements here were changes to card fees in the Czech Republic. Net income from the loan and guarantee business also grew, rising by 7 per cent or € 15 million to € 221 million. At € 242 million, net income from the foreign currency, notes/coins and precious-metals business remained stable compared with the same period in 2010. The main contributors in this regard were Poland, Hungary and Russia. Net income from the securities business fell by 2 per cent or € 2 million to € 93 million, while net income from the management of investment and pension funds rose by 5 per cent. Net income from agency services for own and thirdparty products remained unchanged. In contrast, net income from the credit derivatives business fell by € 3 million, as declining volumes meant lower portfolio commissions.
Net trading income improved by 14 per cent or € 35 million year-on-year to € 293 million. Net income from currency-based transactions doubled to € 163 million. The steepest rise in net income was recorded by the CIS other segment, which posted a € 31 million increase, most of which stemmed from Belarus. This reflected € 30 million in valuation gains arising from a strategic currency position taken in part to hedge equity and was caused by the sharp devaluation of the Belarusian rouble. Net income from currency-based transactions also advanced € 34 million due to valuation gains arising from currency swaps in Russia. Net income from interest-based transactions fell by € 80 million. In particular in Russia it was down by € 54 million on the previous year's comparable
period, which had been unusually strong as a result of recoveries on interest-rate products. Net income from valuation gains on interest rate swaps was down year-on-year due to flattening of the interest curve in the Group markets and Corporate center segments.
Other net operating income decreased from minus € 5 million as of 30 September 2010, to minus € 42 million in the reporting period, a development mainly caused by the bank levy introduced in Austria in 2011 (€ 62 million). Moreover, there was also a goodwill impairment totaling € 3 million for the Hungarian Raiffeisen Bank Zrt. Net income from investment property including operating leasing (real estate) gained € 9 million year-on-year, mainly as a result of new leasing contracts in Croatia and a new Group unit in Russia. Net income from non-banking activities made a positive contribution to results, rising by € 9 million to € 31 million. Expenses for allocations to provisions for litigation were down by € 6 million compared to the same period in 2010 to € 1 million.
General administrative expenses rose by 6 per cent or € 134 million compared with the same period in 2010 to € 2,287 million. As a result, the cost/income ratio increased by 2.6 percentage points to 55.8 per cent.
Structure of general administrative expenses
Staff expenses, which were the largest item in general administrative expenses, accounting for 50 per cent, rose by 8 per cent or € 84 million year-onyear. This increase was mainly due to marketinduced salary adjustments and bonus payments in certain markets, but also to changes in social security laws in Russia and Slovakia, whereas in the Czech Republic, Romania and Ukraine, the reason can be found in the rise in the number of staff. The increase in staff expenses in the Czech Republic was largely due to the expansion of the branch network and investments in higher-value bank advisory services. The average number of staff amounted to 60,006, a rise of 963 persons compared with the first nine months of 2010.
Other administrative expenses rose by 4 per cent or € 31 million on the previous year's comparable period. The largest increases were in advertising, PR and promotional expenses (plus 18 per cent), deposit insurance fees (plus 16 per cent) and IT expenses (plus 13 per cent). By contrast, legal, advisory and consulting expenses fell by 10 per cent (€ 8 million), after significantly higher expenses had been incurred in the previous year in connection with the merger of Raiffeisen International with the principal business areas of RZB. The number of business outlets as of 30 September 2011 was 2,933, a decrease of 31 compared to the prior-year period. The largest reductions were in Ukraine (minus 16), Serbia (minus 13), Russia (minus 10) and Poland (minus 9). By contrast, there were increases in the Czech Republic (plus 18) and Romania (plus 2).
Depreciation and amortization of tangible and intangible fixed assets rose by 8 per cent or € 19 million compared with the prior-year period to € 262 million. The amortization of intangible assets saw the most pronounced increase, namely up € 15 million to € 104 million. This was partly linked to the installation of new software, which led to a shortening of the useful lives of the systems they were replacing, but was also driven by new software projects in Ukraine, Romania and Austria.
| 1/1-30/9/2011 | 1/1-30/9/2010 | Change | Change in % | |
|---|---|---|---|---|
| In € million | absolute | |||
| Operating result | 1,813 | 1,897 | (84) | (4.4)% |
| Net provisioning for impairment losses | (782) | (913) | 132 | (14.4)% |
| Other results | 1 | 14 | (13) | (94.6)% |
| Profit before tax | 1,032 | 997 | 35 | 3.5% |
| Income taxes | (272) | (144) | (128) | 88.6% |
| Profit after tax | 760 | 853 | (93) | (10.9)% |
| Profit attributable to non-controlling interests | (14) | (70) | 55 | (79.5)% |
| Consolidated profit | 745 | 783 | (38) | (4.8)% |
The net provisioning for impairment losses for the first nine months of 2011 amounted to € 782 million. This represents a decline of 14 per cent or € 132 million from the level in the first nine months of 2010 (€ 913 million). The decrease mainly reflects the economic recovery in most markets, leading to an improvement in credit standing and thus to a lower increase in non-performing loans. Moreover, active measures, such as loan restructuring where necessary, had already been undertaken by RBI during the financial and economic crisis to stabilize and improve the quality of the loan portfolio. The changed situation in Hungary introduced considerable pressure in the third quarter, necessitating further substantial provisioning for impairment losses. This was up € 247 million year-on-year, including € 52 million relating to the law approved by the Hungarian Parliament on the possibility of early repayment of foreign currency mortgage loans at preferential rates (with the shortfall to be made up by the banks). This corresponds to an assumed early repayment rate of around 15 per cent.
Of the overall net provisioning for impairment losses, € 687 million were accounted for by individual loan loss provisions, representing a year-on-year fall of € 248 million. The volume of provisioning for corporate customers decreased significantly, although portfolio-based loan loss provisions in Hungary added € 119 million, mainly in relation to retail customers. € 6 million were released from loan terminations and sales.
The improved provisioning requirements were reflected in the net provisioning ratio (the ratio of net provisioning for impairment losses to average credit risk-weighted assets), which declined by 31 basis points year-on-year to 1.36 per cent. The ratio at 31 December 2010 stood at 1.66 per cent.
Non-performing loans as of 30 September amounted to € 6,821 million. Including currency movements, this was € 31 million higher than the figure as of 31 December 2010. The NPL ratio, the ratio of non-performing loans to total loans and advances to customers, improved by 0.6 percentage points to 8.4 per cent, due to higher volumes. Non-performing loans were matched by impairment losses for loans and advances amounting to € 4,811 million. This resulted in a coverage ratio of 70.5 per cent, an improvement of 4.2 percentage points on the year-end 2010.
Other results dropped € 13 million year-on-year to € 1 million in the first nine months of 2011. This item consists of net income from derivatives and designated liabilities, net income from financial investments and net income from disposal of group assets. Net income from derivatives and designated liabilities rose by € 276 million to € 149 million, mainly due to the revaluation gains arising from derivatives used by Group headquarters for hedging purposes.
Net income from financial investments turned from € 136 million at the end of the third quarter of 2010 to minus € 146 million as of 30 September 2011. This decrease was mainly triggered by a net loss from the revaluation and disposal of securities reported at fair value in the wake of the upheavals on the bond markets, particularly in the third quarter. The item was also depressed by a € 59 million write-off against an equity participation linked to a loan commitment which had a corresponding release of provisions for impairment losses.
Net income from the disposal of group assets – five subsidiaries ceased to be consolidated for immateriality reasons – amounted to minus € 3 million in the third quarter of 2011. In the same period in 2010, the deconsolidation of 47 subsidiaries caused by a change in the materiality thresholds generated net income of € 5 million.
Tax expenses amounted to € 272 million during the reporting period, compared with € 144 million in the first three quarters of 2010. The tax rate was 26 per cent (compared to 15 per cent in the previous year). This increase is mainly due to deferred tax expenses which amounted to € 27 million in the third quarter, compared with a deferred tax income of € 76 million in the previous year. Deferred taxes are used to offset differences between IFRS and tax accounts. In the first nine months of 2010, deferred tax income was recognized on valuation differences of derivatives and own issues, while in the first three quarters of 2011 a deferred tax expense was recognized on valuation gains, primarily from liabilities measured at fair value. The losses in Hungary also had a negative impact on the tax rate, as only part of the losses could be offset by deferred tax assets. The rise in current tax expense was driven by higher income in Poland and Russia and by tax payments in Austria resulting from previous periods.
| In € million | Q3/2011 | Q2/2011 | Change absolute |
Change in % |
|---|---|---|---|---|
| Net interest income | 943 | 897 | 46 | 5.1% |
| Net fee and commission income | 388 | 380 | 8 | 2.1% |
| Net trading income | 37 | 133 | (96) | (72.3)% |
| Other net operating income | (15) | (3) | (13) | 493.3% |
| Operating income | 1,352 | 1,407 | (55) | (3.9)% |
| Staff expenses | (385) | (376) | (9) | 2.3% |
| Other administrative expenses | (298) | (300) | 2 | (0.7)% |
| Depreciation | (90) | (86) | (5) | 5.4% |
| General administrative expenses | (772) | (761) | (11) | 1.5% |
Quarter-on-quarter, net interest income increased by 5 per cent or € 46 million, mainly due to higher volumes. Across the Group, the interest margin rose by 5 basis points to 2.64 per cent. The strongest growth was recorded by the Russia, CIS other and Group corporates segments. In Russia and CIS other, net interest income was boosted by sizable increases in the corporate customer portfolios. Growth within the Group corporates segment was the result of expanding business activities as well as of improved margins following the sale of credit financing to RZB in 2010. The improvement in net interest income is based on higher average total assets, mainly due to an increase in customer business and repo transactions.
Net fee and commission income rose by 2 per cent or € 8 million compared to the prior quarter. Net income from the payment transfer business improved by € 6 million, as a result of an increase in the number of transactions, and in the Czech Republic due to larger volumes and an adaptation of the pricing policy. In addition, income from the foreign currency, notes/coins and precious-metals business rose by € 10 million.
Net trading income fell by 72 per cent or € 96 million to € 37 million mainly as a result of the € 63 million drop in net income from currency-based transactions. In Belarus, net trading income was down € 30 million after exceptional second-quarter figures which were linked to valuation gains arising from a strategic currency position taken to partially hedge equity. Net trading income also declined in Russia and Hungary. Group markets posted a € 20 million drop in net income from equityand index-based transactions, primarily due to valuation losses.
Other net operating income amounted to minus € 15 million in the third quarter, compared to minus € 3 million in the previous quarter. This negative development was mainly a result of a combination of lower net income from non-banking activities, the loss arising from the disposal of tangible and intangible fixed assets in Russia and a € 3 million goodwill impairment for Raiffeisen Bank Zrt. in Hungary.
General administrative expenses rose by € 11 million in the third quarter to € 772 million. Staff expenses saw the most marked growth (up € 8 million to € 385 million) due to higher accruals for bonus payments in Central Europe. Other administrative expenses remained virtually unchanged in the third quarter, at € 298 million compared with € 300 million in the previous quarter. Depreciation of tangible and intangible fixed assets rose by € 5 million to € 90 million, largely because of an impairment associated with a software project in Russia.
| In € million | Q3/2011 | Q2/2011 | Change absolute |
Change in % |
|---|---|---|---|---|
| Operating result | 579 | 646 | (66) | (10.3)% |
| Net provisioning for impairment losses | (377) | (197) | (180) | 91.4% |
| Other results | (49) | 25 | (74) | – |
| Profit before tax | 153 | 474 | (320) | (67.6)% |
| Income taxes | (71) | (101) | 31 | (30.1)% |
| Profit after tax | 82 | 372 | (290) | (77.8)% |
| Profit attributable to non-controlling interests | 48 | (27) | 75 | – |
| Consolidated profit | 130 | 345 | (215) | (62.3)% |
Non-performing loans remained virtually unchanged since beginning of the year, with a slight organic increase more than offset by currency effects. Overall, however, the individual markets served by RBI performed at very different rates. The third quarter saw a currency-adjusted increase of the nonperforming loans of € 122 million. Increases were recorded primarily in Hungary, the Czech Republic, Poland and Croatia, while non-performing loans in Austria and Russia remained on a downward trend. In 2011, improved repayment ratios, due to more favourable economic conditions in many markets, contributed to an overall lower requirement for provisioning. The special situation in Hungary prompted sizable increases in impairment losses on loans and advances in the third quarter. Net provisioning for impairment losses rose by € 180 million to € 377 million, including € 258 million for Hungary alone. Overall, improved repayment ratios due to the more favorable economic environment in many markets resulted in a lower requirement of provisioning for impairment losses. Individual loan loss provisioning increased by 19 per cent or € 40 million quarter-on-quarter, whereas, again due to the situation in Hungary, portfolio-based loan loss provisions rose by € 140 million in the third quarter following net releases of € 16 million in the second quarter.
Other results fell by € 74 million quarter-on-quarter to minus € 49 million. Net income from derivatives and designated liabilities rose by € 71 million to € 108 million as a result of valuation gains on banking book derivatives at Group headquarters.
Net income from financial investments dropped by € 145 million compared to the second quarter to minus € 158 million as a result of lower net income from the revaluation and disposal of securities reported at fair value and of the decline in net valuations of equity participations.
RBI reported tax expenses of € 71 million in the third quarter compared to € 101 million in the second quarter. The decreased expenses are the result of lower quarterly earnings, particularly in Hungary, in combination with provisions for taxes made in Austria during the second quarter of 2011. The tax rate in the third quarter of 2011 stood at 46 per cent compared with 21 per cent in the second quarter of 2011.
Consolidated profit fell by 62 per cent quarter-on-quarter to € 130 million. This figure was mainly linked to losses in Hungary, which resulted in a change in profit attributable to non-controlling interests from minus € 27 million to a profit of € 48 million. Losses of € 93 million in Hungary were attributable to the 30 per cent share of non-controlling interests.
As of 30 September 2011, total assets at RBI amounted to € 148.4 billion, up 13 per cent or € 17.2 billion compared to year-end 2010. The increase in total assets was caused by growth in loans to banks and loans to customers. Total trading assets and liabilities also rose as a result of the higher valuations of derivative transactions. The increase in total liabilities came mainly from deposits from customers as well as from deposits from banks.
The closing rates forming the basis of the balance sheet have not developed uniformly since the start of the year: The Belarusian rouble (down 48 per cent), Polish zloty (down 10 per cent), Russian rouble (down 6 per cent), Hungarian forint (down 5 per cent) and Ukrainian hryvnia (down 3 per cent) all devalued. By contrast, the Serbian dinar appreciated by 4 per cent and the Czech koruna by 1 per cent. Overall, currency effects reduced total assets by around 1 per cent.
Assets are dominated by loans and advances to customers, making up 52 per cent of total assets. Loans and advances before provisioning were up 8 per cent or € 5.7 billion compared to the end of 2010. Most of the increase was linked to loans to corporate customers, which rose by € 5.5 billion to € 58.6 billion, driven mainly by new business in Austria and Russia. The volume of loans to retail customers increased by € 0.3 billion to reach € 21.4 billion. The various markets performed at different rates: while there were gains in Russia and Slovakia there were declines in Belarus (linked to the currency devaluation), Ukraine and Hungary.
The significant increase in deposits improved the loan/deposit ratio, which went down by 13 percentage points from the end of 2010 to 118 per cent. The impairment losses on loans and advances rose marginally to € 5.0 billion and related mainly to loans to customers.
Loans and advances to banks grew by € 6.8 billion or 32 per cent to € 28.4 billion. The rise was largely generated by investing short-term liquidity in commercial bank deposits, partly through repo transactions. Especially the Group headquarters in Austria (up € 3.8 billion, including repo transactions totalling € 2.8 billion), Russia, the Czech Republic and Singapore posted higher total loans and advances.
Since the end of 2010, financial investments decreased by € 0.8 billion or 4 per cent to € 18.8 billion. Austria and Slovakia in particular recorded the maturing of financial investments in the held-tomaturity category. Russia, Croatia and Poland reduced the volume of securities held on a short-term basis and recognized at fair value. Trading assets increased by € 3.0 billion as a result of valuation gains on derivatives.
The remaining asset items, comprising cash reserve, tangible and intangible fixed assets, derivatives and the items posted as other assets, rose from € 11.0 billion to € 13.8 billion. This increase was mainly generated by the cash reserve, which was raised to € 2.8 billion for liquidity reasons.
Breakdown of equity and liabilities on the balance
Customer deposits increased by 20 per cent or € 11.3 billion since the end of 2010 and, as such, grew more strongly than loans and advances to customers. Customer deposits amounted to € 68.9 billion, € 39.0 billion of which was attributable to corporate customers, which were responsible for a € 9.6 billion rise in deposits. Around € 3.5 billion of this was a result of repo transactions. Retail deposits gained € 1.9 billion to reach € 27.7 billion. The new direct bank, ZUNO, contributed just under € 0.6 billion from its activities in the Czech Republic and Slovakia. Russia and Poland also recorded significant increases.
The refinancing volume via banks amounted to € 37.6 billion. This represents an increase of € 3.9 billion or 12 per cent compared to the end of 2010. Most of the rise stemmed from deposits from commercial banks.
Other liabilities, including debt securities issued, provisions for liabilities and charges, trading liabilities, derivatives and the item other liabilities amounted to € 27.4 billion. Debt securities issued fell by € 1.4 billion to € 15.2 billion. In May 2011 the first of three state-guaranteed bonds issued in 2009 in an amount of € 1.5 billion matured.
Despite the difficult market conditions, RBI was in a position to seize funding opportunities on the international capital markets. In January and March, RBI issued two unsecured benchmark bonds worth € 1 billion each. In May, RBI also became the first Austrian bank to place a 10-year subordinated bond worth € 0.5 billion this year. The bond replaced a bond issue worth € 366 million that had been called. The funding requirement for the year 2011 is fully covered.
In order to diversify the funding structure, RBI is actively working to develop structured refinancing solutions that will use own assets to generate long-term funding. Mobilizing assets is set to be a priority in future.
Maturity profile of the debt securities issued
Compared to year-end 2010, the bank's balance sheet equity (consisting of the consolidated equity, consolidated net profit and non-controlling interests) fell by 1 per cent or € 56 million to € 10,348 million.
Consolidated equity, consisting of subscribed capital, participation capital, capital reserves and retained earnings, increased by € 300 million to € 8,550 million. The increase in retained earnings was mainly determined by the transfer of earnings from 2010 which amounted to € 683 million. On the other hand, other comprehensive income caused a reduction of consolidated equity of € 356 million. At minus € 312 million, the key component here was exchange differences (including capital hedging). Following a change in hedging strategy, cash flow hedging ended in the second quarter of 2011 and was replaced by portfolio hedging. Valuation losses on the terminated cash flow hedges amounted to € 36 million (after taking deferred taxes into account).
RBI AG's Annual General Meeting approved the payment of a dividend of € 1.05 per share in June 2011, which involved a distribution totaling € 204 million. A dividend on the participation capital amounting to € 200 million was also distributed. Consolidated profit amounted to € 745 million.
Non-controlling interests increased to € 1,052 million due to the rise in net profit and capital increases. In addition, dividends amounting to € 58 million were distributed to non-controlling interests.
RBI does not form a credit institution group on its own according to the Austrian Banking Act (BWG) and is therefore not subject to regulatory provisions on a consolidated basis, as it is part of the RZB credit institution group. The following consolidated figures have been determined according to the provisions of the BWG and are assumed in the calculation of the RZB credit institution group.
Consolidated own funds pursuant to BWG fell from yearend 2010 by € 412 million to € 12,196 million as of 30 September 2011. This does not include profit from the
current reporting period, as this is not permitted to be included in calculations during the financial year due to legal regulations in force in Austria.
Core capital (tier 1) fell by € 400 million to € 8,806 million at the end of September 2011. This was primarily due to currency devaluations, particularly of the Belarusian and Russian rouble, Polish zloty and Ukrainian hryvnia, as well as dividend distributions to non-controlling interests.
Additional own funds (tier 2) fell by € 106 million to € 3,260 million as a result of maturing tier 2 issues at Group headquarters and in Hungary, Serbia and the Czech Republic. In May 2011, RBI AG issued a new subordinated bond of € 500 million maturing in 2021, to replace an issue that had been called.
The eligible additional own funds (tier 3) increased by € 111 million to € 180 million as a result of tier 2 issues approaching maturity.
There was an increase in the own funds requirement of € 483 million to € 8,068 million. The own funds requirement for credit risk, which rose by € 387 million to € 6,435 million, accounted for 80 per cent of this. The requirement calculated under the standard approach rose by € 247 million, primarily due to volume increases in Russia, while the credit risk requirement based on internal ratings increased by € 140 million, mainly at the Group headquarters. The requirement for market risk increased by € 50 million to € 377 million and the requirement for open currency positions rose by € 83 million to € 469 million. The requirement for operational risk decreased by € 37 million to € 788 million.
As a result, the excess cover for own funds fell by € 895 million to € 4,128 million, resulting in an excess cover ratio of 51.2 per cent.
The tier 1 ratio (total risk) fell by 1.0 percentage points to 8.7 per cent, and the core tier 1 ratio by 1.0 percentage points to 7.9 per cent. The own funds ratio was also down, falling by 1.2 percentage points to 12.1 per cent.
Active risk management represents a core competence for RBI. In order to recognize, assess and manage risks effectively, the Group has developed a comprehensive program of risk management and controlling. This is an integral component of managing the bank as a whole and is being constantly refined. RBI's risk management is oriented towards ensuring that credit and country risks, market and liquidity risks and risks arising from holdings and operational risks are dealt with conscientiously and managed professionally.
To actively manage the loan portfolios, internal Credit Portfolio Committees were set up in 2009. Their purpose is to direct the respective credit risk policies and credit portfolio strategies for various groups of customers. Lending guidelines and limits for the loan portfolio are defined on the basis of analyses by internal research departments and portfolio management. In the course of the quarterly committee meeting the loan portfolio strategies for the period under review were adjusted to reflect the changes in the market outlook. The result is lower limits for loan portfolios in specific countries and sectors as well as a change in lending policies.
Risk management continued to focus on managing non-performing loans during the period under review. Measures and objectives concentrated on improving early recognition of potential troubled loans, reporting on the progress in restructuring management at Group level and a rapid and efficient reduction in the portfolio of non-performing loans.
During the third quarter, uncertainties about the debt rescheduling measures required by peripheral European countries with high levels of debt (Greece, Ireland, Italy, Portugal and Spain) generated tension on the interbank market, which financial institutions use to balance their liquidity. This had little impact on RBI because of its strong liquidity position. RBI uses a long-established and proven limit model to manage liquidity risk. Based on contractual and historical cash inflows and outflows, the model requires sizable excess liquidity for short-term maturities. For medium and long-term maturities limits are also in place which in turn reduce the effect of a possible increase in refinancing cost on the result of RBI.
Further measures to reduce liquidity and transfer risks remain the focus of risk management. For instance, in the first quarter of 2011, RBI rolled out a new Funds Transfer Pricing (FTP) model, which undergoes ongoing review. The purpose of the FTP model is to determine internal netting rates of interest between groups of customers and the bank's Treasury in order to correctly calculate the profitability of loan and deposit business, as well as proprietary business. It also influences the pricing of loans to customers by ensuring that the bank's liquidity costs are correctly passed on to the cost center responsible for them.
RBI's exposure vis-ŕ-vis the peripheral European countries is limited due to the low volume of direct credit exposure. Nevertheless, the macroeconomic development of these countries, as well as all other countries that might be indirectly affected, is being continuously monitored. During the first quarter of 2011, a range of initiatives were implemented with the aim of lessening the potential effects of one or more stress scenarios. For instance, the outstanding direct and indirect loans in these countries were reduced significantly. The internal limits for transactions with financial institutions in these countries were also lowered, both for medium-term loan business and for short-term secured refinancing (repo business). The direct effects of potential negative scenarios on the portfolio and the profitability of RBI, as well as possible indirect effects are analyzed in the course of regular risk analyses and stress tests.
| Corporate exposure | FI exposure | Sovereigns exposure |
Total | Total | Change | ||||
|---|---|---|---|---|---|---|---|---|---|
| In € million | BB | TB | BB | TB | BB | TB | 30/9/2011 | 31/12/2010 | YTD |
| Greece | 30 | – | 51 | – | – | – | 81 | 115 | (29)% |
| Ireland | 2 | 10 | 10 | 38 | – | – | 59 | 127 | (53)% |
| Italy | 275 | 26 | 860 | 49 | 315 | 119 | 1,644 | 1,939 | (15)% |
| Portugal | – | – | 134 | – | 2 | – | 136 | 184 | (26)% |
| Spain | 63 | 46 | 707 | 48 | 3 | – | 867 | 1,050 | (18)% |
| Total | 371 | 81 | 1,761 | 135 | 321 | 119 | 2,788 | 3,415 | (18)% |
BB = Banking book, TB = Trading book
Both the economic and political climate in Hungary constituted a particular challenge for risk management. The Hungarian economy is growing at a slower pace than the other CEE countries. Raiffeisen Research expects that real GDP will decline by around 2.0 per cent in 2012. Consequently, a further increase in the number of non-performing loans in Hungary is anticipated: As of 30 September 2011, the NPL ratio was 19.7 per cent. Credit risk management uses an early warning system designed to minimize potential losses by identifying possible credit standing downgrades and actively reducing the credit exposure and increasing collateral for customers with weak credit standing.
In the first three quarters of 2011, provisions for loan losses amounting to € 373 million were made for Hungary, € 289 million of which consisted of individual loan loss provisions and € 84 million of general loan loss provisions. This increased the coverage ratio to around 67 per cent.
In addition to existing legal restrictions for banks, such as restrictions on the foreclosure of properties, a law was passed by the Hungarian Parliament on 20 September 2011, which allows private individuals to repay foreign currency mortgage loans in Swiss francs, euros and Japanese yen early at fixed exchange rates. The fixed exchange rates are HUF 180 to CHF 1, HUF 250 to € 1 and HUF 200 to JPY 100. In comparison, the exchange rates as at 30 September 2011 were HUF 240.4 (CHF), HUF 292.6 (€) and HUF 281.9 (JPY 100). The exchange rates as of 30 September 2011 were approximately 25 per cent below the fixed exchange rate for Swiss francs, around 15 per cent lower in the case of the euro and around 29 per cent lower for Japanese yen. The legislation applies to bank customers who took out foreign currency mortgage loans when the exchange rates were below the fixed
rates. Customers have until 30 December 2011 to give notice that they intend to fully repay the loans, after which payment has to be effected within 60 days.
The following table shows the volume of foreign currency mortgage loans of retail customers in Hungary:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share |
|---|---|---|---|---|
| Euro | 35 | 2.5% | 38 | 2.6% |
| Swiss franc | 1,386 | 97.5% | 1,429 | 97.4% |
| Other foreign currencies | 0 | <0.1% | 0 | <0.1% |
| Total | 1,421 | 100.0% | 1,468 | 100.0% |
As of 30 September 2011, provisions made in case of premature loan repayment according to legal regulations amounted to € 52 million, equating to a repayment rate of around 15 per cent. Based on the assumption that around 30 per cent of the volume of foreign currency loans will be repaid on the basis of the new legislation, RBI expects that for 2011 the requirement for related loan loss provisions will amount to a total of around € 100 million.
Throughout the Group, great importance is attached to the application and widespread implementation of advanced approaches under Basel II. RBI uses the parameters and results determined for these approaches for internal management information purposes and control measures.
To determine the capital requirements for credit risk under Basel II, RBI mainly uses the internal ratingsbased (IRB) approach. In recent years, regulatory authorities approved the use of the IRB approach by RBI AG and several of its network banks for calculating the credit risk of corporate customers, banks and sovereigns. Within the retail area, this method is being used in both Slovakia and Hungary. It is planned to gradually introduce the use of the IRB approach in other countries and for other classes of receivables.
| Credit risk | Market risk | Operational | ||
|---|---|---|---|---|
| Unit | Non-Retail | Retail | risk | |
| Raiffeisen Bank International AG, Wien (Austria) | IRB1 | n.a. | Internal model2 | STA3 |
| RBI Finance (USA) LLC, New York (USA) | IRB | STA | STA | STA |
| Raiffeisenbank a.s., Prag (Czech Republic) | IRB | STA | STA | STA |
| Raiffeisen Bank Zrt., Budapest (Hungary) | IRB | IRB | STA | STA |
| Raiffeisen Malta Bank plc., Sliema (Malta) | IRB | STA | STA | STA |
| Tatra banka a.s., Bratislava (Slovakia) | IRB | IRB | STA | STA |
| Raiffeisen Bank S.A., Bukarest (Rumania) | IRB | STA | STA | STA |
| Raiffeisenbank Austria d.d., Zagreb (Croatia) | IRB | STA | STA | STA |
| All other units | STA | STA | STA | STA |
IRB = internal ratings-based approach
2 Only for risk of open foreign-exchange positions and general interest-rate risk on trading book
3 STA = standard approach
The own funds requirement under Basel II for RBI AG's market risk in the trading book and foreign currency risks is determined by using an internal value-at-risk (VaR) model. The standard approach is used for all other units and the consolidated foreign currency position. To measure and limit the interest rate risk in the banking book, for regulatory reasons a change in the present value of the banking book is simulated based on the assumption of a simultaneous increase in interest rates for all maturities and all currencies. Key assumptions are made in accordance with regulatory provisions and based on internal statistics and figures gained through experience.
RBI's liquidity position is subject to a regular monitoring process and is included in the RZB Group's declaration in its weekly reports to the Austrian banking supervisory authority. This regulatory report presents details of the expected cash inflows and outflows and the additional realizable liquidity for various maturities and currencies.
The standard approach is currently being used to calculate capital requirements for operational risk under Basel II. This applies to all the main Group units.
Based on current economic developments, especially in CEE, we are aiming for a return on equity before tax of around 15 per cent in the medium term, with the inclusion of the acquisition of Polbank. This is excluding future acquisitions, any capital increases, as well as unexpected regulatory requirements from today's perspective.
In 2011, we expect to see an increased growth in customer lending volumes relative to the previous year (2010: 4.3 per cent). In terms of regions, we are seeking the highest absolute growth in lending to customers in CEE.
From the customer standpoint, we plan to retain our Corporate customers division as the backbone of our business and in the medium term to expand the proportion of business volume accounted for by our Retail customers division. Following the successful conclusion of the acquisition of Polbank, the Central European segment will continue to gain importance in terms of customer lending volumes.
Against the backdrop of the further strengthening of our capital structure and preparation for the changing regulatory requirements, we are evaluating measures to strengthen our capital ratios. Depending on market developments, a capital increase may be a possible option.
Due to current developments in the economic and political environment, it is not possible to accurately predict whether we have reached the peak as far as non-performing loans are concerned. However, forecasts of a further slowdown in the economy lead us to expect a slight increase in the net provisioning ratio, although we do not foresee a significant rise in non-performing loan volumes.
The bank levies in Austria and Hungary will lead to an anticipated reduction in our 2011 result of some € 126 million (approximately € 82 million for Austria and € 44 million for Hungary). The levies in these countries are expected to have a similar impact in 2012 as well. In addition, Slovakia will also be introducing a bank levy from 2012 onwards, which is forecast to reduce our result by a further € 20 million.
The funding requirement for 2011 is fully covered.
Goodwill values will be appraised as part of the annual medium-term planning process. An impairment of goodwill on the investment in the bank in Ukraine (current goodwill: € 215 million) cannot be ruled out in view of current economic developments at the present time. The result of the medium-term planning process could also have an impact on the valuation of deferred tax assets (tax loss carryforwards recognized). Neither of these potential outcomes would affect our regulatory capital ratios.
In several countries (Bosnia and Herzegovina, Croatia, Czech Republic, Hungary, Kosovo, Romania, Serbia, Slovenia, Ukraine and Austria) cost-cutting measures were undertaken and already implemented in parts.
The number of Group outlets is to remain fairly stable in 2011, although there may continue to be some optimization of our network in some countries.
In order to strengthen the financial system, European banks are required to meet an increased core tier 1 capital ratio, as defined by the European Banking Authority (EBA), of 9 per cent by 30 June 2012.
This resulted in an additional capital requirement of € 1.9 billion for the RZB Group as of the second quarter of 2011, and as of the end of the third quarter a requirement of around € 2.5 billion is expected. RBI was not addressed in the EBA analysis, as RZB is the superordinated credit institution. RBI would have a lower shortfall under the EBA requirements. RZB will take necessary measures to comply with the new requirements without resorting to state funds.
A joint RZB/RBI project covering approximately 20 work streams in three main areas yielding between € 2.5 billion and € 3.6 billion (all data capital equivalent) was established. In detail this includes:
Around 80 per cent of the measures for achieving the target ratio are not connected to the reduction of business activities.
Internal management reporting at RBI is based on the current organizational structure. This is formed in a matrix structure which means that each member of the Management Board is responsible both for individual countries and specific business activities (country and functional responsibility model). Within the Group, a cash generating unit is either a country or a business activity. The RBI management bodies – the Management Board and Supervisory Board – take decisions that determine the resources allocated to each segment in accordance with its financial strength and profitability. Consequently, the reporting criteria are an essential component in the decision-making process. The segments are also defined in accordance with IFRS 8.
In Central and Eastern Europe (CEE) geographical aspects are used to define segments, with each Group unit being allocated to a segment in accordance with its location. Countries that are expected to achieve comparable long-term economic performance and that have similar economic profiles are grouped together in regional segments. Business outside CEE that has recently been added as a result of the merger with the principal business areas of RZB is defined by business activities. The segments therefore correspond to the Group's organizational structure reflected in the internal management reports and are in line with the management approach required under IFRS 8.
In order to achieve maximum transparency and in consideration of the thresholds required under IFRS 8, seven segments are defined, which ensure clear reporting. The thresholds established under IFRS 8 lie at 10 per cent of the key figures operating income, profit after tax and segment assets.
The Group comprises the following segments:
This segment comprises the Czech Republic, Hungary, Poland, Slovakia and Slovenia. These constitute the most mature banking markets in the CEE region and are also the markets in which RBI has been operating longest. In Poland, Raiffeisen Bank Polska S.A. provides services to corporate customers and small and medium-sized entities, as well as a growing number of affluent retail customers. Tatra banka a.s. in Slovakia is primarily involved in corporate and retail activities, but also has a strong emphasis on affluent retail customers. In Slovenia, the Group is represented by Raiffeisen Banka d.d. This bank concentrates in particular on business with local corporate customers. The Czech Raiffeisenbank a.s. provides traditional banking services together with building society and insurance products in its local market. Raiffeisen Bank Zrt. has an extensive branch network in Hungary which serves retail customers, small and medium-sized entities and a large number of corporate customers. RBI also has a presence in Slovakia and the Czech Republic through ZUNO BANK AG, a direct bank. Separate own leasing companies also operate in each country.
The Southeastern Europe segment comprises Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Romania and Serbia. The Albanian Raiffeisen Bank Sh.a. provides financial services across all business activities. Raiffeisen Leasing Sh.a. completes the product offering. Raiffeisen Bank Kosovo J.S.C. and Raiffeisen Leasing LLC Kosovo represent RBI in Kosovo and offer a comprehensive product range. In Bosnia and Herzegovina, Raiffeisen Bank d.d. Bosna i Hercegovina and Raiffeisen Leasing d.o.o. Sarajevo focus on small and medium-sized entities but also have a broad range of products for retail customers. In Bulgaria, the Group is represented by Raiffeisenbank (Bulgaria) EAD and Raiffeisen Leasing Bulgaria OOD. The Croatian Raiffeisenbank Austria d.d. specializes in large and mediumsized corporate customers and also has a substantial retail business. RBI also operates Raiffeisen Leasing d.o.o., capital management companies and an asset management company in Croatia.
Raiffeisen Bank S.A. has an extensive branch network in Romania offering high-quality financial services. The finance leasing business is operated by Raiffeisen Leasing IFN S.A. The Moldovan market is serviced from Romania with a tailored selection of products for corporate customers. RBI has a presence in the Serbian market in the form of Raiffeisen banka a.d., Raiffeisen Leasing d.o.o., two pension funds and an asset management company.
ZAO Raiffeisenbank is one of the leading foreign banks in Russia and specializes in corporate and retail customers. The nationwide network of business outlets also offers products tailored for affluent retail customers. The product range in Russia is completed by OOO Raiffeisen Leasing.
This segment comprises Belarus, Kazakhstan and Ukraine. The Group is represented by Priorbank JSC and JLLC Raiffeisen-Leasing in Belarus. In Kazakhstan, RBI is represented by Raiffeisen Leasing Kazakhstan LLP, and in Ukraine, Raiffeisen Bank Aval JSC and LLC Raiffeisen Leasing Aval provide a full range of financial services and products via an extensive network of business outlets. In addition, as a specialized service provider, the Ukrainian Processing Center PJSC conducts a large proportion of the card business within the segment.
The Group corporates segment covers Austrian and international (mainly Western European) corporate customers managed by RBI AG in Vienna within the Corporate customers profit center. These customers include Austria's largest companies, most of whom have an excellent credit standing. The segment also shows the results generated by large corporate business with Central and Eastern European customers (excluding Austrian multinational customers) in the Network corporate customers & support profit center. The Corporate customers and Network corporate customers & support profit centers also include net income from structured trade financing for commodity traders, documentary businesses, project financing and a range of cofinancing solutions. The corporate customer business of the branches in Singapore, China and Malaysia is also allocated to the Group corporates segment, as are operations involving international customers of the Maltese subsidiary, RB International Finance (USA) and RB International Finance (Hong Kong), all of which provide a selection of products for niche market customers.
The Group markets segment covers capital market customers and proprietary trading. The results show income from trading in currencies, interest rates, securities and structured products for financial institutions as well as income from proprietary trading. Proprietary trading and market-making activities are allocated to the following profit centers: Capital markets, Credit investments (non-core strategic proprietary trading in securities) plus the profit centers in the Singapore, China and London branches. Net income from transactions for customers is included in the profit centers Financial institutions & sovereigns and Raiffeisen financial institutions clients (operations involving Raiffeisen Landesbanks and other financial service companies of Raiffeisen Banking Group Austria). The profit centers post net income from sales of all banking products and from business relationships with banks, institutional customers, governments and local authorities. Raiffeisen Centrobank, where securities trading and capital market
financing constitute the core business, is also part of this segment. Its subsidiary Raiffeisen Investment AG includes the Mergers & Acquisitions business, which is operated via locations in a number of different countries. Commodity trading is undertaken by Centrotrade AG branches around the world and by F.J. Elsner & Co. in Austria. The segment also includes private banking in Austria, reporting results from Kathrein & Co. Privatgeschäftsbank, which advises on investing private and foundation assets, as well as on inheritance issues.
The Corporate center segment encompasses all the services provided by Group headquarters for various parts of the Group which serve the implementation of the Group's overall strategy and are allocated to this segment in order to preserve comparability. Liquidity management and balance sheet structure management linked to proprietary trading are included in this segment and reported in the Treasury profit center.
Net income from the equity investment portfolio, especially from subsidiaries in CEE, and net income from banking operations carried out by Group headquarters and the Maltese subsidiary in relation to funding for Group units is also reported in this segment. Net income from the Special customers profit center – customers for whom members of the Managing Board are directly responsible – is also posted under this segment, as is income from the Austrian transaction services business operated by Raiffeisen Data Service Center GmbH, which offers a wide selection of order processing products and services for financial services providers.
Net income from companies operated for the purpose of equity management, from the holding company and from all other companies that do not fall directly under another segment is also included in this segment.
The comparable figures used in this segment report are the comparable figures for the RBI structure after applying the merger retroactively to 1 January 2010.
RBI continued its growth in the first three quarters of 2011, albeit at a slower pace than in the first half of the year. Profit before tax rose by 4 per cent to € 1,032 million year-on-year. On the one hand, this increase resulted from a slight rise in operating income and on the other hand, lower net provisioning for impairment losses had a significant positive impact on profit. The 6 per cent rise in general administrative expenses largely reflected the active support of business growth with a focus on enhancing cost efficiency and was only partly compensated by the rise in operating income. The cost/income ratio therefore increased to 55.8 per cent. Not all of the regional and functional segments were able to increase their results. An economic recovery did come through in some countries, but some of the European emerging markets were unable to escape the current economic downturn in the more developed countries.
In Central Europe profit before tax fell by € 181 million to € 13 million. An increase in net provisioning for impairment losses in Hungary was one of the main reasons for this decline. Balance sheet assets rose by 6 per cent compared with a year ago.
In the period under review, Southeastern Europe reported profit before tax of € 260 million, a decline of 1 per cent. This stable result reflected lower operating income and a decline in net provisioning for impairment losses. The balance sheet assets in this segment rose by 1 per cent compared with the previous year.
Russia recorded the third-largest profit before tax of any segment at € 287 million, an increase of 56 per cent year-on-year. This growth resulted from a substantial decline in net provisioning for impairment losses and a rise in operating income. Balance sheet assets in this segment were up 16 per cent year-on--year.
In the CIS other segment profit before tax rose to € 142 million as a result of a decline in net provisioning for impairment losses and an increase in net trading income. The balance sheet assets in the segment fell by 1 per cent, largely due to a reduction in lending volumes and exchange rate effects.
The Group corporates segment saw a 29 per cent rise in profit before tax to € 308 million during the reporting period. This increase was due to a rise in operating income and lower net provisioning for impairment losses compared with the previous year. The segment's balance sheet assets fell by 8 per cent year-on-year, partly due to the transfer of the financing for the Austrian Raiffeisen Leasing Group to RZB.
Profit before tax in the Group markets segment fell by 34 per cent to € 102 million compared with the previous year. A decline in other results, mainly due to valuation losses on derivatives held for hedging purposes, was responsible for this fall. Balance sheet assets fell by 23 per cent year-on-year due to a reclassification of parts of the assets to the Corporate center segment as well as a reduction of credit business with Financial institutions.
In the Corporate center segment profit before tax rose by 132 per cent to € 324 million, largely driven by valuation gains on derivatives. Balance sheet assets in this segment were up 30 per cent compared with the previous year's period.
A breakdown of group assets by segment shows the following changes over the period under review. The share of Central Europe rose by 1 percentage point to 19 per cent, while Southeastern Europe remained unchanged at 12 per cent. The share of Russia also increased by 1 percentage point to 8 per cent, while the CIS other segment continued unchanged at 4 per cent. The share of Group corporates fell by 1 percentage point to 12 per cent, while Group markets dropped by 6 percentage points year-on-year to 16 per cent. This decrease partly benefited the share of Corporate center, which amounted to 29 per cent at the end of the period under review (up 5 percentage points).
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 848 | 814 | 4.1% | 279 | 282 | (1.0)% |
| Net fee and commission income | 368 | 345 | 6.7% | 125 | 124 | 0.5% |
| Net trading income | 30 | 15 | 102.3% | 5 | 14 | (66.2)% |
| Other net operating income | (29) | (44) | (35.1)% | (12) | (11) | 5.4% |
| Operating income | 1,218 | 1,130 | 7.8% | 396 | 408 | (2.9)% |
| General administrative expenses | (708) | (637) | 11.2% | (238) | (234) | 1.8% |
| Operating result | 509 | 493 | 3.4% | 158 | 175 | (9.2)% |
| Net provisioning for impairment losses | (484) | (305) | 58.6% | (307) | (98) | 212.1% |
| Other results | (12) | 6 | – | (2) | (8) | (80.4)% |
| Profit/loss before tax | 13 | 194 | (93.3)% | (150) | 68 | – |
| Income taxes | (55) | (44) | 24.4% | (19) | (17) | 10.7% |
| Profit/loss after tax | (42) | 150 | – | (169) | 51 | – |
| Profit attributable to non-controlling | ||||||
| interests | 6 | (43) | – | 50 | (15) | – |
| Profit/loss after non-controlling | ||||||
| interests | (36) | 106 | – | (119) | 36 | – |
| Share of profit before tax | 0.9% | 15.7% | (14.8) PP | (21.9)% | 6.6% | (28.5) PP |
| Risk-weighted assets (credit risk) | 23,862 | 22,482 | 6.1% | 23,862 | 23,736 | 0.5% |
| Total own funds requirement | 2,153 | 2,056 | 4.7% | 2,153 | 2,177 | (1.1)% |
| Assets | 35,608 | 33,471 | 6.4% | 35,608 | 35,541 | 0.2% |
| Liabilities | 30,736 | 7.0% | 32,884 | 32,652 | 0.7% | |
| Net interest margin | 3.24% | 3.23% | 0.02 PP | 3.14% | 3.23% | (0.09) PP |
| NPL ratio | 9.1% | 8.0% | 1.1 PP | 9.1% | 8.7% | 0.4 PP |
| Coverage ratio | 63.3% | 56.5% | 6.9 PP | 63.3% | 58.7% | 4.6 PP |
| Cost/income ratio | 58.2% | 56.4% | 1.8 PP | 60.0% | 57.3% | 2.7 PP |
| Net provisioning ratio (average risk weighted assets, credit risk) |
2.76% | 1.87% | 0.88 PP | 5.16% | 1.68% | 3.48 PP |
| Average equity | 2,774 | 2,594 | 7.0% | 2,774 | 2,881 | (3.7)% |
| Return on equity before tax | 0.6% | 10.0% | (9.3) PP | – | 9.4% | – |
| Business outlets | 561 | 551 | 1.8% | 561 | 556 | 0.9% |
In Central Europe, profit before tax amounted to € 13 million in the reporting period, down € 181 million compared with the prior-year period. A significant growth in operating income by 8 per cent (which was, however, accompanied by a rise in general administrative expenses) and a sharp
increase in provisioning in Hungary were largely responsible for this result. Return on equity before tax fell from 10 per cent to 0.6 per cent.
Net interest income in this segment rose by 4 per cent to € 848 million, with Poland and Slovakia recording the largest increases. In Poland the increase derived largely from higher net interest income from the leasing business and a rise in interest income from securities, as the investments of excess liquidity carried out a year ago proved successful. In Slovakia the increase largely reflected a rise in income from the loan portfolio due to higher lending volumes across all asset classes, with growth driven primarily by a significant advance in mortgage lending. In the Czech Republic net interest income also rose considerably due to an increase in lending volumes, particularly with large corporate customers, in spite of a slowdown in growth and a contraction in domestic demand due to the fiscal austerity packages implemented in 2010 and 2011. The continued difficult credit environment in Hungary led to a decline in lending volumes and therefore also to a decrease in net interest income. The segment's net interest margin remained almost unchanged at 3.24 per cent, balance sheet assets rose by 6 per cent year-on-year to € 35.6 billion and credit risk-weighted assets rose by 6 per cent from € 22.5 billion to € 23.9 billion. The rise in credit risk-weighted assets mainly reflected an increase in lending volumes in the segment.
Net fee and commission income grew in every country in the region except Hungary, rising by 7 per cent or € 23 million to € 368 million. Payment transfer business accounted for € 146 million of this figure, a gain of 10 per cent year-on-year. This rise was largely due to the higher number of transactions, and in the Czech Republic also to successfully implemented price adjustments. Net income from the loan and guarantee business grew by 15 per cent year-on-year to € 55 million. This increase was primarily generated in Poland by significant growth in business activity and, in particular, through income from project financing. Net income from currency, notes/coins and precious-metals business remained unchanged at € 110 million in spite of a decline in customer margins from the foreign exchange business with a simultaneous reduction in the number of transactions in Hungary.
Net trading income in the Central Europe region doubled to € 30 million compared with the same period of the previous year. Net income from currency-based transactions rose by € 2 million to € 25 million, primarily due to the valuation of open currency positions and revaluation gains on various foreign currency instruments in the Czech Republic. Net income from interest-based transactions turned from a loss of € 12 million to a profit of € 5 million year-on-year. This development was primarily due to revaluation gains on interest rate swap transactions in Slovakia and the Czech Republic.
Other net operating income in the region improved over the period under review from minus € 44 million to minus € 29 million – due for the most part to higher net income from non-banking activities and an increase in net income from the operating leasing business in the Czech Republic. This figure includes a € 33 million bank levy in Hungary.
General administrative expenses in this segment advanced by 11 per cent or € 71 million to € 708 million year-on-year. This increase was essentially due to a rise in staff expenses and other administrative expenses. The rise in staff expenses was caused by an expansion in marketing channels with a consequent increase in staffing needs in the Czech Republic and by higher salary and social security expenses in Slovakia. In addition, the expanded business activities of the direct bank ZUNO in the Czech Republic and Slovakia led to a doubling of general administrative expenses to
€ 24 million. The increase in other administrative expenses was largely due to the opening of new branches and the creation of new customer areas (so-called affluent corners) in existing branches of the subsidiary in the Czech Republic. Depreciation, amortization and write-offs rose year-on-year in several countries in the region, due to the depreciation of various IT systems following the implementation of a new core bank system, higher branch costs and increased depreciation of assets in the operating leasing business. The number of business outlets increased year-on-year by 10 to 561. The cost/income ratio in the region rose by 1.8 percentage points to 58.2 per cent.
In spite of a decrease in net provisioning in several countries in the region, overall net provisioning for impairment losses in Central Europe rose by 59 per cent or € 179 million to € 484 million. The main reason for this increase was Hungary, where the political and economic situation demanded the recognition of additional collective loan loss provisions because of the introduction of a law permitting the early repayment of foreign currency mortgage loans at an exchange rate well below the market rate. This provisioning recognizes the possible losses arising from such repayments and the deterioration in credit quality. As a result, net allocations to individual loan loss provisions increased year-on-year by 18 per cent to € 385 million. Collateral was also revalued resulting in a negative impact on net provisioning due to market-induced weak domestic demand. In Slovenia higher net provisioning for impairment losses was also required due to an individual troubled loan. In the case of portfolio-based loan loss provisions there was a net allocation of € 101 million in the region, an increase of € 123 million on the prior-year period. This largely related to loans to private customers in Hungary. In Slovakia and the Czech Republic, however, there were considerably lower net allocations to portfolio-based loan loss provisions, which reflected the improved quality of the loan portfolio in these countries. The proportion of non-performing loans in the loan portfolio in the Central Europe segment was 9.1 per cent at the end of the reporting period.
Other results in the Central Europe segment fell by € 19 million to minus € 12 million. Net income from derivatives turned around year-on-year from minus € 11 million to € 5 million. This improvement came predominantly from revaluation gains on various hedging transactions in the Czech Republic which had been entered into to adjust the foreign currency structure. As the interest rate level fell only marginally in the period under review, no further valuation losses were incurred. In the prior-year period valuation losses had been recorded due to a sharp drop in the yield curve. The net income from financial investments turned around year-on-year from plus € 16 million to a loss of € 17 million. Valuation losses were recorded in all countries in the region; in Hungary the loss on the revaluation of municipal bonds was particularly significant as a result of the general increase in risk aversion and the resultant rise in yields. Income taxes climbed by 24 per cent year-on-year to € 55 million. Profit after non-controlling interests amounted to minus € 36 million.
Below please find the detailed results of the individual countries in the segment:
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 214 | 209 | 2.4% | 70 | 71 | (1.5)% |
| Net fee and commission income | 95 | 79 | 21.0% | 33 | 33 | 0.8% |
| Net trading income | 4 | (4) | – | 0 | 2 | – |
| Other net operating income | 2 | 2 | 17.2% | 0 | 2 | – |
| Operating income | 316 | 285 | 10.6% | 103 | 107 | (4.5)% |
| General administrative expenses | (182) | (146) | 24.2% | (64) | (59) | 7.0% |
| Operating result | 134 | 139 | (3.6)% | 39 | 48 | (18.6)% |
| Net provisioning for impairment losses | (57) | (78) | (26.8)% | (25) | (17) | 47.8% |
| Other results | 13 | 0 | >500.0% | 11 | 1 | >500.0% |
| Profit before tax | 89 | 61 | 46.9% | 25 | 32 | (22.8)% |
| Income taxes | (20) | (12) | 65.1% | (6) | (7) | (19.6)% |
| Profit after tax | 69 | 49 | 42.4% | 19 | 25 | (23.7)% |
| Profit attributable to non-controlling interests |
(38) | (27) | 39.4% | (11) | (13) | (15.8)% |
| Profit after non-controlling interests | 31 | 22 | 46.1% | 8 | 12 | (32.3)% |
| Assets | 8,988 | 7,988 | 12.5% | 8,988 | 8,714 | 3.1% |
| Loans and advances to customers | 6,799 | 6,464 | 5.2% | 6,799 | 6,919 | (1.7)% |
| hereof corporate % | 43.3% | 42.4% | 0.9 PP | 43.3% | 43.4% | (0.1) PP |
| hereof retail % | 56.6% | 57.3% | (0.7) PP | 56.6% | 56.5% | 0.1 PP |
| hereof foreign currency % | 6.6% | 7.6% | (0.9) PP | 6.6% | 7.0% | (0.3) PP |
| Deposits from customers | 6,004 | 5,079 | 18.2% | 6,004 | 5,576 | 7.7% |
| Loan/deposit ratio | 113.2% | 127.3% | (14.0) PP | 113.2% | 124.1% | (10.8) PP |
| Return on equity before tax | 20.7% | 15.7% | 5.0 PP | 16.9% | 21.8% | (4.9) PP |
| Return on equity after tax | 16.1% | 12.6% | 3.5 PP | 13.0% | 16.9% | (4.0) PP |
| Cost/income ratio | 57.6% | 51.3% | 6.3 PP | 61.9% | 55.3% | 6.6 PP |
| Number of employees as of reporting | ||||||
| date | 3,171 | 2,765 | 14.7% | 3,171 | 3,092 | 2.6% |
| Business outlets | 128 | 109 | 17.4% | 128 | 121 | 5.8% |
| Number of customers | 435,751 | 427,438 | 1.9% | 435,751 | 433,505 | 0.5% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 236 | 247 | (4.2)% | 76 | 76 | (0.1)% |
| Net fee and commission income | 68 | 75 | (8.9)% | 23 | 22 | 4.6% |
| Net trading income | 10 | 16 | (37.7)% | (2) | 9 | – |
| Other net operating income | (50) | (39) | 27.1% | (18) | (16) | 8.2% |
| Operating income | 264 | 298 | (11.4)% | 79 | 91 | (12.6)% |
| General administrative expenses | (165) | (174) | (5.0)% | (57) | (51) | 11.1% |
| Operating result | 100 | 125 | (20.3)% | 23 | 40 | (43.0)% |
| Net provisioning for impairment losses | (373) | (127) | 194.6% | (258) | (68) | 279.2% |
| Other results | (25) | (3) | >500.0% | (13) | (9) | 47.2% |
| Loss before tax | (299) | (5) | >500.0% | (248) | (37) | >500.0% |
| Income taxes | 13 | 1 | >500.0% | 3 | 7 | (47.6)% |
| Loss after tax | (286) | (4) | >500.0% | (245) | (31) | >500.0% |
| Profit attributable to non-controlling interests |
98 | 5 | >500.0% | 93 | 4 | >500.0% |
| Profit/loss after non-controlling | ||||||
| interests | (189) | 1 | – | (152) | (27) | 466.6% |
| Assets | 8,290 | 8,623 | (3.9)% | 8,290 | 8,857 | (6.4)% |
| Loans and advances to customers | 5,919 | 6,355 | (6.9)% | 5,919 | 6,185 | (4.3)% |
| hereof corporate % | 51.9% | 52.6% | (0.7) PP | 51.9% | 51.1% | 0.8 PP |
| hereof retail % | 45.0% | 44.3% | 0.7 PP | 45.0% | 45.5% | (0.5) PP |
| hereof foreign currency % | 71.3% | 72.8% | (1.5) PP | 71.3% | 68.3% | 3.0 PP |
| Deposits from customers | 4,883 | 4,986 | (2.1)% | 4,883 | 5,176 | (5.7)% |
| Loan/deposit ratio | 121.2% | 127.5% | (6.3) PP | 121.2% | 119.5% | 1.7 PP |
| Return on equity before tax | – | – | – | – | – | – |
| Return on equity after tax | – | – | – | – | – | – |
| Cost/income ratio | 62.4% | 58.2% | 4.2 PP | 71.5% | 56.2% | 15.2 PP |
| Number of employees as of reporting date |
3,188 | 3,242 | (1.7)% | 3,188 | 3,230 | (1.3)% |
| Business outlets | 144 | 144 | – | 144 | 144 | – |
| Number of customers | 646,256 | 642,976 | 0.5% | 646,256 | 645,761 | 0.1% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 147 | 129 | 14.4% | 49 | 49 | 0.4% |
| Net fee and commission income | 102 | 95 | 7.4% | 34 | 34 | (2.0)% |
| Net trading income | 17 | 14 | 22.1% | 7 | 5 | 40.3% |
| Other net operating income | 11 | 3 | 238.3% | 1 | 1 | (20.0)% |
| Operating income | 278 | 241 | 15.2% | 91 | 90 | 1.3% |
| General administrative expenses | (151) | (133) | 13.4% | (51) | (51) | 0.6% |
| Operating result | 127 | 108 | 17.4% | 40 | 39 | 2.2% |
| Net provisioning for impairment losses | (36) | (52) | (30.6)% | (13) | (9) | 44.8% |
| Other results | 0 | 3 | (98.7)% | 0 | 0 | – |
| Profit before tax | 91 | 60 | 52.2% | 26 | 30 | (12.1)% |
| Income taxes | (19) | (14) | 39.2% | (6) | (7) | (15.5)% |
| Profit after tax | 71 | 46 | 56.2% | 20 | 23 | (11.0)% |
| Profit attributable to non-controlling interests |
(5) | (4) | 31.4% | (1) | (2) | (34.3)% |
| Profit after non-controlling interests | 67 | 42 | 58.4% | 19 | 21 | (9.1)% |
| Assets | 7,234 | 6,516 | 11.0% | 7,234 | 7,173 | 0.8% |
| Loans and advances to customers | 5,347 | 5,084 | 5.2% | 5,347 | 5,581 | (4.2)% |
| hereof corporate % | 60.6% | 58.9% | 1.7 PP | 60.6% | 60.0% | 0.6 PP |
| hereof retail % | 38.6% | 40.1% | (1.6) PP | 38.6% | 39.2% | (0.7) PP |
| hereof foreign currency % | 39.7% | 36.3% | 3.5 PP | 39.7% | 36.3% | 3.4 PP |
| Deposits from customers | 4,098 | 3,477 | 17.9% | 4,098 | 3,982 | 2.9% |
| Loan/deposit ratio | 130.5% | 146.2% | (15.7) PP | 130.5% | 140.2% | (9.7) PP |
| Return on equity before tax | 17.2% | 11.5% | 5.8 PP | 15.5% | 16.7% | (1.3) PP |
| Return on equity after tax | 13.5% | 8.8% | 4.8 PP | 11.9% | 12.7% | (0.8) PP |
| Cost/income ratio | 54.4% | 55.3% | (0.9) PP | 56.3% | 56.7% | (0.4) PP |
| Number of employees as of reporting date |
3,149 | 3,074 | 2.4% | 3,149 | 3,134 | 0.5% |
| Business outlets | 116 | 123 | (5.7)% | 116 | 117 | (0.9)% |
| Number of customers | 243,900 | 240,959 | 1.2% | 243,900 | 247,543 | (1.5)% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 227 | 207 | 9.7% | 76 | 78 | (1.6)% |
| Net fee and commission income | 97 | 91 | 5.6% | 33 | 33 | 1.4% |
| Net trading income | 0 | (10) | (98.4)% | 0 | (2) | – |
| Other net operating income | 7 | (10) | – | 5 | 2 | 128.3% |
| Operating income | 331 | 278 | 18.9% | 114 | 110 | 3.5% |
| General administrative expenses | (190) | (164) | 15.7% | (60) | (66) | (8.5)% |
| Operating result | 141 | 114 | 23.4% | 54 | 45 | 21.0% |
| Net provisioning for impairment losses | (5) | (43) | (88.9)% | (7) | 3 | – |
| Other results | 1 | 5 | (79.6)% | 2 | 0 | >500.0% |
| Profit before tax | 137 | 76 | 80.9% | 49 | 48 | 2.2% |
| Income taxes | (28) | (18) | 53.0% | (10) | (9) | 10.3% |
| Profit after tax | 109 | 58 | 89.8% | 39 | 39 | 0.2% |
| Profit attributable to non-controlling interests |
(42) | (22) | 94.0% | (14) | (15) | (5.1)% |
| Profit after non-controlling interests | 67 | 36 | 87.3% | 24 | 24 | 3.7% |
| Assets | 9,453 | 8,743 | 8.1% | 9,453 | 9,149 | 3.3% |
| Loans and advances to customers | 6,536 | 5,828 | 12.1% | 6,536 | 6,367 | 2.7% |
| hereof corporate % | 53.0% | 53.1% | 0.1 PP | 53.0% | 51.8% | 1.2 PP |
| hereof retail % | 46.7% | 46.6% | 0.1 PP | 46.7% | 48.0% | (1.2) PP |
| hereof foreign currency % | 1.0% | 1.9% | (0.9) PP | 1.0% | 1.1% | (0.1) PP |
| Deposits from customers | 7,037 | 6,596 | 6.7% | 7,037 | 6,899 | 2.0% |
| Loan/deposit ratio | 92.9% | 88.3% | 4.5 PP | 92.9% | 92.3% | 0.6 PP |
| Return on equity before tax | 20.8% | 13.0% | 7.9 PP | 23.5% | 23.7% | (0.2) PP |
| Return on equity after tax | 16.6% | 9.8% | 6.8 PP | 18.5% | 19.1% | (0.6) PP |
| Cost/income ratio | 57.4% | 59.0% | (1.6) PP | 52.6% | 59.4% | (6.9) PP |
| Number of employees as of reporting date |
3,807 | 3,695 | 3.0% | 3,807 | 3,768 | 1.0% |
| Business outlets | 156 | 157 | (0.6)% | 156 | 157 | (0.6)% |
| Number of customers | 770,491 | 734,946 | 4.8% | 770,491 | 757,893 | 1.7% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 23 | 23 | 1.9% | 7 | 8 | (12.5)% |
| Net fee and commission income | 6 | 5 | 22.5% | 2 | 2 | (7.2)% |
| Net trading income | 0 | (1) | – | 0 | 0 | – |
| Other net operating income | 0 | 1 | (72.3)% | 0 | 0 | – |
| Operating income | 30 | 28 | 5.3% | 10 | 10 | (3.3)% |
| General administrative expenses | (20) | (20) | 2.4% | (7) | (7) | (3.0)% |
| Operating result | 9 | 8 | 12.4% | 3 | 3 | (3.8)% |
| Net provisioning for impairment losses | (13) | (6) | 120.2% | (3) | (7) | (54.3)% |
| Other results | (1) | 0 | – | (2) | 0 | >500.0% |
| Profit/loss before tax | (5) | 3 | – | (2) | (5) | (56.4)% |
| Income taxes | 0 | (1) | – | 0 | 0 | – |
| Profit/loss after tax | (5) | 2 | – | (2) | (4) | (54.4)% |
| Profit attributable to non-controlling interests |
1 | 0 | – | 0 | 1 | (61.1)% |
| Profit/loss after non-controlling | ||||||
| interests | (5) | 2 | – | (2) | (4) | (53.3)% |
| Assets | 1,668 | 1,615 | 3.3% | 1,668 | 1,679 | (0.7)% |
| Loans and advances to customers | 1,342 | 1,284 | 4.5% | 1,342 | 1,344 | (0.2)% |
| hereof corporate % | 62.4% | 69.5% | (7.1) PP | 62.4% | 63.1% | (0.7) PP |
| hereof retail % | 31.5% | 29.5% | 2.0 PP | 31.5% | 30.8% | 0.7 PP |
| hereof foreign currency % | 6.7% | 9.9% | (3.2) PP | 6.7% | 7.2% | (0.6) PP |
| Deposits from customers | 402 | 475 | (15.3)% | 402 | 480 | (16.2)% |
| Loan/deposit ratio | 333.6% | 270.5% | 63.2 PP | 333.6% | 280.3% | 53.4 PP |
| Return on equity before tax | – | 4.3% | – | – | – | – |
| Return on equity after tax | – | 2.9% | – | – | – | – |
| Cost/income ratio | 68.7% | 70.7% | (2.0) PP | 68.5% | 68.3% | 0.2 PP |
| Number of employees as of reporting | ||||||
| date | 342 | 351 | (2.6)% | 342 | 357 | (4.2)% |
| Business outlets | 17 | 17 | – | 17 | 17 | – |
| Number of customers | 67,823 | 66,321 | 2.3% | 67,823 | 67,102 | 1.1% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 689 | 673 | 2.4% | 234 | 234 | 0.4% |
| Net fee and commission income | 272 | 287 | (5.2)% | 93 | 92 | 1.9% |
| Net trading income | 26 | 44 | (40.8)% | 0 | 12 | – |
| Other net operating income | 28 | 29 | (2.9)% | 11 | 10 | 2.6% |
| Operating income | 1,016 | 1,034 | (1.7)% | 338 | 348 | (2.8)% |
| General administrative expenses | (554) | (543) | 2.1% | (183) | (189) | (3.5)% |
| Operating result | 462 | 491 | (6.0)% | 155 | 158 | (1.9)% |
| Net provisioning for impairment losses | (194) | (227) | (14.6)% | (70) | (64) | 9.6% |
| Other results | (8) | (1) | 425.4% | (14) | 1 | – |
| Profit before tax | 260 | 263 | (0.9)% | 72 | 96 | (25.2)% |
| Income taxes | (31) | (35) | (9.4)% | (8) | (11) | (33.0)% |
| Profit after tax | 229 | 228 | 0.4% | 64 | 85 | (24.2)% |
| Profit attributable to non-controlling interests | (12) | (16) | (24.2)% | 0 | (5) | – |
| Profit after non-controlling interests | 217 | 212 | 2.3% | 64 | 80 | (19.6)% |
| Share of profit before tax | 18.1% | 21.3% | (3.1) PP | 9.3% | 12.4% | (3.1) PP |
| Risk-weighted assets (credit risk) | 16,515 | 15,818 | 4.4% | 16,515 | 16,485 | 0.2% |
| Total own funds requirement | 1,550 | 1,473 | 5.2% | 1,550 | 1,551 | (0.1)% |
| Assets | 22,630 | 22,435 | 0.9% | 22,630 | 22,471 | 0.7% |
| Liabilities | 19,695 | 19,618 | 0.4% | 19,695 | 19,572 | 0.6% |
| Net interest margin | 4.08% | 3.89% | 0.19 PP | 4.16% | 4.18% | (0.02) PP |
| NPL ratio | 10.3% | 7.5% | 2.9 PP | 10.3% | 10.0% | 0.3 PP |
| Coverage ratio | 62.9% | 66.9% | (4.0) PP | 62.9% | 62.5% | 0.4 PP |
| Cost/income ratio | 54.6% | 52.5% | 2.1 PP | 54.1% | 54.5% | (0.4) PP |
| Net provisioning ratio (average risk weighted assets, credit risk) |
1.56% | 1.88% | (0.31) PP | 1.69% | 1.55% | 0.14 PP |
| Average equity | 2,018 | 1,954 | 3.3% | 2,018 | 2,088 | (3.4)% |
| Return on equity before tax | 17.2% | 17.9% | (0.7) PP | 14.0% | 18.2% | (4.3) PP |
| Business outlets | 1,153 | 1,171 | (1.5)% | 1,153 | 1,154 | (0.1)% |
In Southeastern Europe profit before tax amounted to € 260 million and was thereby 1 per cent below the previous year's comparable period. Despite the gradual onset of economic recovery in the region, the decrease in operating income (primarily in Croatia) and in other net income in Romania had a negative impact on the segment's profit during the reporting period. Conversely, lower net provisioning for impairment losses had a positive effect on profit before tax. The segment's return on equity before tax fell by 0.7 percentage points year-on-year to 17.2 per cent.
Net interest income in this segment rose by 2 per cent to € 689 million. This growth was primarily concentrated in Romania and Serbia. In Romania, it was due to a significant increase in loans and advances to large corporate customers and retail customers, despite high pressure on margins. In Serbia, growth in net interest income was primarily caused by lower refinancing costs. By contrast, a reduction in the volume of consumer loans led to a decrease in net interest income in Bulgaria. The net interest margin rose by 19 basis points overall to 4.08 per cent. Balance sheet assets in the region remained virtually unchanged year-on-year at € 22.6 billion. Credit risk-weighted assets increased by 4 per cent year-on-year to € 16.5 billion. This development was attributable mainly to Romania, where there was a shift in off-balance-sheet items to corporate lending, accompanied by a decrease in Basel II collateral.
Net fee and commission income declined by 5 per cent year-on-year to € 272 million. The payment transfer business continued as the biggest contributor with € 131 million, unchanged compared with the prior-year level for the period. Net income from loan and guarantee business fell by 29 per cent year-on-year to € 50 million. This was due to developments in Romania, where lower transaction volumes (particularly in the currently slow guarantee business) and a market-related fall in prices prompted the decline, and the new provisions of the Consumer Protection Act which came into force in June 2010 also reduced earnings. In Croatia, net income from the securities business fell due to the omission of significant public sector issues on the local financial market. Income from the foreign currency, notes/coins and precious-metals business rose by € 2 million year-on-year to € 50 million.
Net trading income for Southeastern Europe fell year-on-year by 41 per cent to € 26 million. Net income from currency-based transactions declined by 35 per cent year-on-year to € 16 million. While the valuation gains on forward and swap transactions in Romania remained unchanged from the previous year's comparable period, net income in Croatia decreased due to the expiration of a number of currency swap transactions and significantly lower currency volatility. Interest-based transactions posted income of € 11 million, a decrease of 21 per cent. While net income from swap transactions increased in Romania, there were revaluation losses in Croatia on various government bonds in the portfolio due to widening spreads. Revaluations of fixed-interest securities in Albania led to a year-onyear decrease in net income of € 2 million to € 9 million.
Other net operating income decreased year-on-year by 3 per cent to € 28 million. Income from the operating lease business in Croatia and Bosnia and Herzegovina rose by € 2 million overall to € 31 million, which had a positive impact on net income. By contrast, the higher provisioning for current legal issues in Croatia and Romania had the opposite effect.
General administrative expenses rose year-on-year by a total of 2 per cent to € 554 million. A key factor was the development in Romania, where staff expenses rose substantially on account of salary increases that had been implemented at the end of 2010 to bring salaries up to market levels, mostly in the branch network. Other administrative expenses increased by a total of 1 per cent. This increase was also attributable to Romania, where higher expenses were incurred for new IT applications and deposit insurance fees. The change in VAT regulations also increased expenses. Depreciation, amortization and write-downs, especially on intangible fixed assets including IT applications mainly in Romania, rose by 7 per cent to € 81 million. The combination of lower operating income and increased general administrative expenses led to an increase of the cost/income ratio by 2.1 percentage points to 54.6 per cent.
Net provisioning for impairment losses was down by a total of 15 per cent or € 33 million to € 194 million. Net allocations to individual loan loss provisions declined by 1 per cent or € 3 million to € 222 million, due principally to Bulgaria, where improved portfolio quality and higher income from written-down claims to retail customers had a positive impact. Net allocations to individual loan loss provisions were also significantly lower in Bosnia and Herzegovina. Portfolio-based loan loss provisions resulted in a positive figure of € 26 million. Serbia and Romania reported the highest releases of existing portfolio-based loan loss provisions. In Albania and Croatia, net provisioning for the large customer portfolio increased. The ratio of non-performing loans in the credit portfolio rose to 10.3 per cent at the end of the period under review.
Other results for the Southeastern Europe segment fell year-on-year by € 6 million to minus € 8 million. Net income from financial investments decreased from € 12 million to € 4 million. This decline was mainly attributable to lower income from disposal and revaluation losses on government bonds in Romania due to rising yields. The deconsolidation of a leasing company in Moldova for materiality reasons resulted in a net loss from disposal of group assets of € 0.3 million.
Income taxes decreased in the region by 9 per cent year-on-year to € 31 million. The tax rate also fell by 1 percentage point to 12 per cent.
Profit for the period after non-controlling interests rose by 2 per cent to € 217 million. Profit attributable to non-controlling interests was higher due to year-on-year differences in the geographical distribution of results.
The detailed results of the individual countries in the segment are listed below:
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 66 | 65 | 1.2% | 22 | 22 | 0.2% |
| Net fee and commission income | 6 | 6 | 4.0% | 2 | 2 | 12.3% |
| Net trading income | 10 | 11 | (7.8)% | 4 | 3 | 17.0% |
| Other net operating income | 0 | 0 | (52.4)% | 0 | 0 | – |
| Operating income | 82 | 82 | 0.2% | 28 | 27 | 4.2% |
| General administrative expenses | (27) | (25) | 9.1% | (9) | (9) | 0.4% |
| Operating result | 55 | 57 | (3.8)% | 19 | 17 | 6.3% |
| Net provisioning for impairment losses | (17) | (20) | (11.1)% | (4) | (10) | (58.1)% |
| Other results | 0 | 0 | – | 0 | 0 | – |
| Profit before tax | 37 | 37 | 0.0% | 14 | 7 | 97.8% |
| Income taxes | (4) | (4) | 12.6% | (1) | (1) | 109.8% |
| Profit after tax | 33 | 34 | (1.5)% | 13 | 6 | 96.5% |
| Profit attributable to non-controlling interests |
0 | 0 | (7.6)% | 0 | 0 | 8.7% |
| Profit after non-controlling interests | 33 | 34 | (1.5)% | 13 | 6 | 96.7% |
| Assets | 2,156 | 1,988 | 8.4% | 2,156 | 2,094 | 3.0% |
| Loans and advances to customers | 855 | 741 | 15.4% | 855 | 799 | 7.0% |
| hereof corporate % | 62.2% | 60.8% | 1.4 PP | 62.2% | 60.6% | 1.6 PP |
| hereof retail % | 37.8% | 39.2% | (1.4) PP | 37.8% | 39.4% | (1.6) PP |
| hereof foreign currency % | 65.5% | 61.4% | 4.1 PP | 65.5% | 63.9% | 1.5 PP |
| Deposits from customers | 1,840 | 1,637 | 12.4% | 1,840 | 1,768 | 4.1% |
| Loan/deposit ratio | 46.5% | 45.2% | 1.2 PP | 46.5% | 45.2% | 1.3 PP |
| Return on equity before tax | 26.5% | 28.3% | (1.9) PP | 33.4% | 15.4% | 18.0 PP |
| Return on equity after tax | 23.4% | 25.4% | (2.0) PP | 29.9% | 13.9% | 16.0 PP |
| Cost/income ratio | 33.3% | 30.6% | 2.7 PP | 33.5% | 34.8% | (1.3) PP |
| Number of employees as of reporting | ||||||
| date | 1,378 | 1,319 | 4.5% | 1,378 | 1,364 | 1.0% |
| Business outlets | 104 | 104 | – | 104 | 103 | 1.0% |
| Number of customers | 689,725 | 618,762 | 11.5% | 689,725 | 670,701 | 2.8% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 59 | 53 | 10.3% | 20 | 20 | (0.6)% |
| Net fee and commission income | 23 | 22 | 5.7% | 8 | 8 | 6.9% |
| Net trading income | 1 | 0 | 61.5% | 0 | 0 | (29.9)% |
| Other net operating income | 4 | 0 | >500.0% | 2 | 1 | 65.9% |
| Operating income | 87 | 76 | 13.7% | 30 | 29 | 3.9% |
| General administrative expenses | (47) | (47) | (0.2)% | (16) | (16) | 1.8% |
| Operating result | 39 | 29 | 36.6% | 14 | 13 | 6.4% |
| Net provisioning for impairment losses | (12) | (21) | (42.4)% | (6) | (4) | 58.0% |
| Other results | (1) | 0 | – | 0 | 0 | 116.8% |
| Profit before tax | 26 | 8 | 242.6% | 8 | 10 | (15.0)% |
| Income taxes | (2) | (1) | 89.0% | 0 | (1) | (59.1)% |
| Profit after tax | 24 | 7 | 261.1% | 8 | 9 | (11.8)% |
| Profit attributable to non-controlling interests |
0 | 0 | 48.9% | 0 | 0 | 14.4% |
| Profit after non-controlling interests | 24 | 6 | 269.7% | 8 | 9 | (12.6)% |
| Assets | 2,144 | 2,083 | 2.9% | 2,144 | 2,147 | (0.2)% |
| Loans and advances to customers | 1,373 | 1,330 | 3.2% | 1,373 | 1,372 | 0.1% |
| hereof corporate % | 43.5% | 41.7% | 1.7 PP | 43.5% | 43.6% | (0.1) PP |
| hereof retail % | 55.2% | 57.4% | (2.2) PP | 55.2% | 55.1% | 0.2 PP |
| hereof foreign currency % | 73.4% | 76.2% | (2.8) PP | 73.4% | 66.2% | 7.2 PP |
| Deposits from customers | 1,611 | 1,537 | 4.8% | 1,611 | 1,617 | (0.4)% |
| Loan/deposit ratio | 85.3% | 86.6% | (1.3) PP | 85.3% | 84.9% | 0.4 PP |
| Return on equity before tax | 14.3% | 4.3% | 10.0 PP | 13.6% | 15.9% | (2.3) PP |
| Return on equity after tax | 13.4% | 3.8% | 9.6 PP | 13.1% | 14.8% | (1.7) PP |
| Cost/income ratio | 54.5% | 62.1% | (7.6) PP | 53.1% | 54.3% | (1.1) PP |
| Number of employees as of reporting date |
1,583 | 1,646 | (3.8)% | 1,583 | 1,621 | (2.3)% |
| Business outlets | 98 | 100 | (2.0)% | 98 | 98 | – |
| Number of customers | 636,818 | 655,427 | (2.8)% | 636,818 | 629,921 | 1.1% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 126 | 142 | (10.7)% | 42 | 42 | (1.0)% |
| Net fee and commission income | 28 | 26 | 8.0% | 10 | 9 | 12.4% |
| Net trading income | 6 | 5 | 12.3% | 2 | 2 | 1.3% |
| Other net operating income | 0 | (1) | – | 0 | 0 | 41.3% |
| Operating income | 160 | 172 | (6.6)% | 53 | 54 | (0.6)% |
| General administrative expenses | (73) | (72) | 1.9% | (24) | (25) | (0.2)% |
| Operating result | 87 | 100 | (12.8)% | 29 | 29 | (0.9)% |
| Net provisioning for impairment losses | (50) | (70) | (28.0)% | (24) | (14) | 72.9% |
| Other results | 0 | 0 | >500.0% | 0 | 0 | 115.1% |
| Profit before tax | 37 | 30 | 23.7% | 5 | 15 | (65.6)% |
| Income taxes | (3) | (2) | 36.3% | 0 | (1) | (77.8)% |
| Profit after tax | 34 | 28 | 22.6% | 5 | 14 | (64.4)% |
| Profit attributable to non-controlling interests |
(1) | (2) | (59.7)% | 0 | 0 | – |
| Profit after non-controlling interests | 33 | 26 | 29.5% | 5 | 14 | (65.9)% |
| Assets | 3,705 | 3,717 | (0.3)% | 3,705 | 3,752 | (1.2)% |
| Loans and advances to customers | 2,927 | 2,819 | 3.8% | 2,927 | 2,886 | 1.4% |
| hereof corporate % | 44.0% | 41.3% | 2.7 PP | 44.0% | 43.7% | 0.3 PP |
| hereof retail % | 55.5% | 58.3% | (2.8) PP | 55.5% | 55.9% | (0.4) PP |
| hereof foreign currency % | 79.5% | 72.1% | 7.4 PP | 79.5% | 76.6% | 2.9 PP |
| Deposits from customers | 2,124 | 1,978 | 7.4% | 2,124 | 2,084 | 1.9% |
| Loan/deposit ratio | 137.8% | 142.5% | (4.7) PP | 137.8% | 138.5% | (0.7) PP |
| Return on equity before tax | 10.2% | 8.4% | 1.8 PP | 4.4% | 12.9% | (8.4) PP |
| Return on equity after tax | 9.3% | 7.7% | 1.5 PP | 4.2% | 11.7% | (7.5) PP |
| Cost/income ratio | 45.6% | 41.7% | 3.8 PP | 46.0% | 45.8% | 0.2 PP |
| Number of employees as of reporting date |
3,346 | 3,234 | 3.5% | 3,346 | 3,249 | 3.0% |
| Business outlets | 189 | 191 | (1.0)% | 189 | 189 | – |
| Number of customers | 763,485 | 728,902 | 4.7% | 763,485 | 753,646 | 1.3% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 134 | 131 | 2.4% | 44 | 47 | (7.1)% |
| Net fee and commission income | 50 | 53 | (6.1)% | 18 | 16 | 10.3% |
| Net trading income | (3) | 18 | – | (7) | 1 | – |
| Other net operating income | 19 | 21 | (8.0)% | 5 | 7 | (33.2)% |
| Operating income | 200 | 223 | (10.3)% | 59 | 72 | (17.8)% |
| General administrative expenses | (115) | (116) | (0.6)% | (37) | (40) | (7.4)% |
| Operating result | 85 | 107 | (20.8)% | 22 | 32 | (30.6)% |
| Net provisioning for impairment losses | (44) | (39) | 14.2% | (13) | (15) | (14.4)% |
| Other results | (6) | (8) | (31.6)% | (9) | (2) | 284.0% |
| Profit before tax | 35 | 61 | (41.7)% | 0 | 15 | (99.5)% |
| Income taxes | (7) | (12) | (43.3)% | 0 | (2) | (83.5)% |
| Profit after tax | 28 | 48 | (41.3)% | 0 | 12 | – |
| Profit attributable to non-controlling | ||||||
| interests | (7) | (14) | (48.6)% | 1 | (3) | – |
| Profit after non-controlling interests | 21 | 34 | (38.4)% | 0 | 9 | (96.7)% |
| Assets | 5,490 | 5,881 | (6.7)% | 5,490 | 5,640 | (2.7)% |
| Loans and advances to customers | 3,809 | 3,761 | 1.3% | 3,809 | 3,885 | (2.0)% |
| hereof corporate % | 39.2% | 37.5% | 1.7 PP | 39.2% | 38.9% | 0.2 PP |
| hereof retail % | 49.1% | 50.6% | (1.5) PP | 49.1% | 48.5% | 0.6 PP |
| hereof foreign currency % | 67.8% | 70.2% | (2.4) PP | 67.8% | 68.2% | (0.4) PP |
| Deposits from customers | 3,150 | 3,107 | 1.4% | 3,150 | 2,986 | 5.5% |
| Loan/deposit ratio | 120.9% | 121.1% | (0.1) PP | 120.9% | 130.1% | (9.2) PP |
| Return on equity before tax | 6.0% | 10.2% | (4.2) PP | – | 7.4% | – |
| Return on equity after tax | 4.8% | 8.2% | (3.4) PP | – | 6.2% | – |
| Cost/income ratio | 57.5% | 51.9% | 5.6 PP | 62.2% | 55.3% | 7.0 PP |
| Number of employees as of reporting date |
2,102 | 2,208 | (4.8)% | 2,102 | 2,112 | (0.5)% |
| Business outlets | 81 | 84 | (3.6)% | 81 | 84 | (3.6)% |
| Number of customers | 538,202 | 546,537 | (1.5)% | 538,202 | 541,585 | (0.6)% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 29 | 25 | 12.5% | 10 | 10 | 5.5% |
| Net fee and commission income | 6 | 5 | 5.7% | 2 | 2 | 28.3% |
| Net trading income | 0 | 0 | – | 0 | 0 | – |
| Other net operating income | 0 | 0 | (47.0)% | 0 | 0 | 143.5% |
| Operating income | 34 | 30 | 12.3% | 12 | 11 | 10.1% |
| General administrative expenses | (19) | (17) | 9.0% | (6) | (6) | 0.8% |
| Operating result | 15 | 13 | 16.7% | 6 | 5 | 22.0% |
| Net provisioning for impairment losses | (3) | (3) | (2.1)% | (1) | (1) | 3.4% |
| Other results | 0 | (1) | (60.7)% | 0 | 0 | 86.5% |
| Profit before tax | 12 | 9 | 28.4% | 4 | 4 | 23.4% |
| Income taxes | (1) | (1) | 3.5% | 0 | 0 | 32.2% |
| Profit after tax | 11 | 8 | 31.7% | 4 | 3 | 22.4% |
| Profit attributable to non-controlling interests |
0 | 0 | – | 0 | 0 | – |
| Profit after non-controlling interests | 11 | 8 | 31.1% | 4 | 3 | 22.1% |
| Assets | 702 | 638 | 10.0% | 702 | 667 | 5.2% |
| Loans and advances to customers | 421 | 377 | 11.6% | 421 | 418 | 0.8% |
| hereof corporate % | 32.0% | 28.6% | 3.4 PP | 32.0% | 31.8% | 0.2 PP |
| hereof retail % | 68.0% | 71.4% | (3.4) PP | 68.0% | 68.2% | (0.2) PP |
| hereof foreign currency % | 0.0% | 0.0% | 0.0 PP | 0.0% | 0.0% | 0.0 PP |
| Deposits from customers | 580 | 509 | 14.0% | 580 | 547 | 6.2% |
| Loan/deposit ratio | 72.6% | 74.1% | (1.5) PP | 72.6% | 76.5% | (3.9) PP |
| Return on equity before tax | 18.3% | 15.6% | 2.7 PP | 20.5% | 16.2% | 4.4 PP |
| Return on equity after tax | 16.5% | 13.7% | 2.8 PP | 18.3% | 14.5% | 3.8 PP |
| Cost/income ratio | 55.0% | 56.7% | (1.7) PP | 51.5% | 56.3% | (4.7) PP |
| Number of employees as of reporting date |
717 | 686 | 4.5% | 717 | 713 | 0.6% |
| Business outlets | 52 | 52 | – | 52 | 52 | – |
| Number of customers | 245,849 | 268,931 | (8.6)% | 245,849 | 238,581 | 3.0% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 196 | 181 | 8.0% | 71 | 65 | 9.8% |
| Net fee and commission income | 134 | 150 | (10.8)% | 43 | 46 | (4.6)% |
| Net trading income | 11 | 10 | 7.2% | 1 | 5 | (85.8)% |
| Other net operating income | 2 | 1 | 72.8% | 2 | 1 | 189.1% |
| Operating income | 342 | 342 | (0.1)% | 118 | 117 | 0.8% |
| General administrative expenses | (214) | (204) | 4.7% | (70) | (73) | (4.1)% |
| Operating result | 128 | 138 | (7.2)% | 48 | 44 | 9.0% |
| Net provisioning for impairment losses | (52) | (52) | (0.1)% | (18) | (18) | 1.8% |
| Other results | (5) | 12 | – | (6) | 2 | – |
| Profit before tax | 71 | 98 | (27.4)% | 24 | 29 | (16.4)% |
| Income taxes | (11) | (13) | (16.2)% | (4) | (4) | (20.2)% |
| Profit after tax | 60 | 85 | (29.1)% | 20 | 24 | (15.7)% |
| Profit attributable to non-controlling | ||||||
| interests | (1) | 0 | – | 0 | 0 | – |
| Profit after non-controlling interests | 59 | 85 | (29.8)% | 20 | 24 | (14.9)% |
| Assets | 6,292 | 5,674 | 10.9% | 6,292 | 6,172 | 1.9% |
| Loans and advances to customers | 4,404 | 4,104 | 7.3% | 4,404 | 4,397 | 0.2% |
| hereof corporate % | 37.3% | 33.4% | 4.0 PP | 37.3% | 34.1% | 3.2 PP |
| hereof retail % | 60.2% | 60.7% | (0.5) PP | 60.2% | 60.7% | (0.5) PP |
| hereof foreign currency % | 52.1% | 61.8% | (9.7) PP | 52.1% | 52.1% | 0.0 PP |
| Deposits from customers | 3,758 | 3,422 | 9.8% | 3,758 | 3,499 | 7.4% |
| Loan/deposit ratio | 117.2% | 119.9% | (2.7) PP | 117.2% | 125.7% | (8.5) PP |
| Return on equity before tax | 19.6% | 30.1% | (10.5) PP | 20.3% | 22.6% | (2.3) PP |
| Return on equity after tax | 16.6% | 26.2% | (9.6) PP | 17.3% | 19.1% | (1.8) PP |
| Cost/income ratio | 62.6% | 59.7% | 2.9 PP | 59.6% | 62.6% | (3.0) PP |
| Number of employees as of reporting date |
6,065 | 6,096 | (0.5)% | 6,065 | 6,054 | 0.2% |
| Business outlets | 544 | 542 | 0.4% | 544 | 544 | – |
| Number of customers | 1,956,099 | 1,888,234 | 3.6% | 1,956,099 | 1,939,762 | 0.8% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 81 | 76 | 5.8% | 26 | 28 | (5.8)% |
| Net fee and commission income | 25 | 25 | 2.1% | 9 | 9 | 3.1% |
| Net trading income | 2 | 0 | – | 1 | 0 | 214.2% |
| Other net operating income | 3 | 3 | 24.7% | 2 | 1 | 16.3% |
| Operating income | 112 | 104 | 7.6% | 37 | 38 | (1.9)% |
| General administrative expenses | (59) | (62) | (3.7)% | (20) | (21) | (4.4)% |
| Operating result | 52 | 42 | 24.2% | 18 | 18 | 1.0% |
| Net provisioning for impairment losses | (15) | (22) | (34.3)% | (4) | (2) | 82.1% |
| Other results | 4 | 0 | >500.0% | 2 | 1 | 21.4% |
| Profit before tax | 41 | 20 | 107.9% | 16 | 17 | (7.7)% |
| Income taxes | (3) | (1) | 145.4% | (1) | (1) | (19.8)% |
| Profit after tax | 38 | 19 | 105.1% | 15 | 16 | (6.6)% |
| Profit attributable to non-controlling | ||||||
| interests | 1 | 2 | (55.7)% | 0 | 1 | (83.7)% |
| Profit after non-controlling interests | 39 | 20 | 92.4% | 15 | 17 | (11.1)% |
| Assets | 2,214 | 2,470 | (10.4)% | 2,214 | 2,050 | 8.0% |
| Loans and advances to customers | 1,348 | 1,313 | 2.7% | 1,348 | 1,368 | (1.4)% |
| hereof corporate % | 54.1% | 55.0% | (1.0) PP | 54.1% | 54.9% | (0.8) PP |
| hereof retail % | 42.8% | 44.8% | (1.9) PP | 42.8% | 42.2% | 0.7 PP |
| hereof foreign currency % | 65.4% | 65.6% | (0.2) PP | 65.4% | 65.2% | 0.2 PP |
| Deposits from customers | 1,139 | 1,130 | 0.8% | 1,139 | 1,015 | 12.3% |
| Loan/deposit ratio | 118.4% | 116.2% | 2.2 PP | 118.4% | 134.8% | (16.4) PP |
| Return on equity before tax | 11.1% | 5.5% | 5.6 PP | 12.4% | 13.6% | (1.2) PP |
| Return on equity after tax | 10.2% | 5.1% | 5.1 PP | 11.5% | 12.5% | (1.0) PP |
| Cost/income ratio | 53.2% | 59.5% | (6.3) PP | 52.3% | 53.7% | (1.4) PP |
| Number of employees as of reporting date |
1,772 | 1,914 | (7.4)% | 1,772 | 1,776 | (0.2)% |
| Business outlets | 85 | 97 | (12.4)% | 85 | 84 | 1.2% |
| Number of customers | 499,849 | 589,004 | (15.1)% | 499,849 | 496,254 | 0.7% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 432 | 381 | 13.2% | 153 | 143 | 6.6% |
| Net fee and commission income | 174 | 155 | 11.8% | 64 | 57 | 12.0% |
| Net trading income | 37 | 59 | (36.1)% | (22) | 28 | – |
| Other net operating income | (3) | (14) | (79.6)% | (2) | 1 | – |
| Operating income | 640 | 581 | 10.1% | 192 | 229 | (16.1)% |
| General administrative expenses | (335) | (302) | 10.9% | (113) | (109) | 3.7% |
| Operating result | 305 | 279 | 9.2% | 79 | 120 | (34.1)% |
| Net provisioning for impairment losses | (21) | (83) | (74.6)% | (17) | (2) >500.0% | |
| Other results | 3 | (13) | – | 18 | (6) | – |
| Profit before tax | 287 | 184 | 56.1% | 81 | 112 | (27.7)% |
| Income taxes | (76) | (46) | 66.8% | (27) | (26) | 3.1% |
| Profit after tax | 210 | 138 | 52.6% | 54 | 86 | (36.9)% |
| Profit attributable to non-controlling | ||||||
| interests | 0 | 0 | – | 2 | (1) | – |
| Profit after non-controlling interests | 210 | 138 | 52.8% | 56 | 85 | (33.9)% |
| Share of profit before tax | 20.0% | 14.9% | 5.1 PP | 10.4% | 14.4% | (4.0) PP |
| Risk-weighted assets (credit risk) | 11,331 | 8,442 | 34.2% | 11,331 | 9,310 | 21.7% |
| Total own funds requirement | 1,098 | 897 | 22.3% | 1,098 | 968 | 13.4% |
| Assets | 13,975 | 12,013 | 16.3% | 13,975 | 13,196 | 5.9% |
| Liabilities | 12,078 | 10,229 | 18.1% | 12,078 | 11,220 | 7.6% |
| Net interest margin | 4.44% | 4.14% | 0.30 PP | 4.49% | 4.46% | 0.03 PP |
| NPL ratio | 5.9% | 11.2% | (5.3) PP | 5.9% | 7.2% | (1.3) PP |
| Coverage ratio | 107.3% | 86.6% | 20.6 PP | 107.3% | 103.5% | 3.7 PP |
| Cost/income ratio | 52.4% | 52.0% | 0.4 PP | 58.8% | 47.6% | 11.2 PP |
| Net provisioning ratio (average risk | ||||||
| weighted assets, credit risk) | 0.29% | 1.40% | (1.11) PP | 0.65% | 0.11% | 0.54 PP |
| Average equity | 1,259 | 1,079 | 16.7% | 1,259 | 1,244 | 1.2% |
| Return on equity before tax | 30.3% | 22.7% | 7.7 PP | 25.8% | 36.0% | (10.2) PP |
Profit before tax for the Russia segment rose by 56 per cent year-on-year to € 287 million. Higher general administrative expenses were more than offset by the significant increase in operating income, and profit before tax also benefited from significantly lower net provisioning for impairment losses. Return on equity before tax improved by 7.7 percentage points to 30.3 per cent.
Net interest income in Russia rose year-on-year by 13 per cent or € 50 million to € 432 million. This rise – despite increased pressure on margins – was mainly attributable to a significant total increase of 34 per cent in the large corporate customer loan portfolio due to strong demand for loans. The clear rise in net interest income from derivative financial instruments, the result of a larger number of transactions, also contributed positively to this figure. Conversely, the maturing securities investment portfolio had a negative impact on net interest income. The segment showed an increase in the net interest margin of 30 basis points year-on-year to 4.44 per cent. Total assets rose year-on-year by 16 per cent to € 14.0 billion. The strong growth in the loan portfolio was offset by the reduction in holdings of sovereign securities and the decline in the trading portfolio. As a result of the significant rise in approved credit lines, credit risk-weighted assets rose by 34 per cent to € 11.3 billion. This growth was partly offset by the reduction in the sovereign portfolio.
Net fee and commission income rose by 12 per cent or € 18 million year-on-year to € 174 million. Net income from payment transfer business declined as a result of the release of deferred income, but still made the largest contribution with € 60 million. Income from securities business rose by 23 per cent or € 2 million year-on-year to € 10 million. Income from the foreign currency, notes/coins and precious-metals business also grew by € 2 million in line with the increase in transaction volumes in the reporting period, totaling € 38 million. In loan and guarantee business, net income rose by 90 per cent to € 44 million due to a change in the methodology for calculating fees and commissions. Improved income from debt collection activities and from import/export financing transactions also raised income from other banking services by 11 per cent to € 27 million.
Net trading income decreased from € 59 million to € 37 million while net income from interest-based transactions fell by € 54 million to € 3 million. The main reason for this decline was the high level of valuation gains on fixed-interest bonds and debt securities in the previous year due to reversals of impairments after the 2009 financial crisis. Net income from currency-based transactions grew by € 33 million year-on-year to € 34 million. This rise was the result of valuation gains on currency swaps linked to proprietary trading and on foreign currency positions due to the appreciation of the Russian rouble against the US dollar in the third quarter.
Other net operating income in the segment improved by € 11 million to minus € 3 million, mainly due to significantly lower allocations to other provisions that had been established in the prior-year period primarily for litigation relating to the closure of an outlet, and to an increase in income from the operating lease business in connection with a piece of real estate.
General administrative expenses in the segment rose by 11 per cent in total to € 335 million, primarily due to the increase in staff expenses as a result of market-related salary increases and (about one third) to higher ancillary salary costs (particularly statutory and voluntary social security contributions). Other administrative expenses rose, mainly due to increased IT as well as legal, advisory and consulting expenses. Depreciation, amortization and write-downs remained almost unchanged compared with the previous year. The number of business outlets fell by 7 to 192 year-on-year. The cost/income ratio was virtually unchanged at 52.4 per cent and significantly below that of the Group as a whole.
Net provisioning for impairment losses fell from € 83 million in the prior-year period to € 21 million. This was due particularly to lower net allocations to individual loan loss provisions as a result of releases of € 1 million in the large corporate customer portfolio. The year-on-year drop from 10.1 per cent to 5.9 per cent in the proportion of non-performing loans in the loan portfolio, the improved repayments of overdue loans and the sale of loans also contributed to the decline. Net allocations to portfolio-based loan loss provisions amounted to € 20 million in the reporting period whereas in the prior-year period net provisions of € 31 million had been released. This was entirely due to the increase in the underlying loan portfolio.
Other results came in at € 3 million in total, with a net income from derivatives of € 4 million. This was primarily linked to the revaluation of interest rate swap transactions entered into in order to mitigate interest rate structure risk. The ineffective part of the cash flow hedge tripled to € 3 million. Due to the deconsolidation of a leasing company for materiality reasons, the segment showed a net loss from disposal of group assets of € 1 million.
Income taxes increased year-on-year by € 31 million to € 76 million. The tax rate rose by 2 percentage points to 27 per cent, as a result of the higher proportion of expenses not deductible for tax purposes.
Profit after non-controlling interests rose by 53 per cent to € 210 million.
The table below provides an overview of the country results for Russia. Any discrepancies with the values specified for the Russia segment are the result of equity being allocated differently. The income figures in the country overview are based on the balance sheet equity; at segment level, the equity used in the calculation is based on actual equity used.
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 432 | 381 | 13.2% | 153 | 143 | 6.6% |
| Net fee and commission income | 174 | 155 | 11.8% | 64 | 57 | 12.0% |
| Net trading income | 37 | 59 | (36.1)% | (22) | 28 | – |
| Other net operating income | (4) | (11) | (65.8)% | (2) | 1 | – |
| Operating income | 639 | 584 | 9.4% | 192 | 229 | (16.1)% |
| General administrative expenses | (335) | (302) | 10.9% | (113) | (109) | 3.7% |
| Operating result | 304 | 282 | 7.7% | 79 | 120 | (34.1)% |
| Net provisioning for impairment losses |
(21) | (83) | (74.6)% | (17) | (2) >500.0% | |
| Other results | 4 | (16) | – | 18 | (6) | – |
| Profit before tax | 286 | 184 | 56.1% | 81 | 112 | (27.7)% |
| Income taxes | (76) | (46) | 66.8% | (27) | (26) | 3.1% |
| Profit after tax | 210 | 138 | 52.5% | 54 | 86 | (37.0)% |
| Profit attributable to non-controlling interests |
(3) | (1) | 261.6% | (1) | (1) | 41.7% |
| Profit after non-controlling | ||||||
| interests | 207 | 137 | 51.3% | 53 | 85 | (37.9)% |
| Assets | 13,975 | 12,013 | 16.3% | 13,975 | 13,196 | 5.9% |
| Loans and advances to customers |
9,219 | 7,000 | 31.7% | 9,219 | 8,337 | 10.6% |
| hereof corporate % | 72.5% | 71.2% | 1.3 PP | 72.5% | 71.1% | 1.4 PP |
| hereof retail % | 27.2% | 28.4% | (1.2) PP | 27.2% | 28.5% | (1.3) PP |
| hereof foreign currency % | 47.7% | 44.2% | 3.6 PP | 47.7% | 43.5% | 4.2 PP |
| Deposits from customers | 9,270 | 6,237 | 48.6% | 9,270 | 8,283 | 11.9% |
| Loan/deposit ratio | 99.5% | 112.2% | (12.8) PP | 99.5% | 100.7% | (1.2) PP |
| Return on equity before tax | 21.4% | 15.0% | 6.4 PP | 18.5% | 24.0% | (5.4) PP |
| Return on equity after tax | 15.7% | 11.3% | 4.4 PP | 12.4% | 18.4% | (6.0) PP |
| Cost/income ratio | 52.5% | 51.7% | 0.7 PP | 58.8% | 47.6% | 11.2 PP |
| Number of employees as of | ||||||
| reporting date | 8,697 | 8,487 | 2.5% | 8,697 | 8,628 | 0.8% |
| Business outlets | 192 | 199 | (3.5)% | 192 | 190 | 1.1% |
| 1/1-30/9 | 1/1-30/9 | Change | Q3/2011 | Q2/2011 | Change | |
|---|---|---|---|---|---|---|
| In € million | 2011 | 2010 | ||||
| Net interest income | 316 | 370 | (14.6)% | 113 | 102 | 10.5% |
| Net fee and commission income | 131 | 130 | 0.8% | 47 | 42 | 11.3% |
| Net trading income | 52 | 21 | 144.8% | 9 | 37 | (76.6)% |
| Other net operating income | (1) | (6) | (74.9)% | 1 | (1) | – |
| Operating income | 498 | 516 | (3.5)% | 169 | 180 | (6.1)% |
| General administrative expenses | (248) | (247) | 0.5% | (83) | (80) | 4.0% |
| Operating result | 249 | 268 | (7.2)% | 86 | 100 | (14.1)% |
| Net provisioning for impairment losses | (99) | (223) | (55.6)% | (28) | (21) | 34.2% |
| Other results | (8) | 18 | – | (13) | (1) >500.0% | |
| Profit before tax | 142 | 64 | 122.2% | 45 | 78 | (41.8)% |
| Income taxes | (38) | (22) | 77.6% | (13) | (18) | (30.1)% |
| Profit after tax | 104 | 42 | 144.9% | 33 | 60 | (45.4)% |
| Profit attributable to non-controlling interests | (10) | (6) | 76.5% | (2) | (5) | (60.6)% |
| Profit after non-controlling interests | 94 | 37 | 155.1% | 31 | 55 | (43.9)% |
| Share of profit before tax | 9.9% | 5.2% | 4.7 PP | 5.9% | 10.1% | (4.2) PP |
| Risk-weighted assets (credit risk) | 5,605 | 5,181 | 8.2% | 5,605 | 5,330 | 5.2% |
| Total own funds requirement | 541 | 500 | 8.1% | 541 | 514 | 5.2% |
| Assets | 6,758 | 6,846 | (1.3)% | 6,758 | 6,523 | 3.6% |
| Liabilities | 5,793 | 5,890 | (1.7)% | 5,793 | 5,629 | 2.9% |
| Net interest margin | 6.17% | 7.29% | (1.11) PP | 6.79% | 6.10% | 0.69 PP |
| NPL ratio | 28.1% | 24.5% | 3.5 PP | 28.1% | 27.5% | 0.5 PP |
| Coverage ratio | 71.6% | 73.8% | (2.2) PP | 71.6% | 72.9% | (1.3) PP |
| Cost/income ratio | 49.9% | 47.9% | 2.0 PP | 49.3% | 44.5% | 4.8 PP |
| Net provisioning ratio (average risk weighted assets, credit risk) |
2.38% | 5.65% | (3.27) PP | 2.02% | 1.52% | 0.50 PP |
| Average equity | 713 | 661 | 7.9% | 713 | 725 | (1.7)% |
| Return on equity before tax | 26.6% | 12.9% | 13.7 PP | 25.3% | 42.3% | (17.0) PP |
| Business outlets | 1,014 | 1,030 | (1.6)% | 1,014 | 1,022 | (0.8)% |
Profit before tax for the CIS other segment rose during the reporting period by 122 per cent to € 142 million. This year-on-year improvement was entirely due to the decline in net provisioning for impairment losses, while operating income was 4 per cent down on the prior year's comparable period as a result of lower net interest income. The return on equity before tax increased by 13.7 percentage points to 26.6 per cent. Net income in the segment was affected by the unstable currency situation and the resulting sharp devaluation of the Belarusian rouble during the reporting period.
Net interest income for the segment fell by 15 per cent or € 54 million to € 316 million. This was mainly brought about by a change in the method of calculating interest on impaired loans and advances that had been implemented in Ukraine in the fourth quarter of 2010, resulting in a one-off effect of around € 52 million year-on-year. However, this change did not affect the overall result, as it was offset by the corresponding reduction in impairment losses on loans and advances. Excluding this effect, net interest income in Ukraine remained unchanged. This flat development was due to the reduction in the loan portfolio and in margins on all asset classes except for the large customer business, as a result of the continuing difficult credit environment in Ukraine. Conversely, the higher earnings from the expanded portfolio of government bonds in Ukraine had a positive impact. Lower interest on customer deposits in Ukraine led to a reduction in funding costs. In Belarus, net interest income fell yearon-year, but remained the same in euros after adjusting for exchange differences.
The balance sheet assets for the segment decreased year-on-year by 1 per cent to € 6.8 billion, primarily due to weak growth in loans and advances in Ukraine. In addition, the currency depreciation in Belarus had a negative impact on balance sheet assets despite the growth in credit in local currency. The net interest margin in the segment fell by 1.11 percentage points overall to 6.17 per cent. 1.07 percentage points thereof can be attributed to the above-mentioned change in methodology in Ukraine, an effect that was further reinforced by the slight downtrend in margins. Credit risk-weighted assets increased by 8 per cent year-on-year to € 5.6 billion. This growth was due to the increase in fixed assets and higher sovereign exposure, the result of an expansion of the securities portfolio for investing excess liquidity.
Net fee and commission income remained almost unchanged on the previous year at € 131 million. The growth in income from payment transfer business, which generated an increase in income of 3 per cent or € 3 million to € 97 million, thus making the most important contribution to net fee and commission income, was due entirely to developments in Ukraine. This involved growth in both retail and corporate customers, due to an increase in customer activity, and a combination of rising numbers of accounts and transactions and higher prices. At € 25 million, income from the foreign currency, notes/coins and precious-metals business, was below the previous year's comparable period. This is the result of foreign currency loans still not being granted to private customers in Ukraine and the strong depreciation of the Belarusian rouble causing a decrease in foreign currency transactions. Net income from loan and guarantee business made an unchanged contribution of € 5 million to net fee and commission income.
Net trading income for the region rose to € 52 million mainly as a result of an increase in income from currency-based transactions in Belarus. Here, the valuation gain of € 52 million from strategic currency positions taken to hedge equity was clearly above the prior-year figure of € 2 million. The reason for this was the much stronger depreciation of the local currency against the euro of 92 per cent in the reporting period. Thereof, € 30 million was due to a US dollar position not accounted for on a hedge accounting basis on Group level. In Kazakhstan, on the other hand, valuation losses from a foreign
currency position had a negative impact on the result. Income from interest-based transactions dropped in the region by € 5 million from the prior-year period to € 4 million. Net income from governmental fixed-interest securities and bonds was lower year-on-year due to mark-to-market valuation.
Other net operating income in the segment, consisting of a number of smaller items of income and expenses, improved from minus € 6 million in the prior-year period to minus € 1 million, mainly due to the release of other provisions that had been established for a now concluded litigation in connection with real estate in Ukraine.
General administrative expenses remained unchanged from the previous year's comparable period at € 248 million overall. Staff expenses were affected by the increase in the number of employees in Ukraine due to the increase in credit and customer activity and the establishment of a transaction service center, which provides numerous clearing and other services for the local network. Other administrative expenses decreased by € 6 million to € 87 million. This improvement was related to various expense items in all countries of the region. By contrast, depreciation, amortization and writedowns on tangible and intangible fixed assets rose, mainly due to IT investment in the new core bank system in Ukraine. As a result of the decline in operating income and unchanged general administrative expenses, the cost/income ratio rose by 2.0 percentage points to 49.9 per cent.
Net provisioning for impairment losses in the region fell by 56 per cent from € 223 million to € 99 million. Net allocations to individual loan loss provisions declined by 51 per cent to € 104 million. This decline, attributable predominantly to Ukraine, included a decrease in net allocations to individual loan loss provisions of € 52 million arising from the already described change in the method of calculating interest on impaired loans. Loan loss provisions in Ukraine were also lower in all asset classes as a result of higher loan repayments and the general improvement in portfolio quality. Portfolio-based loan loss provisions produced a positive figure of € 6 million in the reporting period following a net € 12 million allocation in the same period last year. This improvement was based entirely on lower allocations to portfolio-based loan loss provisions in Ukraine where the underlying loan portfolio decreased and the quality of the portfolio improved. In Belarus, on the other hand, the difficult economic situation led to net allocations of € 23 million to corporate customer portfolio-based loan loss provisions. The proportion of non-performing loans in the total loan portfolio stood at 28.1 per cent, and continued to be the highest of all segments even though there were substantial regional differences (Belarus: 2.2 per cent, Ukraine: 33.9 per cent).
Other results fell by € 26 million from the prior-year period to minus € 8 million attributable mainly to the drop in net income from financial investments, which fell from € 18 million to minus € 8 million. Here, the valuation gains on the fixed-interest portfolio of Ukrainian government bonds at fair value decreased year-on-year due to wider spreads and rising yields.
Income taxes for the segment rose to € 38 million; the tax rate decreased by 7 percentage points to 27 per cent due to more favorable tax regulations introduced in Belarus in 2011.
Profit after non-controlling interests rose by 155 per cent to € 94 million.
Below is a detailed overview of the individual countries in this segment, whereby Kazakhstan is not listed as it is of minor significance:
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 61 | 62 | (1.9)% | 19 | 21 | (6.5)% |
| Net fee and commission income | 36 | 40 | (9.6)% | 12 | 11 | 9.8% |
| Net trading income | 47 | 6 | >500.0% | 6 | 36 | (83.7)% |
| Other net operating income | 0 | 0 | – | 0 | 0 | – |
| Operating income | 144 | 109 | 32.1% | 37 | 67 | (45.0)% |
| General administrative expenses | (43) | (47) | (8.6)% | (14) | (13) | 6.3% |
| Operating result | 101 | 62 | 62.9% | 23 | 55 | (57.0)% |
| Net provisioning for impairment losses | (21) | (6) | 233.3% | (12) | 3 | – |
| Other results | 0 | 0 | – | 0 | 0 | – |
| Profit before tax | 80 | 56 | 44.0% | 12 | 58 | (79.6)% |
| Income taxes | (20) | (17) | 15.4% | (5) | (12) | (59.3)% |
| Profit after tax | 61 | 39 | 56.5% | 7 | 46 | (85.0)% |
| Profit attributable to non-controlling | ||||||
| interests | (8) | (5) | 44.7% | (1) | (4) | (79.4)% |
| Profit after non-controlling interests | 53 | 33 | 58.4% | 6 | 41 | (85.6)% |
| Assets | 1,347 | 1,327 | 1.5% | 1,347 | 1,282 | 5.0% |
| Loans and advances to customers | 874 | 1,004 | (12.9)% | 874 | 911 | (4.0)% |
| hereof corporate % | 65.9% | 54.7% | 11.2 PP | 65.9% | 63.9% | 2.0 PP |
| hereof retail % | 34.1% | 45.3% | (11.2) PP | 34.1% | 36.1% | (2.0) PP |
| hereof foreign currency % | 58.4% | 59.9% | (1.5) PP | 58.4% | 59.0% | (0.6) PP |
| Deposits from customers | 754 | 740 | 1.9% | 754 | 746 | 1.0% |
| Loan/deposit ratio | 116.0% | 135.7% | (19.7) PP | 116.0% | 122.1% | (6.1) PP |
| Return on equity before tax | 66.6% | 40.7% | 25.9 PP | 49.3% | 160.4% | (111.1) PP |
| Return on equity after tax | 50.5% | 28.4% | 22.1 PP | 28.6% | 126.7% | (98.1) PP |
| Cost/income ratio | 29.8% | 43.1% | (13.3) PP | 36.6% | 18.9% | 17.7 PP |
| Number of employees as of reporting date |
2,234 | 2,175 | 2.7% | 2,234 | 2,220 | 0.6% |
| Business outlets | 96 | 96 | – | 96 | 99 | (3.0)% |
| Number of customers | 797,017 | 843,542 | (5.5)% | 797,017 | 808,277 | (1.4)% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 251 | 304 | (17.5)% | 92 | 80 | 15.2% |
| Net fee and commission income | 95 | 90 | 5.6% | 35 | 31 | 11.8% |
| Net trading income | 7 | 15 | (51.4)% | 2 | 1 | 126.2% |
| Other net operating income | (1) | (6) | (76.9)% | 1 | (1) | – |
| Operating income | 351 | 402 | (12.7)% | 130 | 112 | 16.8% |
| General administrative expenses | (205) | (200) | 2.7% | (69) | (67) | 3.6% |
| Operating result | 146 | 203 | (27.9)% | 61 | 44 | 36.8% |
| Net provisioning for impairment losse | (78) | (216) | (63.9)% | (16) | (24) | (33.3)% |
| Other results | (8) | 18 | – | (12) | (1) >500.0% | |
| Profit before tax | 60 | 6 | >500.0% | 33 | 20 | 65.0% |
| Income taxes | (18) | (4) | 310.0% | (8) | (6) | 32.8% |
| Profit after tax | 42 | 1 | >500.0% | 25 | 14 | 77.9% |
| Profit attributable to non-controlling | >500.0 | |||||
| interests | 3 | 0 | % | 1 | 2 | (57.5)% |
| Profit after non-controlling | ||||||
| interests | 46 | 2 | >500.0% | 26 | 17 | 58.4% |
| Assets | 5,341 | 5,446 | (1.9)% | 5,341 | 5,168 | 3.3% |
| Loans and advances to customers | 4,158 | 4,308 | (3.5)% | 4,158 | 3,845 | 8.1% |
| hereof corporate % | 49.9% | 44.7% | 5.2 PP | 49.9% | 47.5% | 2.4 PP |
| hereof retail % | 50.1% | 55.3% | (5.2) PP | 50.1% | 52.5% | (2.4) PP |
| hereof foreign currency % | 58.0% | 66.5% | (8.5) PP | 58.0% | 62.5% | (4.5) PP |
| Deposits from customers | 2,543 | 2,573 | (1.1)% | 2,543 | 2,519 | 1.0% |
| Loan/deposit ratio | 163.5% | 167.4% | (4.0) PP | 163.5% | 152.6% | 10.8 PP |
| Return on equity before tax | 10.6% | 1.1% | 9.5 PP | 17.5% | 10.7% | 6.9 PP |
| Return on equity after tax | 7.4% | 0.2% | 7.2 PP | 13.5% | 7.6% | 5.9 PP |
| Cost/income ratio | 58.4% | 49.6% | 8.7 PP | 53.3% | 60.1% | (6.8) PP |
| Number of employees as of | ||||||
| reporting date | 15,528 | 15,363 | 1.1% | 15,528 | 15,467 | 0.4% |
| Business outlets | 917 | 934 | (1.8)% | 917 | 922 | (0.5)% |
| Number of customers | 3,402,385 | 4,705,943 | (27.7)% | 3,402,385 | 3,389,355 | 0.4% |
| In € million | 1/1-30/9 2011 |
1/1-30/9 2010 |
Change | Q3/2011 | Q2/2011 | Change |
|---|---|---|---|---|---|---|
| Net interest income | 309 | 274 | 12.9% | 110 | 103 | 7.5% |
| Net fee and commission income | 132 | 115 | 14.1% | 46 | 44 | 4.4% |
| Net trading income | 8 | 13 | (43.1)% | 3 | 0 | – |
| Other net operating income | 4 | 1 | 348.2% | 1 | 2 | (31.9)% |
| Operating income | 452 | 403 | 12.1% | 161 | 149 | 7.9% |
| General administrative expenses | (102) | (102) | (0.2)% | (31) | (38) | (18.0)% |
| Operating result | 350 | 301 | 16.3% | 129 | 111 | 16.9% |
| Net provisioning for impairment losses | (36) | (70) | (48.5)% | (17) | (8) | 105.1% |
| Other results | (6) | 8 | – | (6) | (2) | 170.5% |
| Profit before tax | 308 | 239 | 28.9% | 107 | 100 | 6.5% |
| Income taxes | (63) | (56) | 13.4% | (20) | (20) | (0.5)% |
| Profit after tax | 245 | 183 | 33.6% | 87 | 80 | 8.2% |
| Profit attributable to non-controlling interests |
0 | 0 | – | 0 | 0 | – |
| Profit after non-controlling interests | 245 | 183 | 33.5% | 87 | 80 | 8.2% |
| Share of profit before tax | 21.4% | 19.3% | 2.1 PP | 13.8% | 16.1% | (2.3) PP |
| Risk-weighted assets (credit risk) | 14,610 | 15,407 | (5.2)% | 14,610 | 15,383 | (5.0)% |
| Total own funds requirement | 1,229 | 1,277 | (3.7)% | 1,229 | 1,267 | (3.0)% |
| Assets | 21,596 | 23,457 | (7.9)% | 21,596 | 20,689 | 4.4% |
| Liabilities | 15,056 | 14,150 | 6.4% | 15,056 | 13,863 | 8.6% |
| Net interest margin | 1.91% | 1.62% | 0.29 PP | 2.08% | 1.99% | 0.09 PP |
| NPL ratio | 3.6% | 4.2% | (0.5) PP | 3.6% | 4.3% | (0.6) PP |
| Coverage ratio | 75.5% | 51.9% | 23.6 PP | 75.5% | 69.0% | 6.5 PP |
| Cost/income ratio | 22.6% | 25.4% | (2.8) PP | 19.5% | 25.6% | (6.1) PP |
| Net provisioning ratio (average risk weighted assets, credit risk) |
0.31% | 0.57% | (0.25) PP | 0.45% | 0.21% | 0.24 PP |
| Average equity | 1,654 | 1,598 | 3.5% | 1,654 | 1,728 | (4.3)% |
| Return on equity before tax | 24.8% | 19.9% | 4.9 PP | 25.3% | 23.0% | 2.3 PP |
Profit before tax for this segment rose by 29 per cent in the first three quarters of 2011 to € 308 million compared to the previous year's period. The robust business model led to higher operating income and lower net provisioning for impairment losses. The return on equity before tax improved by 4.9 percentage points to 24.8 per cent.
Net interest income grew by 13 per cent or € 35 million to € 309 million. This growth was primarily due to an increase in the margins on asset-side business with Austrian and West European corporate customers of RBI AG, as low margin business was steadily replaced with more profitable lending business. Overall business volumes declined, however, due to the reticent demand for credit and the strong competitive pressure in corporate customer business. The branches in China and Malaysia increased their contribution to net interest income by expanding their business activities to € 68 million. Net interest income at the Maltese subsidiary was also up by € 7 million due to an increase in business volumes and improved margins. The net interest margin for the Group corporates segment rose 29 basis points to 1.91 per cent. Total assets contracted year-on-year by 8 per cent or € 1.9 billion to € 21.6 billion, partly due to the transfer of the funding for the Austrian Raiffeisen Leasing Group to RZB. Credit risk-weighted assets decreased by 5 per cent to € 14.6 billion. Despite the reduction in total exposure, there was an increase in the volume of approved credit lines at RBI AG.
Net fee and commission income rose by 14 per cent or € 17 million to € 132 million. At Group headquarters the increase resulted from stepping up sales of equity- and liquidity-saving products and investment banking products. Furthermore, export financing transactions posted an increase in income. The Group unit in the USA improved its net fee and commission income, mainly from loan and guarantee business, to € 13 million.
Net trading income declined virtually by half to € 8 million. This drop was largely confined to the profit centers at Group headquarters and was attributable to valuation gains on currency and interestbased transactions in a range of financial instruments.
At € 102 million, general administrative expenses in the segment remained virtually unchanged from the previous year's figure. The increase in unit costs at RBI AG was offset by the change in the allocation method for Group headquarters costs made in 2010. The segment consisted of eight business outlets at the end of the reporting period. The cost/income ratio improved by 2.8 percentage points to 22.6 per cent.
Net provisioning for impairment losses fell from € 70 million to € 36 million. This decline was principally due to lower net allocations to individual loan loss provisions for loans and advances to corporate customers at Group headquarters, a result of the improved credit environment and a release of quite a large individual provision. RBI AG's branches in China and the Group unit in the USA also posted lower net provisioning for impairment losses. The share of non-performing loans in the loan portfolio was 3.6 per cent at the end of the reporting period and therefore relatively low compared with the other segments.
Other results fell year-on-year by € 14 million to minus € 6 million. This decline was primarily the result of mark-to-market valuations of various corporate bonds in the portfolio. Due to the deconsolidation of a leasing company for materiality reasons, the segment reported a net loss from disposal of group assets of € 1 million.
Income taxes increased by € 7 million year-on-year to € 63 million. The tax rate was down by 2 percentage points to 21 per cent, compared with the previous year's period, while profit after noncontrolling interests rose by 34 per cent to € 245 million.
| 1/1-30/9 | 1/1-30/9 | Change | Q3/2011 | Q2/2011 | Change | |
|---|---|---|---|---|---|---|
| In € million | 2011 | 2010 | ||||
| Net interest income | 171 | 212 | (19.6)% | 62 | 58 | 6.3% |
| Net fee and commission income | 91 | 75 | 21.9% | 26 | 34 | (24.2)% |
| Net trading income | 89 | 61 | 44.7% | (2) | 20 | – |
| Other net operating income | 23 | 18 | 29.6% | 7 | 9 | (23.6)% |
| Operating income | 374 | 366 | 2.0% | 93 | 122 | (23.7)% |
| General administrative expenses | (197) | (172) | 14.7% | (71) | (65) | 9.7% |
| Operating result | 176 | 194 | (9.3)% | 22 | 57 | (61.5)% |
| Net provisioning for impairment losses | (8) | (1) | >500.0% | 1 | (3) | – |
| Other results | (66) | (40) | 66.2% | (113) | (4) >500.0% | |
| Profit/loss before tax | 102 | 153 | (33.6)% | (90) | 50 | – |
| Income taxes | (30) | (38) | (21.6)% | 18 | (12) | – |
| Profit/loss after tax | 72 | 116 | (37.6)% | (72) | 38 | – |
| Profit attributable to non-controlling | ||||||
| interests | (1) | (1) | (6.4)% | 0 | 0 | (11.1)% |
| Profit/loss after non-controlling | ||||||
| interests | 71 | 115 | (37.8)% | (72) | 37 | – |
| Share of profit before tax | 7.1% | 12.4% | (5.3) PP | (11.6)% | 6.4% | (18.0) PP |
| Risk-weighted assets (credit risk) | 5,835 | 5,967 | (2.2)% | 5,835 | 6,151 | (5.1)% |
| Total own funds requirement | 1,277 | 1,142 | 11.9% | 1,277 | 996 | 28.3% |
| Assets | 28,565 | 37,180 | (23.2)% | 28,565 | 24,578 | 16.2% |
| Liabilities | 27,742 | 36,426 | (23.8)% | 27,742 | 22,802 | 21.7% |
| Net interest margin | 0.83% | 0.65% | 0.18 PP | 0.94% | 0.87% | 0.07 PP |
| NPL ratio1 | 10.2% | 4.0% | 6.3 PP | 10.2% | 1.2% | 9.0 PP |
| Coverage ratio | 88.0% | >100% | – | 88.0% | 87.7% | 0.3 PP |
| Cost/income ratio | 52.9% | 47.0% | 5.8 PP | 76.3% | 53.1% | 23.2 PP |
| Net provisioning ratio (average risk weighted assets, credit risk) |
0.19% | 0.01% | 0.18 PP | (1.43)% | 0.25% | (1.68) PP |
| Average equity | 1,478 | 1,694 | (12.7)% | 1,881 | 1,403 | 34.1% |
| Return on equity before tax | 9.2% | 12.1% | (2.9) PP | – | 13.9% | 12.2 PP |
| Business outlets | 4 | 4 | – | 4 | 4 | – |
1 Due to the nature of the business the calculation of the NPL ratio in the Group markets is based on total loans.
Profit before tax in the Group markets segment fell during the reporting period by 34 per cent to € 102 million. The main reason for this result was significantly lower other net income as a result of the valuation of derivative financial instruments at a time when operating income remained stable year-onyear. The return on equity before tax fell by 2.9 percentage points to 9.2 per cent.
Net interest income fell by 20 per cent year-on-year to € 171 million, primarily due to a reduction in holdings of European bank securities in the Capital markets head office profit center. Other factors contributing to this decline were maturities and redemptions in the high-quality security portfolio, which consists exclusively of securities with top ratings. The high-quality security portfolio generated income in the reporting period of € 67 million, compared to € 119 million in the prior-year period. The RBI AG investment portfolio has now been structured even more conservatively under the influence of the European debt crisis. The Financial institutions & sovereigns profit center posted a significant decline in business volume due to redemptions and selective transaction selection, which, in turn, led to lower net interest income.
Total assets in this segment fell by 23 per cent year-on-year to € 28.6 billion, due mainly to a reduction in credit business with financial institutions. As a result, loans and advances to banks at RBI AG fell by 9 per cent to € 33.5 billion. Another reason for the contraction in total assets was the gradual reclassification of some of the assets to the Corporate center segment in 2010. This reclassification occurred as part of an internal reorganization with the aim of separating Treasury activities from those of Capital markets. The net interest margin of the segment was up 18 basis points to 0.83 per cent. Credit risk-weighted assets decreased by 2 per cent from € 6.0 billion to € 5.8 billion. This development was also the result of transferring some of the volumes to the Corporate center segment. The statutory reserves held at the Austrian National Bank, which carry a very low weighting, were one of the items affected by this shift. In addition, there was also a decline in credit risk-weighted assets at the Capital markets profit center, caused by the reduction in money market and securities exposure to financial institutions, predominantly in the UK, Germany and the Netherlands. The Financial institutions & sovereigns profit center was generally affected by a contraction in business volumes during the period under review.
Net fee and commission income for the segment was up 22 per cent to € 91 million versus the prioryear period. The improved results from credit default swaps connected with increased hedging and trading activities, contributed to the year-on-year increase at the Capital markets profit center. Despite stagnation on the institutional market for new issues, the Financial institutions & sovereigns profit center reported a rise in income from issuing business in the Italian market and in net fee and commission income resulting from the successful placement of issues by Austrian banks. The private banking and asset management division of the subsidiary Kathrein & Co. Privatgeschäftsbank AG in Vienna continued to make a stable contribution from its securities business totaling € 13 million. The Mergers & Acquisitions business also increased its contribution to net fee and commission income to € 9 million, while net fee and commission income of Raiffeisen Centrobank Group also rose to € 16 million, partly generated by income from support provided to corporate customers with primary market transactions, though it was not possible to complete a number of transactions in view of the difficult situation on the financial markets.
Net trading income in the segment rose by 45 per cent to € 89 million in the period under review. Raiffeisen Centrobank made a substantial contribution to this with € 36 million (up 6 per cent) which consisted primarily of net income from valuation gains on certificates issued in the context of equity
and index-based transactions and on structured bonds. At the Capital markets profit center, valuation gains of € 31 million came from proprietary trading in fixed-interest financial instruments as well as from structured products. Market-maker revenues from customer and proprietary trading in foreign currency and fixed income products also made a solid and stable contribution to results. A further € 22 million came from the Financial institutions & sovereigns profit center. Finally, income from bank note and coin trading improved to € 15 million. The valuation of capital guarantees given improved to minus € 14 million compared to minus € 34 million in the prior-year period.
Other net operating income showed a year-on-year increase of € 5 million to € 23 million. This includes higher income from the operations of Raiffeisen Centrobank Group, amounting to € 11 million, which was generated predominantly from commodity trading by the special companies in the USA and Switzerland. The commodity trading of F.J. Elsner Group contributed a further € 9 million to this figure.
General administrative expenses of the Group markets segment increased year-on-year by 15 per cent to € 197 million. This increase in costs resulted primarily from an IT system for derivative financial instruments which went into full service, as well as the introduction of an IT application in RBI AG's custody division. Furthermore, transportation costs rose due to the expansion of the bank note and coin trading business of RBI AG. A rise in business activities also led to a year-on-year increase in the unit costs passed on for the settlement business of Raiffeisen Service Center GmbH (RSC). The increase in the segment's general administrative expenses was mitigated somewhat by the change in the cost allocation at RBI AG that resulted from the merger in 2010. The segment consisted of four business outlets at the end of the period under review. Due to the rise in general administrative expenses, the cost/income ratio increased by 5.8 percentage points to 52.9 per cent.
Net provisioning for impairment losses was € 8 million, confined entirely to the Financial institutions & sovereigns profit center and related to single financial institutions in Denmark and Bahrain. Nonperforming loans made up 0.7 per cent of the segment's total credit exposure.
Other results fell during the period under review by 66 per cent to minus € 66 million. As in the prioryear period, net income from derivatives at the Capital markets head office profit center was negative, being generated from valuation losses on various interest hedging transactions that were mainly entered into as a hedge against risks associated with a decline in long-term interest rates. Net income from financial investments fell as a result of valuation losses on the securities portfolio and the CDS transactions concluded when risks were taken on from the Credit investments profit center. These were devalued due to high market fluctuations, especially in the third quarter.
By contrast, there was a year-on-year increase in income taxes to € 30 million. The segment's tax rate was 29 per cent, up 4 percentage points year-on-year, while profit after non-controlling interests fell by 38 per cent to € 71 million.
| 1/1-30/9 1/1-30/9 Change Q3/2011 Q2/2011 |
|
|---|---|
| In € million 2011 2010 |
Change |
| Net interest income 349 205 69.9% 31 258 |
(87.9)% |
| Net fee and commission income (41) (12) 229.8% (20) |
(9) 123.8% |
| Net trading income 49 38 29.5% 34 |
41 (16.7)% |
| Other net operating income 18 102 (82.1)% 3 |
27 (88.3)% |
| Operating income 376 333 12.7% 49 317 |
(84.7)% |
| General administrative expenses (205) (233) (12.1)% (69) |
(67) 3.3% |
| Operating result 171 101 70.2% (20) 250 |
– |
| Net provisioning for impairment losses 60 (5) – 60 |
0 – |
| Other results 93 44 109.8% 83 |
36 132.9% |
| Profit before tax 324 140 132.2% 123 286 |
(57.0)% |
| Income taxes 23 95 (76.0)% (2) |
4 – |
| (58.4)% | |
| Profit after tax 347 235 47.7% 120 289 |
|
| Profit attributable to non-controlling interests (1) (1) 43.5% 2 |
(3) – |
| Profit after non-controlling interests 346 234 47.7% 123 287 |
(57.2)% |
| Share of profit before tax 22.6% 11.3% 11.3 PP 15.9% 37.0% |
(21.1) PP |
| Risk-weighted assets (credit risk) 17,687 19,203 (7.9)% 17,687 15,876 |
11.4% |
| Total own funds requirement 1,510 1,574 (4.0)% 1,510 1,355 |
11.4% |
| Assets 52,695 40,655 29.6% 52,695 45,956 |
14.7% |
| Liabilities 52,527 46,102 13.9% 52,527 53,397 |
(1.6)% |
| Net interest margin 1.07% 0.73% 0.34 PP 0.25% 2.35% |
(2.10) PP |
| NPL ratio – – – – |
– – |
| Coverage ratio – – – – |
– – |
| Cost/income ratio 54.5% 69.8% (15.4) PP 142.1% 21.1% |
121.0 PP |
| Net provisioning ratio (average risk weighted assets, credit risk) (0.47)% 0.05% (0.52) PP (1.43)% 0.00% |
(1.43) PP |
| Average equity 1,881 2,147 (12.4)% 1,881 1,877 |
0.2% |
| Return on equity before tax 23.0% 8.7% 14.3 PP 26.1% |
– – |
In the Corporate center segment, profit before tax was € 324 million. The € 185 million increase yearon-year was primarily attributable to higher operating income and other results. The return on equity before tax rose by 14.3 percentage points to 23.0 per cent.
Net interest income rose by 70 per cent to € 349 million, mainly due to an increase in dividend income from Group subsidiaries in other segments. Income was negatively affected by a managementrelated net interest loss by the Treasury profit center at Group headquarters. The costs for own issues rose here because issues with lower premiums from the years before the financial crisis matured and were replaced with new issues. At the same time, a longer-term liquidity reserve was built up, resulting in rising interest expenses. In contrast, income from internal financing by the Group head office decreased slightly compared to the prior-year period. The € 23 million in costs for RBI AG's subordinated capital are reported under this segment.
The total assets in the Corporate center segment rose by 30 per cent year-on-year to € 52.7 billion. However, this development was distorted by one-time effects due to the reorganization described previously in the Group markets segment report by means of which the Treasury division was transferred from the Group markets segment to the Corporate center segment in 2010. Credit risk-weighted assets decreased – despite the significant rise in segment assets – by 8 per cent to € 17.7 billion. This was mainly the result of the low weighting given to the restructured total assets.
Net fee and commission income fell year-on-year from minus € 12 million to minus € 41 million, mainly due to commission payments by Group headquarters for country risk insurance in connection with financing abroad.
Net trading income for the Corporate center segment rose by 30 per cent to € 49 million. This increase was due primarily to the Group head office Treasury department, and resulted from liquidity management and proprietary trading in the context of balance sheet structure management. Other contributory factors were valuations on various foreign currency and interest-related financial instruments held for hedging purposes.
Other net operating income amounted to € 18 million versus € 102 million in the prior-year period. This deterioration was mainly attributable to other taxes, which were predominantly impacted by the newly introduced special bank levy in Austria that resulted in an expense of € 62 million in the period under review. As in the prior-year period, income from the Raiffeisen Data Service Center in Vienna, which provides mainly treasury services, made a positive contribution to income of € 20 million.
General administrative expenses fell by 12 per cent or € 28 million to € 205 million. They were positively impacted by the change in the cost allocation for Group headquarters in 2010 and by the better allocation and elimination of business transactions within the individual segments. The only business outlet recognized in this segment is Group headquarters.
Net provisioning for impairment losses generally played a minor role due to the intra-group nature of the segment's business activities. There was, however, a release of provisions for impairment losses of over € 60 million, largely due to the conversion of a loan into an equity participation. Because of the simultaneous amortization of this equity participation, it had no effect on the segment's overall results.
Other results doubled year-on-year to € 93 million. Net income from financial investments included in this figure decreased from € 61 million to minus € 78 million due to valuation losses on the securities portfolio, whereas net income from derivatives turned around from minus € 24 million to € 172 million. This improvement was caused by net valuations on hedging transactions for own issues, which resulted from the favorable positioning of RBI AG with regard to rising short-term interest rates. Due to the deconsolidation of a holding company for materiality reasons, the segment reported a net loss from disposal of group assets of € 1 million.
Income taxes made a positive contribution of € 23 million. This was primarily attributable to the high dividend income in this segment that is not included in the basis of taxation.
Profit after non-controlling interests rose by 48 per cent to € 346 million.
RBI is divided into the following business divisions:
Corporate customers comprises business with local and international medium and large-scale enterprises. The Financial institutions & public sector division focuses on business with customers from the financial and public sectors. Retail customers includes business with private individual customers as well as with small and medium-sized enterprises (SMEs) with annual revenues up to a maximum of € 5 million. Capital markets & treasury covers Treasury proprietary trading as well as investment banking which is undertaken only in certain Group units. Participations & other encompasses non-bankspecific activities as well as the administration of participations. It also includes other cross-division functions, particularly in the parent company RBI AG.
| 1/1-30/9/2011 | Corporate customers |
Retail customers |
Financial institutions & |
Capital markets & |
Participations & other |
Total |
|---|---|---|---|---|---|---|
| In € million | public sector | treasury | ||||
| Net interest income | 964 | 1,228 | 241 | 107 | 184 | 2,724 |
| Net fee and commission | ||||||
| income | 409 | 617 | 104 | 3 | (9) | 1,125 |
| Net trading income | 10 | 3 | 42 | 255 | (17) | 293 |
| Other net operating income | (2) | (11) | (12) | (30) | 13 | (42) |
| Operating income | 1,381 | 1,837 | 375 | 334 | 171 | 4,099 |
| General administrative | ||||||
| expenses | (458) | (1,327) | (171) | (142) | (189) | (2,287) |
| Operating result | 923 | 510 | 204 | 193 | (18) | 1,813 |
| Net provisioning for | ||||||
| impairment losses | (309) | (489) | (43) | 0 | 60 | (782) |
| Other results | (4) | 2 | (24) | 18 | 9 | 1 |
| Profit before tax | 610 | 23 | 137 | 211 | 51 | 1,032 |
| Risk-weighted assets (credit | ||||||
| risk) | 41,562 | 17,574 | 9,786 | 8,784 | 2,727 | 80,433 |
| Total own funds requirement | 3,594 | 1,762 | 856 | 1,613 | 243 | 8,068 |
| Cost/income ratio | 33.1% | 72.2% | 45.6% | 42.4% | 110.3% | 55.8% |
| Average equity | 5,048 | 2,420 | 1,184 | 1,108 | 331 | 10,091 |
| Return on equity before tax | 16.1% | 1.3% | 15.4% | 25.4% | 20.4% | 13.6% |
| 1/1-30/9/2010 | Corporate customers |
Retail customers |
Financial institutions & |
Capital markets & |
Participations & other |
Total |
|---|---|---|---|---|---|---|
| In € million | public sector | treasury | ||||
| Net interest income | 940 | 1,255 | 236 | 124 | 152 | 2,707 |
| Net fee and commission | ||||||
| income | 377 | 618 | 117 | 0 | (25) | 1,088 |
| Net trading income | 22 | 1 | 30 | 237 | (32) | 258 |
| Other net operating income | 16 | (19) | (3) | (2) | 3 | (5) |
| Operating income | 1,356 | 1,856 | 380 | 359 | 99 | 4,049 |
| General administrative | ||||||
| expenses | (425) | (1,265) | (149) | (118) | (196) | (2,153) |
| Operating result | 931 | 590 | 231 | 241 | (97) | 1,897 |
| Net provisioning for | ||||||
| impairment losses | (407) | (498) | (8) | 0 | (1) | (913) |
| Other results | 10 | 7 | 9 | 6 | (18) | 14 |
| Profit/loss before tax | 534 | 99 | 232 | 247 | (116) | 997 |
| Risk-weighted assets (credit | ||||||
| risk) | 35,684 | 16,279 | 7,138 | 8,629 | 2,780 | 70,510 |
| Total own funds requirement | 3,099 | 1,636 | 639 | 1,470 | 260 | 7,104 |
| Cost/income ratio | 31.3% | 68.2% | 39.1% | 32.8% | 197.9% | 53.2% |
| Average equity | 4,522 | 2,288 | 1,149 | 1,049 | 446 | 9,455 |
| Return on equity before tax | 15.8% | 5.8% | 27.0% | 31.4% | (34.5)% | 14.1% |
The Corporate customers division posted a sharp increase in net income in the period under review, based in particular on the performance of RBI AG and the trend in Russia. Profit before tax grew by 14 per cent to € 610 million, due primarily to a reduction in net provisioning for impairment losses from € 407 million to € 309 million and to an increase in operating income. All regions in which the division operates contributed to this increase. The strongest growth was reported in Russia where, despite heavy competition, net income more than doubled. With its national key accounts and Groupwide services in international corporate banking business, RBI AG succeeded in posting a significant increase in net income.
The strongest growth driver was the new corporate banking strategy for marketing capital and funding light products which was implemented at the beginning of the fourth quarter of 2010. Furthermore, structured M&A and project financing reported measurable improvements in Group-wide income.
Operating income grew from € 1,356 million to € 1,381 million, an increase of 2 per cent year-onyear. Growth in net interest income totaled 3 per cent and was attributable to higher business volumes, primarily involving large customers in Russia. There was an increase in net interest income at RBI AG from large customers, due to higher margins on lending business. Net fee and commission income rose by 9 per cent to € 409 million – mainly ascribable to the business performance of RBI AG, which made the largest contribution thanks to increased sales of the above mentioned capital and funding light products. Other net operating income, by contrast, remained stable year-on-year.
General administrative expenses rose by 8 per cent to € 458 million due to increased staff and IT expenses at RBI AG and in Russia. The cost/income ratio rose by 1.8 percentage points to 33.1 per cent, a result of the stronger increase in general administrative expenses in relation to operating income.
Other results turned from € 10 million to minus € 4 million due to lower net valuation gains on securities at RBI AG.
Credit risk-weighted assets rose by 16.5 per cent year-on-year to € 41.6 billion. The main reasons for this increase were the higher volumes in Russia and the use of higher default probabilities from the fourth quarter of 2010 onwards.
Return on equity before tax in the Corporate customers division rose as a result of growth in profit before tax by 0.3 percentage points to 16.1 per cent.
In the third quarter, the Retail customers division continued to be affected by the consequences of the financial crisis. It was nevertheless possible to detect a positive trend with both private individual customers and small and medium-sized enterprises. Higher lending volumes for private individual customers and a steadily growing volume of customer deposits created stability. The direct bank ZUNO, founded in 2010, brought in just under € 0.6 billion in private customer deposits in the first three quarters. The retail customer portfolio performed well in Russia and the Czech Republic, leading to an improvement in the loan/deposit ratio.
Profit before tax in the Retail customers division fell by 77 per cent to € 23 million. This development was primarily due to net provisioning for impairment losses in Hungary.
The division's operating income fell year-on-year to € 1,837 million. Net interest income remained on a par with the previous year at € 1,228 million, being negatively affected by the change in the method of calculating interest on impaired loans in the Ukraine. At € 617 million, net fee and commission income – to which Romania made the largest contribution – was marginally down year-on-year. A positive performance in operating leasing resulted in other net operating income improving to minus € 11 million.
General administrative expenses in the division rose by 5 per cent to € 1,327 million in the reporting period, due to the expansion of business outlets and infrastructure, salary adjustments in some markets and higher social security costs in Russia and Slovakia. The cost/income ratio therefore increased by 4 percentage points to 72.2 per cent.
Net provisioning for impairment losses declined slightly by 2 per cent to € 489 million. The largest net provisioning for impairment losses – primarily to individual loan loss provisions – was recorded in Hungary, Romania and the Czech Republic, while significantly lower year-on-year provisions had to be formed in other markets.
Credit risk-weighted assets rose due to volume-related factors by 8 per cent year-on-year to € 17.6 billion, mainly due to increases in the Czech Republic and Russia.
The return on equity before tax decreased to 1.3 per cent as a result of the lower profit before tax.
In the third quarter, the Financial institutions & public sector division was affected by the increasing uncertainty on international, in particular European, financial markets. This was caused by the debt restructuring rumors concerning Greece and the increasing pressure on other Southern European countries due to their difficult financial situation.
Profit before tax in the Financial institutions & public sector business division dropped by 41 per cent to € 137 million. The main reasons for this were higher net provisioning for impairment losses and lower other results, in particular lower net valuations of securities at RBI AG and in Hungary.
At € 375 million, operating income remained slightly below the figure for the previous year. Net interest income rose by 2 per cent to € 241 million, while net fee and commission income decreased by 11 per cent. Burdened by the bank levies in Austria and Hungary, other net operating income deteriorated from minus € 3 million to minus € 12 million year-on-year.
General administrative expenses were up 15 per cent to € 171 million, due almost exclusively to cost increases at Group headquarters. The cost/income ratio therefore rose by 6.5 percentage points to 45.6 per cent.
Other results turned year-on-year from € 9 million to minus € 24 million, mainly due to a negative valuation result for municipal bonds in Hungary.
Despite a reduction in exposure, the division's credit risk-weighted assets rose by 37 per cent to € 9.8 billion, primarily as a result of rating migrations and the use of higher default probabilities in analyzing the loan portfolio.
The division's return on equity before tax fell on the back of lower profit before tax by 11.6 percentage points to 15.4 per cent.
In the first three quarters of 2011, the Capital markets & treasury business division posted a pre-tax profit of € 211 million and was thereby 15 per cent beneath the previous year's comparable figure. This was due to lower operating income and higher general administrative expenses. The development of proprietary trading at RBI AG and the addition of new issues to expand the investment portfolio had a generally positive effect on operating income, although this was lower year-on-year.
The division's operating income declined by 7 per cent year-on-year to € 334 million. Net interest income also finished short of the prior-year figure at € 107 million, mainly due to lower income from the partially matured high-quality portfolio at Group headquarters. By contrast, net fee and commission income rose to € 3 million and net trading income increased by 7 per cent to € 255 million. The largest contribution came from Russia, followed by RBI AG. Other net operating income was severely affected by the bank levies in Austria and Hungary, and, as a result, fell from minus € 2 million to minus € 30 million year-on-year.
General administrative expenses increased year-on-year by 20 per cent to € 142 million due to higher IT expenses and salary adjustments. The division's cost/income ratio consequently rose by 9.6 percentage points to 42.4 per cent.
Other results rose year-on-year from € 6 million to € 18 million. This improvement was attributable to an increase in hedging activity at Group headquarters, which led to higher valuation gains on various derivative financial instruments.
The total own funds requirement went up by 10 per cent to € 1,613 million, mainly due to higher liquidity investments and increases in the own funds requirement for market risk and open foreign currency positions.
The division's return on equity before tax fell to 25.4 per cent.
The Participations & other business division posted a net profit before tax of € 51 million. Net interest income was up 21 per cent year-on-year to € 184 million. This takes into account the imputed results from the investment of equity.
Net fee and commission income rose year-on-year by € 16 million to minus € 9 million.
Other net operating income was positively influenced by results from the non-banking activities of Raiffeisen Centrobank and Raiffeisen Daten Service Center GmbH and increased from € 3 million to € 13 million.
Participations & other also includes the costs of central Group management, which increased year-onyear as a result of a change in the RBI AG cost allocation. According to internal guidelines, these costs remain in this division and are not fully assigned to other divisions.
| Notes | 1/1-30/9 | 1/1-30/9 | Change |
|---|---|---|---|
| In € million | 2011 | 2010 | |
| Interest income | 4,857 | 4,898 | (0.8)% |
| Current income from associates | 0 | (1) | – |
| Interest expenses | (2,133) | (2,190) | (2.6)% |
| Net interest income [2] |
2,724 | 2,707 | 0.6% |
| Net provisioning for impairment losses [3] |
(782) | (913) | (14.4)% |
| Net interest income after provisioning | 1,942 | 1,794 | 8.3% |
| Fee and commission income | 1,352 | 1,281 | 5.5% |
| Fee and commission expense | (228) | (193) | 17.9% |
| Net fee and commission income [4] |
1,125 | 1,088 | 3.3% |
| Net trading income [5] |
293 | 258 | 13.5% |
| Net income from derivatives and designated | |||
| liabilities [6] |
149 | (127) | – |
| Net income from financial investments [7] |
(146) | 136 | – |
| General administrative expenses [8] |
(2,287) | (2,153) | 6.2% |
| Other net operating income [9] |
(42) | (5) | >500.0% |
| Net income from disposal of group assets | (3) | 5 | – |
| Profit before tax | 1,032 | 997 | 3.5% |
| Income taxes [10] |
(272) | (144) | 88.6% |
| Profit after tax | 760 | 853 | (10.9)% |
| Profit attributable to non-controlling interests | (14) | (70) | (79.5)% |
| Consolidated profit | 745 | 783 | (4.8)% |
| Total | Group equity | Non-controlling interests |
||||
|---|---|---|---|---|---|---|
| 1/1-30/9 | 1/1-30/9 | 1/1-30/9 | 1/1-30/9 | 1/1-30/9 | 1/1-30/9 | |
| In € million | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 |
| Profit after tax | 760 | 853 | 745 | 783 | 14 | 70 |
| Exchange differences | (350) | 126 | (327) | 110 | (23) | 15 |
| hereof unrealized net gains (losses) of the period |
(327) | 0 | (327) | 0 | 0 | 0 |
| Capital hedge | 15 | (14) | 15 | (14) | 0 | 0 |
| Net gains (losses) on derivatives hedging fluctuating cash flows |
(46) | 103 | (46) | 103 | 0 | 0 |
| hereof net gains (losses) reclassified to income statement |
(46) | 0 | (46) | 0 | 0 | 0 |
| Net gains (losses) on financial assets available-for-sale |
(8) | 11 | (8) | 11 | 0 | 0 |
| hereof unrealized net gains (losses) of the period |
(2) | 0 | (2) | 0 | 0 | 0 |
| hereof net gains (losses) reclassified to income statement |
(5) | 0 | (5) | 0 | 0 | 0 |
| Sundry income and expenses directly recognized in equity |
10 | (12) | 10 | (12) | 0 | 0 |
| Other comprehensive income | (379) | 214 | (356) | 199 | (23) | 15 |
| Total comprehensive income | 380 | 1,067 | 389 | 982 | (9) | 85 |
| In € | 1/1-30/9/2011 | 1/1-30/9/2010 | Change |
|---|---|---|---|
| Earnings per share | 3.06 | 3.25 | (0.19) |
Earnings per share are obtained by dividing consolidated profit less compensation for participation capital by the average number of ordinary shares outstanding. As of 30 September 2011, the number of ordinary shares oustanding remained unchanged with 194.5 million.
There were no conversion rights or options oustanding, so undiluted earnings per share are equal to diluted earnings per share.
The figures for 2010 represent the figures according to the structure of RBI, whereas the figures for 2009 are those of Raiffeisen International.
| In € million | Q4/2010 | Q1/2011 | Q2/2011 | Q3/2011 |
|---|---|---|---|---|
| Net interest income | 871 | 884 | 897 | 943 |
| Net provisioning for impairment losses | (281) | (208) | (197) | (377) |
| Net interest income after provisioning | 590 | 676 | 700 | 566 |
| Net fee and commission income | 403 | 357 | 380 | 388 |
| Net trading income | 70 | 123 | 133 | 37 |
| Net income from derivatives and designated liabilities |
43 | 3 | 38 | 108 |
| Net income from financial investments | 1 | 25 | (13) | (158) |
| General administrative expenses | (827) | (753) | (761) | (772) |
| Other net operating income | 11 | (24) | (3) | (15) |
| Net income from disposal of group assets | 0 | (3) | 0 | 0 |
| Profit before tax | 290 | 405 | 474 | 153 |
| Income taxes | 34 | (100) | (101) | (71) |
| Profit after tax | 324 | 305 | 372 | 82 |
| Profit attributable to non-controlling interests | (20) | (35) | (27) | 48 |
| Consolidated profit | 304 | 270 | 345 | 130 |
| In € million | Q4/2009 | Q1/2010 | Q2/2010 | Q3/2010 |
|---|---|---|---|---|
| Net interest income | 712 | 859 | 921 | 927 |
| Net provisioning for impairment losses | (373) | (325) | (283) | (306) |
| Net interest income after provisioning | 339 | 534 | 639 | 621 |
| Net fee and commission income | 317 | 337 | 378 | 373 |
| Net trading income | 40 | 126 | 66 | 66 |
| Net income from derivatives and designated liabilities |
3 | (45) | (86) | 5 |
| Net income from financial investments | (2) | 141 | (88) | 84 |
| General administrative expenses | (592) | (700) | (725) | (728) |
| Other net operating income | (23) | (5) | 3 | (3) |
| Net income from disposal of group assets | 0 | 5 | 0 | 0 |
| Profit before tax | 81 | 392 | 187 | 418 |
| Income taxes | (10) | (33) | (31) | (80) |
| Profit after tax | 71 | 359 | 157 | 337 |
| Profit attributable to non-controlling interests | (15) | (25) | (18) | (26) |
| Consolidated profit | 57 | 334 | 138 | 311 |
| Assets | Notes | 30/9/2011 | 31/12/2010 | Change |
|---|---|---|---|---|
| In € million | ||||
| Cash reserve | 7,534 | 4,807 | 56.7% | |
| Loans and advances to banks | [12, 33] | 28,376 | 21,532 | 31.8% |
| Loans and advances to customers | [13, 33] | 81,321 | 75,657 | 7.5% |
| Impairment losses on loans and advances | [14] | (5,052) | (4,756) | 6.2% |
| Trading assets | [15, 33] | 11,109 | 8,068 | 37.7% |
| Derivatives | [16, 33] | 1,273 | 1,488 | (14.4)% |
| Financial investments | [17, 33] | 18,847 | 19,631 | (4.0)% |
| Investments in associates | [33] | 5 | 5 | (0.8)% |
| Intangible fixed assets | [18] | 1,192 | 1,220 | (2.3)% |
| Tangible fixed assets | [19] | 1,427 | 1,454 | (1.8)% |
| Other assets | [20, 33] | 2,336 | 2,067 | 13.0% |
| Total assets | 148,368 | 131,173 | 13.1% |
| Equity and liabilities In € million |
Notes | 30/9/2011 | 31/12/2010 | Change |
|---|---|---|---|---|
| Deposits from banks | [21, 33] | 37,607 | 33,659 | 11.7% |
| Deposits from customers | [22, 33] | 68,936 | 57,633 | 19.6% |
| Debt securities issued | [23, 33] | 15,161 | 16,555 | (8.4)% |
| Provisions for liabilities and charges | [24, 33] | 725 | 672 | 7.9% |
| Trading liabilities | [25, 33] | 9,265 | 5,742 | 61.4% |
| Derivatives | [26, 33] | 798 | 1,264 | (36.8)% |
| Other liabilities | [27, 33] | 1,437 | 1,243 | 15.5% |
| Subordinated capital | [28] | 4,091 | 4,001 | 2.3% |
| Equity | [29] | 10,348 | 10,404 | (0.5)% |
| Consolidated equity | 8,550 | 8,251 | 3.6% | |
| Consolidated profit | 745 | 1,087 | (31.4)% | |
| Non-controlling interests | 1,052 | 1,066 | (1.3)% | |
| Total equity and liabilities | 148,368 | 131,173 | 13.1% |
| In € million | Subscribed capital |
Participation capital |
Capital reserves |
Retained earnings |
Consolidated profit |
Non-controlling interests |
Total |
|---|---|---|---|---|---|---|---|
| Equity as of 1/1/2011 | 593 | 2,500 | 2,568 | 2,590 | 1,087 | 1,066 | 10,404 |
| Capital increases | 0 | 0 | 0 | 0 | 0 | 54 | 54 |
| Transferred to retained | |||||||
| earnings | 0 | 0 | 0 | 683 | (683) | 0 | 0 |
| Dividend payments | 0 | 0 | 0 | 0 | (404) | (58) | (463) |
| Total comprehensive | |||||||
| income | 0 | 0 | 0 | (356) | 745 | (9) | 380 |
| Own shares/share | |||||||
| incentive program | 0 | 0 | 3 | 0 | 0 | 0 | 3 |
| Other changes | 0 | 0 | 0 | (30) | 0 | (1) | (31) |
| Equity as of 30/9/2011 | 593 | 2,500 | 2,571 | 2,886 | 745 | 1,052 | 10,348 |
| In € million | Subscribed capital |
Participation capital |
Capital reserves |
Retained earnings |
Consolidated profit |
Non-controlling interests |
Total |
|---|---|---|---|---|---|---|---|
| Equity as of 1/1/2010 | 593 | 2,500 | 2,567 | 2,452 | 212 | 1,000 | 9,325 |
| Capital increases | 0 | 0 | 0 | 0 | 0 | 4 | 4 |
| Transferred to retained earnings |
0 | 200 | 0 | 12 | (212) | 0 | 0 |
| Dividend payments | 0 | (200) | 0 | (135) | 0 | (47) | (382) |
| Total comprehensive income |
0 | 0 | 0 | 199 | 783 | 85 | 1,067 |
| Own shares/share incentive program |
0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other changes | 0 | 0 | 0 | 44 | 0 | (5) | 39 |
| Equity as of 30/9/2010 | 593 | 2,500 | 2,567 | 2,572 | 783 | 1,038 | 10,054 |
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Cash and cash equivalents at the end of previous period | 4,807 | 6,093 |
| Effects due to the merger | 0 | 1,914 |
| Net cash from operating activities | 3,131 | (3,357) |
| Net cash from investing activities | 184 | (470) |
| Net cash from financing activities | (318) | (554) |
| Effect of exchange rate changes | (270) | 4 |
| Cash and cash equivalents at the end of period | 7,534 | 3,630 |
Internal management reporting at RBI is based on the current organizational structure. This is formed in a matrix structure i.e. directors are responsible both for individual countries and specific business activities ("country and functional responsibility" model). Within the Group, a cash generating unit is either a country or a business activity. The RBI management bodies – the Managing board and Supervisory board – take decisions that determine the resources allocated to each segment in accordance with its financial strength and profitability. Consequently the reporting criteria are an essential component in the decision-making process. The segments are also defined in accordance with IFRS 8. The reconciliation implies mainly the amounts from the elemination of intra-group results and consolidation between the segments.
The Group comprises the following segments:
| Net interest income 848 689 432 316 309 Net fee and commission income 368 272 174 131 132 Net trading income 30 26 37 52 8 Other net operating income (29) 28 (3) (1) 4 Operating income 1,218 1,016 640 498 452 General administrative expenses (708) (554) (335) (248) (102) Operating result 509 462 305 249 350 Net provisioning for impairment losses (484) (194) (21) (99) (36) Other results (12) (8) 3 (8) (6) Profit/loss before tax 13 260 287 142 308 Income taxes (55) (31) (76) (38) (63) Profit/loss after tax (42) 229 210 104 245 Profit attributable to non-controlling interests 6 (12) 0 (10) 0 Profit/loss after non-controlling interests (36) 217 210 94 245 Share of profit before tax 0.9% 18.1% 20.0% 9.9% 21.4% Risk-weighted assets (credit risk) 23,862 16,515 11,331 5,605 14,610 Total own funds requirement 2,153 1,550 1,098 541 1,229 Assets 35,608 22,630 13,975 6,758 21,596 Liabilities 32,884 19,695 12,078 5,793 15,056 Net interest margin 3.24% 4.08% 4.44% 6.17% 1.91% NPL ratio 9.1% 10.3% 5.9% 28.1% 3.6% Coverage ratio 63.3% 62.9% 107.3% 71.6% 75.5% Cost/income ratio 58.2% 54.6% 52.4% 49.9% 22.6% Net provisioning ratio (average risk-weighted assets, credit risk) 2.76% 1.56% 0.29% 2.38% 0.31% Average equity 2,774 2,018 1,259 713 1,654 Return on equity before tax 0.6% 17.2% 30.3% 26.6% 24.8% Business outlets 561 1,153 192 1,014 8 |
1/1-30/9/2011 In € million |
Central Europe |
Southeastern Europe |
Russia | CIS other | Group corporates |
|---|---|---|---|---|---|---|
| 1/1-30/9/2011 In € million |
Group markets |
Corporate center |
Reconciliation | Total |
|---|---|---|---|---|
| Net interest income | 171 | 349 | (390) | 2,724 |
| Net fee and commission income | 91 | (41) | (3) | 1,125 |
| Net trading income | 89 | 49 | 1 | 293 |
| Other net operating income | 23 | 18 | (82) | (42) |
| Operating income | 374 | 376 | (473) | 4,099 |
| General administrative expenses | (197) | (205) | 64 | (2,287) |
| Operating result | 176 | 171 | (409) | 1,813 |
| Net provisioning for impairment losses | (8) | 60 | 0 | (782) |
| Other results | (66) | 93 | 5 | 1 |
| Profit/loss before tax | 102 | 324 | (404) | 1,032 |
| Income taxes | (30) | 23 | (1) | (272) |
| Profit/loss after tax | 72 | 347 | (405) | 760 |
| Profit attributable to non-controlling interests | (1) | (1) | 4 | (14) |
| Profit/loss after non-controlling interests | 71 | 346 | (402) | 745 |
| Share of profit before tax | 7.1% | 22.6% | – | 100.0% |
| Risk-weighted assets (credit risk) | 5,835 | 17,687 | (15,011) | 80,433 |
| Total own funds requirement | 1,277 | 1,510 | (1,290) | 8,068 |
| Assets | 28,565 | 52,695 | (33,460) | 148,368 |
| Liabilities | 27,742 | 52,527 | (27,756) | 138,020 |
| Net interest margin | 0.83% | 1.07% | – | 2.61% |
| NPL ratio | 10.2% | – | – | 8.4% |
| Coverage ratio | 88.0% | – | – | 70.5% |
| Cost/income ratio | 52.9% | 54.5% | – | 55.8% |
| Net provisioning ratio (average risk-weighted assets, credit risk) |
0.19% | (0.47)% | – | 1.36% |
| Average equity | 1,478 | 1,881 | (1,687) | 10,091 |
| Return on equity before tax | 9.2% | 23.0% | – | 13.6% |
| Business outlets | 4 | 1 | – | 2,933 |
| 1/1-30/9/2010 In € million |
Central Europe |
Southeastern Europe |
Russia | CIS other | Group corporates |
|---|---|---|---|---|---|
| Net interest income | 814 | 673 | 381 | 370 | 274 |
| Net fee and commission income | 345 | 287 | 155 | 130 | 115 |
| Net trading income | 15 | 44 | 59 | 21 | 13 |
| Other net operating income | (44) | 29 | (14) | (6) | 1 |
| Operating income | 1,130 | 1,034 | 581 | 516 | 403 |
| General administrative expenses | (637) | (543) | (302) | (247) | (102) |
| Operating result | 493 | 491 | 279 | 268 | 301 |
| Net provisioning for impairment losses | (305) | (227) | (83) | (223) | (70) |
| Other results | 6 | (1) | (13) | 18 | 8 |
| Profit before tax | 194 | 263 | 184 | 64 | 239 |
| Income taxes | (44) | (35) | (46) | (22) | (56) |
| Profit after tax | 150 | 228 | 138 | 42 | 183 |
| Profit attributable to non-controlling interests | (43) | (16) | 0 | (6) | 0 |
| Profit after non-controlling interests | 106 | 212 | 138 | 37 | 183 |
| Share of profit before tax | 15.7% | 21.3% | 14.9% | 5.2% | 19.3% |
| Risk-weighted assets (credit risk) | 22,482 | 15,818 | 8,442 | 5,181 | 15,407 |
| Total own funds requirement | 2,056 | 1,473 | 897 | 500 | 1,277 |
| Assets | 33,471 | 22,435 | 12,013 | 6,846 | 23,457 |
| Liabilities | 30,736 | 19,618 | 10,229 | 5,890 | 14,150 |
| Net interest margin | 3.23% | 3.89% | 4.14% | 7.29% | 1.62% |
| NPL ratio | 8.0% | 7.5% | 11.2% | 24.5% | 4.2% |
| Coverage ratio | 56.5% | 66.9% | 86.6% | 73.8% | 51.9% |
| Cost/income ratio | 56.4% | 52.5% | 52.0% | 47.9% | 25.4% |
| Net provisioning ratio (average risk-weighted assets, credit risk) |
1.87% | 1.88% | 1.40% | 5.65% | 0.57% |
| Average equity | 2,594 | 1,954 | 1,079 | 661 | 1,598 |
| Return on equity before tax | 10.0% | 17.9% | 22.7% | 12.9% | 19.9% |
| Business outlets | 551 | 1,171 | 199 | 1,030 | 8 |
| 1/1-30/9/2010 In € million |
Group markets |
Corporate center |
Reconciliation | Total |
|---|---|---|---|---|
| Net interest income | 212 | 205 | (223) | 2,707 |
| Net fee and commission income | 75 | (12) | (7) | 1,088 |
| Net trading income | 61 | 38 | 6 | 258 |
| Other net operating income | 18 | 102 | (90) | (5) |
| Operating income | 366 | 333 | (314) | 4,049 |
| General administrative expenses | (172) | (233) | 84 | (2,153) |
| Operating result | 194 | 101 | (230) | 1,897 |
| Net provisioning for impairment losses | (1) | (5) | 0 | (913) |
| Other results | (40) | 44 | (9) | 14 |
| Profit/loss before tax | 153 | 140 | (239) | 997 |
| Income taxes | (38) | 95 | 0 | (144) |
| Profit/loss after tax | 116 | 235 | (239) | 853 |
| Profit attributable to non-controlling interests | (1) | (1) | (3) | (70) |
| Profit/loss after non-controlling interests | 115 | 234 | (242) | 783 |
| Share of profit before tax | 12.4% | 11.3% | – | 100.0% |
| Risk-weighted assets (credit risk) | 5,967 | 19,203 | (21,988) | 70,510 |
| Total own funds requirement | ||||
| 1,142 | 1,574 | (1,815) | 7,104 | |
| Assets | 37,180 | 40,655 | (32,979) | 143,079 |
| Liabilities | 36,426 | 46,102 | (30,128) | 133,024 |
| Net interest margin | 0.65% | 0.73% | – | 2.48% |
| NPL ratio | 4.0% | – | – | 8.8% |
| Coverage ratio | >100% | – | – | 64.0% |
| Cost/income ratio | 47.0% | 69.8% | – | 53.2% |
| Net provisioning ratio (average risk-weighted assets, credit risk) |
0.01% | 0.05% | – | 1.69% |
| Average equity | 1,694 | 2,147 | (2,271) | 9,455 |
| Return on equity before tax | 12.1% | 8.7% | – | 14.1% |
The consolidated financial statements of RBI are prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) and the international accounting standards adopted by the EU on the basis of IAS Regulation (EC) 1606/2002 including the applicable interpretations of the International Financial Reporting Interpretations Committee (IFRIC/SIC).
The interim report as of 30 September 2011 is prepared in accordance with IAS 34. In the interim reporting, the same recognition and measurement principles and consolidation methods are applied as in the preparation of the consolidated financial statements 2010 (compare annual report 2010, page 150 ff.). Standards and interpretations to be applied in the EU as from 1 January 2011 on were applied in this interim report.
From the second quarter 2011 onwards, RBI has started to use portfolio fair value hedge accounting to hedge interest rate risk at the portfolio level. Individual transactions or groups of transactions with a similar risk structure are grouped by maturity bands in accordance with the expected repayment and interest adjustment dates in a portfolio. Portfolios can consist solely of assets or of liabilities or of both. In this type of hedge accounting the changes in fair value of the underlying transactions are recognized on both sides of the balance sheet as a separate asset and liability item. The hedged amount of the underlying transactions is determined in the consolidated financial statements exclusive of sight or savings deposits (therefore the EU carve-out regulations are not utilized).
Credit risk is accounted for by allocating individual loan loss provisions and portfolio-based loan loss provisions. The valuation models applied require an estimate of expected future cash flows. For porfolio-based loan loss provisions this is done based on loss experience history for the loans in the respective loan portfolio whereby the parameters inherent in the relevant estimates are subject to compatibility with existing group standards. These estimates are adapted if by doing this an improvement within the existing framework can be achieved. However, inter-annual impacts on income statement due to such refinings may also offset each other and are immaterial on group level.
In the previous year the corporate customer business and all associated equity participations of Raiffeisen Zentralbank were merged with Raiffeisen International into Raiffeisen Bank International. The comparable figures in this report represent the figures based on the structure of Raiffeisen Bank International according to the retrospective implementation of the merger as of 1 January 2010.
The interim report for the third quarter 2011 of RBI did not undergo a complete audit, neither did it undergo an audit inspection carried out by a certified auditor (framework prime market of the Vienna Stock Exchange).
| Rates in units per € | 2011 | 2010 | ||
|---|---|---|---|---|
| As of 30/9 | Average as of 1/1-30/9 |
As of 31/12 | Average as of 1/1-30/9 |
|
| Albanian lek (ALL) | 140.950 | 140.606 | 138.770 | 137.849 |
| Belarusian rouble (BYR) | 7,638.160 | 5,741.360 | 3,972.600 | 3,923.652 |
| Bosnian marka (BAM) | 1.956 | 1.956 | 1.956 | 1.956 |
| Great Britain pound (GBP) | 0.867 | 0.875 | 0.861 | 0.859 |
| Bulgarian lev (BGN) | 1.956 | 1.956 | 1.956 | 1.956 |
| Kazakh tenge (KZT) | 201.720 | 206.009 | 195.230 | 195.443 |
| Croatian kuna (HRK) | 7.500 | 7.424 | 7.383 | 7.268 |
| Moldovan leu (MDL) | 16.225 | 16.528 | 16.105 | 16.524 |
| Lithuanian litas (LTL) | 3.453 | 3.453 | 3.453 | 3.453 |
| Polish zloty (PLN) | 4.405 | 4.032 | 3.975 | 4.014 |
| Romanian leu (RON) | 4.358 | 4.213 | 4.262 | 4.202 |
| Russian rouble (RUB) | 43.350 | 40.778 | 40.820 | 40.129 |
| Swedish krona (SEK) | 9.258 | 8.998 | 8.966 | 9.667 |
| Swiss franc (CHF) | 1.217 | 1.237 | 1.250 | 1.400 |
| Serbian dinar (RSD) | 101.173 | 102.088 | 105.498 | 101.762 |
| Singapore dollar (SGD) | 1.759 | 1.760 | 1.714 | 1.832 |
| Czech koruna (CZK) | 24.754 | 24.435 | 25.061 | 25.506 |
| Turkish lira (TRY) | 2.510 | 2.297 | 2.069 | 2.016 |
| Ukrainian hryvnia (UAH) | 10.855 | 11.195 | 10.573 | 10.518 |
| Hungarian forint (HUF) | 292.550 | 272.022 | 277.950 | 275.462 |
| US dollar (USD) | 1.350 | 1.410 | 1.336 | 1.327 |
| Number of units | Fully consolidated Equity method |
|||
|---|---|---|---|---|
| 30/9/2011 | 31/12/2010 | 30/9/2011 | 31/12/2010 | |
| As of beginning of period | 132 | 135 | 1 | 1 |
| Included in the course of merger | 0 | 38 | 0 | 0 |
| Included for the first time in the financial period | 5 | 6 | 0 | 0 |
| Excluded in the financial period | (5) | (47) | 0 | 0 |
| As of end of period | 132 | 132 | 1 | 1 |
In the reporting period, the following subsidiaries were included as of 1 January 2011 for the first time: RIRE Holding GmbH, Vienna, a real estate holding company and OOO "R3" Novosibirsk, a real estate management company. The real estate leasing company Viktor Property, s.r.o., Prague, was included for the first time as of 1 April 2011. In July 2011 Raiffeisen Investment Financial Advisory Services Ltd. Co., Istanbul, an investment company, was included. The real estate leasing company S.C. PLUSFINANCE ESTATE 1 S.R.L., Bucarest was integrated for the first time as of September 2011. In the reporting period, 5 subsidiaries were excluded as of 1 January 2011due to immateriality.
The following table shows the income statement according to IAS 39 measurement categories:
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Net income from financial assets and liabilities held-for-trading | 484 | 308 |
| Net income from financial assets and liabilities at fair value through profit | ||
| or loss | 210 | 215 |
| Net income from financial assets available-for-sale | (44) | 11 |
| Net income from loans and advances | 3,255 | 3,111 |
| Net income from financial assets held-to-maturity | 345 | 348 |
| Net income from financial liabilities measured at acquisition cost | (2,125) | (2,100) |
| Net income from derivatives (hedging) | 2 | (9) |
| Net revaluations from exchange differences | 111 | 179 |
| Other operating income/expenses | (1,207) | (1,065) |
| Total profit before tax from continuing operations | 1,032 | 997 |
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Interest and interest-like income, total | 4,857 | 4,898 |
| Interest income | 4,814 | 4,875 |
| from balances at central banks | 44 | 70 |
| from loans and advances to banks | 336 | 391 |
| from loans and advances to customers | 3,473 | 3,475 |
| from financial investments | 591 | 539 |
| from leasing claims | 164 | 166 |
| from derivative financial instruments (non-trading), net | 206 | 234 |
| Current income | 16 | 11 |
| Interest-like income | 27 | 13 |
| Current income from associates | 0 | (1) |
| Interest expenses and interest-like expenses, total | (2,133) | (2,190) |
| Interest expenses | (2,103) | (2,156) |
| on deposits from central banks | (8) | (1) |
| on deposits from banks | (479) | (570) |
| on deposits from customers | (984) | (975) |
| on debt securities issued | (465) | (462) |
| on subordinated capital | (166) | (149) |
| Interest-like expenses | (30) | (34) |
| Total | 2,724 | 2,707 |
| In € million | ||
|---|---|---|
| 1/1-30/9/2011 | 1/1-30/9/2010 | |
| Individual loan loss provisions | (687) | (934) |
| Allocation to provisions for impairment losses | (1,121) | (1,326) |
| Release of provisions for impairment losses | 438 | 410 |
| Direct write-downs | (55) | (53) |
| Income received on written-down claims | 51 | 34 |
| Portfolio-based loan loss provisions | (101) | 19 |
| Allocation to provisions for impairment losses | (385) | (303) |
| Release of provisions for impairment losses | 285 | 322 |
| Gains from loan termination or sale | 6 | 2 |
| Total | (782) | (913) |
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Payment transfer business | 453 | 439 |
| Loan and guarantee business | 221 | 206 |
| Securities business | 93 | 95 |
| Foreign currency, notes/coins, and precious-metals business | 242 | 242 |
| Management of investment and pension funds | 20 | 19 |
| Sale of own and third party products | 32 | 32 |
| Credit derivatives business | 2 | 5 |
| Other banking services | 62 | 50 |
| Total | 1,125 | 1,088 |
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Interest-based transactions | 141 | 221 |
| Currency-based transactions | 163 | 86 |
| Equity-/index-based transactions | (4) | (10) |
| Credit derivatives business | 4 | 1 |
| Other transactions | (11) | (40) |
| Total | 293 | 258 |
The refinancing expenses for trading assets which are included in the net trading income amounted to € 74 million (comparable period: € 62 million).
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Net income from hedge accounting | 5 | (2) |
| Net income from credit derivatives | 16 | 0 |
| Net income from other derivatives | 77 | (13) |
| Net income from liabilities designated at fair value | 51 | (113) |
| Total | 149 | (127) |
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Net income from financial investments held-to-maturity | (2) | 6 |
| Net valuations of financial investments held-to-maturity | (2) | 2 |
| Net proceeds from sales of financial investments held-to-maturity | 0 | 4 |
| Net income from equity participations | (58) | 3 |
| Net valuations of equity participations | (66) | (2) |
| Net proceeds from sales of equity participations | 8 | 4 |
| Net income from securities at fair value through profit and loss | (86) | 128 |
| Net valuations of securities at fair value through profit and loss | (96) | 88 |
| Net proceeds from sales of securities at fair value through profit | ||
| and loss | 10 | 39 |
| Total | (146) | 136 |
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Staff expenses | (1,141) | (1,057) |
| Other administrative expenses | (884) | (853) |
| Depreciation of intangible and tangible fixed assets | (262) | (243) |
| Total | (2,287) | (2,153) |
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Sales revenues from non-banking activities | 683 | 575 |
| Expenses arising from non-banking activities | (652) | (553) |
| Net income from additional leasing services | 63 | 66 |
| Expenses from additional leasing services | (65) | (64) |
| Rental income from operating lease (vehicles and equipment) | 29 | 28 |
| Rental income from investment property incl. operating lease (real estate) |
16 | 7 |
| Net proceeds from disposal of tangible and intangible fixed assets | (5) | (5) |
| Other taxes | (119) | (67) |
| hereof special bank levies | (95) | (31) |
| Impairment of goodwill | (3) | 0 |
| Net expense from allocation and release of other provisions | (1) | (7) |
| Sundry operating income | 43 | 38 |
| Sundry operating expenses | (31) | (24) |
| Total | (42) | (5) |
| In € million | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Current income taxes | (245) | (220) |
| Austria | (23) | (19) |
| Foreign | (222) | (201) |
| Deferred taxes | (27) | 76 |
| Total | (272) | (144) |
The following table shows the carrying amounts according to IAS 39 measurement categories:
| Assets according to measurement categories In € million |
30/9/2011 | 31/12/2010 |
|---|---|---|
| Trading assets | 11,948 | 8,631 |
| Financial assets at fair value through profit or loss | 7,786 | 8,070 |
| Financial assets available-for-sale | 428 | 394 |
| Investments in associates | 5 | 5 |
| Loans and advances | 114,474 | 99,268 |
| Financial assets held-to-maturity | 10,674 | 11,207 |
| Derivatives (hedging) | 434 | 925 |
| Other assets | 2,619 | 2,673 |
| Total assets | 148,368 | 131,173 |
Positive fair values of derivatives not designated as hedging instruments according to IAS 39 hedge accounting are reported in the measurement category trading assets. The measurement category financial assets available-for-sale comprises other affiliated companies and other equity participations. Loans and advances are reported on a net basis after provisions for impairment losses. Other assets comprise intangible and tangible fixed assets.
| Equity and liabilities according to measurement categories In € million |
30/9/2011 | 31/12/2010 |
|---|---|---|
| Trading liabilities | 10,010 | 6,528 |
| Financial liabilities | 124,824 | 110,535 |
| Liabilities at fair value through profit and loss | 2,408 | 2,557 |
| Derivatives (hedging) | 53 | 477 |
| Provisions for liabilities and charges | 725 | 672 |
| Equity | 10,348 | 10,404 |
| Total equity and liabilities | 148,368 | 131,173 |
Negative fair values of derivatives not designated as hedging instruments according to IAS 39 hedge accounting are reported in the measurement category trading liabilities.
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Giro and clearing business | 3,767 | 1,517 |
| Money market business | 19,961 | 14,789 |
| Loans to banks | 3,386 | 3,766 |
| Purchased loans | 121 | 34 |
| Leasing claims | 1 | 1 |
| Claims evidenced by paper | 1,141 | 1,425 |
| Total | 28,376 | 21,532 |
Loans and advances to banks include € 4,224 million (31/12/2010: € 1,457 million) from repo transactions.
Loans and advances to banks classified regionally (counterparty's seat) are as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Austria | 14,592 | 10,794 |
| Foreign | 13,784 | 10,738 |
| Total | 28,376 | 21,532 |
Loans and advances to banks break down into the following bank categories:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Central banks | 1,914 | 1,484 |
| Commercial banks | 26,447 | 20,038 |
| Multilateral development banks | 15 | 10 |
| Total | 28,376 | 21,532 |
The maturities of loans and advances to banks break down as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Due at call or without maturity | 4,519 | 2,370 |
| Up to 3 months | 18,183 | 14,035 |
| More than 3 months, up to 1 year | 2,409 | 2,005 |
| More than 1 year, up to 5 years | 2,221 | 2,266 |
| More than 5 years | 1,044 | 856 |
| Total | 28,376 | 21,532 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Credit business | 53,734 | 48,764 |
| Money market business | 5,160 | 5,000 |
| Mortgage loans | 17,514 | 16,888 |
| Purchased loans | 1,323 | 1,139 |
| Leasing claims | 3,036 | 3,109 |
| Claims evidenced by paper | 554 | 757 |
| Total | 81,321 | 75,657 |
Loans and advances to customers include € 1,994 million (31/12/2010: € 111 million) from repo transactions.
Loans and advances to customers break down into asset classes according to Basel II definition as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Sovereigns | 1,344 | 1,493 |
| Corporate customers – large | 54,761 | 49,201 |
| Corporate customers – small business | 3,817 | 3,829 |
| Retail customers – private individuals | 19,008 | 18,549 |
| Retail customers – small and medium-sized entities | 2,329 | 2,441 |
| Other | 63 | 144 |
| Total | 81,321 | 75,657 |
Loans and advances to customers classified regionally (counterparty's seat) are as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Austria | 7,766 | 7,914 |
| Foreign | 73,554 | 67,743 |
| Total | 81,321 | 75,657 |
The maturities of loans and advances to customers break down as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Due at call or without maturity | 7,866 | 6,844 |
| Up to 3 months | 15,367 | 12,583 |
| More than 3 months, up to 1 year | 13,335 | 13,704 |
| More than 1 year, up to 5 years | 28,278 | 26,393 |
| More than 5 years | 16,475 | 16,133 |
| Total | 81,321 | 75,657 |
Provisions for impairment losses are allocated to the following asset classes according to the Basel II definition:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Banks | 241 | 255 |
| Sovereigns | 36 | 1 |
| Corporate customers – large | 2,522 | 2,432 |
| Corporate customers – small business | 426 | 407 |
| Retail customers – private individuals | 1,581 | 1,418 |
| Retail customers – small and medium-sized entities | 247 | 243 |
| Total | 5,052 | 4,756 |
Loans and advances and loan loss provisions according to Basel II asset classes are shown in the following table:
| 30/9/2011 In € million |
Fair value | Carrying amount |
Individually impaired assets |
Individual loan loss provisions |
Portfolio based provisions |
Net carrying amount |
|---|---|---|---|---|---|---|
| Banks | 28,317 | 28,376 | 265 | 222 | 19 | 28,135 |
| Sovereigns | 1,258 | 1,344 | 43 | 36 | 0 | 1,309 |
| Corporate customers – large |
50,602 | 54,824 | 3,817 | 2,054 | 468 | 52,302 |
| Corporate customers – small business |
3,433 | 3,817 | 678 | 393 | 33 | 3,391 |
| Retail customers – private individuals |
18,102 | 19,008 | 2,006 | 1,257 | 324 | 17,426 |
| Retail customers – small and medium sized entities |
2,194 | 2,329 | 343 | 214 | 33 | 2,082 |
| Total | 103,907 | 109,697 | 7,153 | 4,176 | 877 | 104,644 |
| 31/12/2010 In € million |
Fair value | Carrying amount |
Individually impaired assets |
Individual loan loss provisions |
Portfolio based provisions |
Net carrying amount |
|---|---|---|---|---|---|---|
| Banks | 21,270 | 21,532 | 271 | 237 | 18 | 21,277 |
| Sovereigns | 1,405 | 1,493 | 12 | 1 | 0 | 1,492 |
| Corporate customers – large |
46,229 | 49,345 | 3,598 | 2,026 | 406 | 46,913 |
| Corporate customers – small business |
3,469 | 3,829 | 670 | 376 | 32 | 3,421 |
| Retail customers – private individuals |
17,918 | 18,549 | 1,789 | 1,115 | 302 | 17,131 |
| Retail customers – small and medium sized entities |
2,379 | 2,441 | 320 | 193 | 50 | 2,198 |
| Total | 92,670 | 97,189 | 6,661 | 3,947 | 809 | 92,434 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Bonds, notes and other fixed-interest securities | 3,742 | 4,013 |
| Shares and other variable-yield securities | 262 | 430 |
| Positive fair values of derivative financial instruments | 7,086 | 3,625 |
| Call/time deposits from trading purposes | 19 | 0 |
| Total | 11,109 | 8,068 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Positive fair values of derivatives in fair value hedges (IAS 39) | 391 | 361 |
| Positive fair values of derivatives in cash flow hedges (IAS 39) | 43 | 565 |
| Positive fair values of credit derivatives | 69 | 9 |
| Positive fair values of other derivatives | 770 | 553 |
| Total | 1,273 | 1,488 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Bonds, notes and other fixed-interest securities | 18,170 | 18,957 |
| Shares and other variable-yield securities | 249 | 280 |
| Equity participations | 428 | 394 |
| Total | 18,847 | 19,631 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Goodwill | 585 | 614 |
| Software | 483 | 480 |
| Other intangible fixed assets | 124 | 126 |
| Total | 1,192 | 1,220 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Land and buildings used by the Group for own purpose | 535 | 554 |
| Other land and buildings (investment property) | 164 | 113 |
| Office furniture, equipment and other tangible fixed assets | 433 | 507 |
| Leased assets (operating lease) | 295 | 280 |
| Total | 1,427 | 1,454 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Tax assets | 496 | 494 |
| Current tax assets | 60 | 31 |
| Deferred tax assets | 436 | 463 |
| Receivables arising from non-banking activities | 97 | 140 |
| Prepayments and other deferrals | 298 | 263 |
| Clearing claims from securities and payment transfer business | 724 | 356 |
| Lease in progress | 69 | 83 |
| Assets held for sale (IFRS 5) | 6 | 5 |
| Inventories | 127 | 147 |
| Re-/Devaluation of portfolio-hedged underlyings | 6 | 0 |
| Any other business | 512 | 579 |
| Total | 2,336 | 2,067 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Giro and clearing business | 3,485 | 2,326 |
| Money market business | 24,928 | 21,168 |
| Long-term refinancing | 9,194 | 10,165 |
| Total | 37,607 | 33,659 |
Deposits from banks include € 2,268 million (31/12/2010: € 4,977 million) from repo transactions.
Deposits from banks classified regionally (counterparty's seat) break down as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Austria | 19,955 | 16,046 |
| Foreign | 17,652 | 17,613 |
| Total | 37,607 | 33,659 |
The deposits break down into the following bank segments:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Central banks | 709 | 1,399 |
| Commercial banks | 35,352 | 30,948 |
| Multilateral development banks | 1,547 | 1,311 |
| Total | 37,607 | 33,659 |
The maturities of deposits from banks break down as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Due at call or without maturity | 3,374 | 2,161 |
| Up to 3 months | 19,529 | 14,809 |
| More than 3 months, up to 1 year | 3,840 | 6,291 |
| More than 1 year, up to 5 years | 8,560 | 7,954 |
| More than 5 years | 2,304 | 2,444 |
| Total | 37,607 | 33,659 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Sight deposits | 27,100 | 23,781 |
| Time deposits | 40,565 | 32,382 |
| Savings deposits | 1,272 | 1,470 |
| Total | 68,936 | 57,633 |
Deposits from customers include € 4,814 million (31/12/2010: € 1,343 million) from repo transactions.
Deposits from customers break down analog to Basel II definition as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Sovereigns | 1,515 | 1,723 |
| Corporate customers – large | 36,609 | 26,924 |
| Corporate customers – small business | 2,370 | 2,489 |
| Retail customers – private individuals | 24,169 | 22,123 |
| Retail customers – small and medium-sized entities | 3,512 | 3,673 |
| Other | 761 | 702 |
| Total | 68,936 | 57,633 |
Deposits from customers classified regionally (counterparty's seat) are as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Austria | 6,497 | 5,719 |
| Foreign | 62,439 | 51,914 |
| Total | 68,936 | 57,633 |
The maturities of deposits from customers break down as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Due at call or without maturity | 26,421 | 24,396 |
| Up to 3 months | 23,017 | 19,402 |
| More than 3 months, up to 1 year | 13,321 | 8,648 |
| More than 1 year, up to 5 years | 3,953 | 3,116 |
| More than 5 years | 2,224 | 2,071 |
| Total | 68,936 | 57,633 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Bonds and notes issued | 13,229 | 15,917 |
| Money market instruments issued | 1,227 | 0 |
| Other debt securities issued | 706 | 638 |
| Total | 15,161 | 16,555 |
The maturities of debt securities issued break down as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Due at call or without maturity | 0 | 0 |
| Up to 3 months | 3,008 | 1,638 |
| More than 3 months, up to 1 year | 4,334 | 4,958 |
| More than 1 year, up to 5 years | 7,637 | 9,134 |
| More than 5 years | 182 | 825 |
| Total | 15,161 | 16,555 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Severance payments | 63 | 61 |
| Retirement benefits | 14 | 14 |
| Taxes | 123 | 107 |
| Contingent liabilities and commitments | 189 | 132 |
| Pending legal issues | 94 | 108 |
| Overdue vacation | 47 | 50 |
| Bonus payments | 141 | 148 |
| Restructuring | 3 | 5 |
| Other | 50 | 47 |
| Total | 725 | 672 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Negative fair values of derivative financial instruments | 7,974 | 4,531 |
| Interest-based transactions | 5,824 | 3,019 |
| Currency-based transactions | 1,357 | 923 |
| Equity-/index-based transactions | 709 | 526 |
| Credit derivatives business | 66 | 44 |
| Other transactions | 17 | 19 |
| Short-selling of trading assets | 509 | 426 |
| Call/time deposits from trading purposes | 5 | 0 |
| Certificates issued | 777 | 785 |
| Total | 9,265 | 5,742 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Negative fair values of derivatives in fair value hedges (IAS 39) | 44 | 24 |
| Negative fair values of derivatives in cash flow hedges (IAS 39) | 9 | 453 |
| Negative fair values of credit derivatives | 17 | 18 |
| Negative fair values of derivative financial instruments | 728 | 769 |
| Total | 798 | 1,264 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Liabilities from non-banking activities | 115 | 114 |
| Accruals and deferred items | 204 | 190 |
| Liabilities from dividends | 1 | 1 |
| Clearing claims from securities and payment transfer business | 663 | 405 |
| Re-/Devaluation of portfolio-hedged underlyings | 21 | 0 |
| Any other business | 432 | 533 |
| Total | 1,437 | 1,243 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Hybrid tier 1 capital | 813 | 819 |
| Subordinated liabilities | 2,647 | 2,576 |
| Supplementary capital | 632 | 606 |
| Total | 4,091 | 4,001 |
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Consolidated equity | 8,550 | 8,251 |
| Subscribed capital | 593 | 593 |
| Participation capital | 2,500 | 2,500 |
| Capital reserves | 2,571 | 2,568 |
| Retained earnings | 2,886 | 2,590 |
| Consolidated profit | 701 | 1,087 |
| Non-controlling interests | 1,097 | 1,066 |
| Total | 10,348 | 10,404 |
The subscribed capital of RBI AG as defined by the articles of incorporation amounted to € 593 million. After deduction of 943,771own shares, the stated subscribed capital totaled € 593 million.
Active risk management is one of the core competencies of RBI. In order to effectively identify, measure, and manage risks the Group has implemented a comprehensive risk management system in the past and continues to develop it. Risk management constitutes an integrated part of overall bank management. In particular, in addition to legal and regulatory requirements, it takes into account the nature, scale, and complexity of the business activities and the resulting risks. Risk management in RBI controls the exposure to and ensures professional management of all material risks.
The principles and organization of risk management are disclosed in the relevant chapters of the annual report for 2010.
Economic capital constitutes an important instrument in overall bank risk management. It sets the internal capital requirement for all risk categories being measured based on comparable internal models and thus allows for an aggregated view of the Group's risk profile. Economic capital has thus become an important instrument in overall bank risk management. It is used for making risk-adjusted business decisions and in performance measurement. For this purpose, a business unit's profit is set in relation to economic capital attributed to the unit (return on risk-adjusted capital, RoRAC). The share of individual risk types in total economic capital is shown below.
In comparison to 31 December 2010, credit risk coming from large corporate customers accounts for an increased share in economic capital. Along with other causes this is due to the rise in credit exposure in this asset class. In contrast, the credit risk of retail customers has decreased due to the improved recognition of diversification effects of retail exposures across different countries and lower expected default probabilities and losses given default in these portfolios. All in all credit risk accounts for 74 per cent of economic capital. Since the beginning of 2011 no additional economic capital has been charged for country risk (transfer risk) as this risk is correctly passed on via internal interest rates (funds transfer pricing) to the credit or deposit businesses responsible for it.
In the regional breakdown as of 30 September 2011 the largest share (30 per cent) of economic capital is allocated to Group units in Central Europe. The second largest share is allocated to Group units in Austria where in particular the head office contributes significantly to the overall risk position due to centralized functions (e.g. capital- and liquidity management) and the corporate lending business.
Credit risk within RBI stems mainly from default risks that arise from business with retail and corporate customers, other banks and sovereign borrowers. In addition, migration risks (caused by deteriorations in customers' creditworthiness), concentration risks of creditors, risks in credit risk mitigation techniques, and country risks are also considered.
Risk management is based on the credit exposure. The following table translates items of the statement of financial position (banking and trading book positions) into the maximum credit exposure. It includes exposures on and off the statement of financial position before the application of credit-conversion factors and thus represents the maximum credit exposure. It is not reduced by the effects of credit risk mitigation for example guarantees and physical collateral, effects that are, however, considered in the internal assessment of credit risks. The maximum credit exposure is used – if not explicitly stated otherwise – for showing exposures in all subsequent charts in the risk report. The main reasons for the deviation between the figures of internal portfolio-management and external accounting are different consolidation scopes (regulatory definition of credit institution group versus definition according IFRS rules), different criteria for loan volume definition and different valuation methods.
| In € million | 30/9/2011 | 31/12/20101 |
|---|---|---|
| Loans and advances to banks | 28,376 | 21,532 |
| Loans and advances to customers | 81,321 | 75,657 |
| Trading assets | 11,109 | 8,068 |
| Derivatives | 1,273 | 1,488 |
| Financial investments | 18,170 | 19,247 |
| Other assets | 204 | 227 |
| Contingent liabilities | 12,131 | 11,856 |
| Commitments | 12,517 | 11,756 |
| Revocable credit lines | 14,969 | 11,992 |
| Reconciliation | 5,855 | 6,491 |
| Total | 185,954 | 168,314 |
1 Adaption of previous year figures due to different allocation.
A more detailed credit portfolio analysis is based on individual customer ratings. Rating models in the main non-retail asset classes – corporates, financial institutions, and sovereigns – provided rank creditworthiness in ten classes. The default probabilities assigned to individual rating grades are, however, estimated for each asset class separately. In other words, the default probability of the same ordinal rating grade (e.g. financial institutions A3 and sovereigns A3) is not the same for these asset classes.
The internal rating model for corporates takes into account qualitative factors as well as several business and performance figures (e.g. interest cover, EBT margin, EBITDA margin, equity ratio, return on assets, debt amortization period), which are tailored to the various industries and financial reporting standards and ensure accuracy.
The following table provides a breakdown of the maximum credit exposure according to the internal rating of corporates. The figures shown below refer to the credit exposure: for the overall assessment of credit risk collaterals must also be taken into account.
| In € million | 30/9/2011 | Share | 31/12/2010 | Share | |
|---|---|---|---|---|---|
| 0.5 | Minimal Risk | 1,231 | 1.4% | 1,171 | 1.4% |
| 1.0 | Excellent credit standing | 8,111 | 9.0% | 7,643 | 9.4% |
| 1.5 | Very good credit standing | 8,827 | 9.8% | 7,729 | 9.6% |
| 2.0 | Good credit standing | 12,408 | 13.8% | 9,960 | 12.3% |
| 2.5 | Sound credit standing | 14,598 | 16.3% | 11,206 | 13.8% |
| 3.0 | Acceptable credit standing | 14,125 | 15.7% | 12,314 | 15.2% |
| 3.5 | Marginal credit standing | 13,663 | 15.2% | 13,183 | 16.3% |
| 4.0 | Weak credit standing/sub-standard | 7,483 | 8.3% | 7,664 | 9.5% |
| 4.5 | Very weak credit standing/doubtful | 3,822 | 4.3% | 4,282 | 5.3% |
| 5.0 | Default | 4,378 | 4.9% | 4,287 | 5.3% |
| NR | Not rated | 1,068 | 1.2% | 1,472 | 1.8% |
| Total | 89,714 | 100% | 80,911 | 100.0% |
It should be noticed that the economic rating shown in the table above shows a borrower-specific but not transactionspecific view.
The total corporate exposure increased by € 8,803 million compared with year end 2010. The growth in the segments Group corporates, Central Europe and Russia compensated decreasing exposure in the CIS other segment. The main reasons for this decreasing exposure were on the one hand the restrictive granting of new loans in Ukraine and on the other hand, the price development of foreign currencies, especially the devaluation of the Belarusian and Russian rouble.
Based on the exposure per rating grade there is a general improvement in average creditworthiness. The share in total loans of the medium rating classes 2.0 to 3.0 increased due to new loan business and credit lines as well as improved ratings by 4.5 percentage points to 45.8 per cent. In comparison to the year end 2010 this is an absolute increase of € 7,651 million. While in rating class 2.0 mainly segments Central Europe and Group markets show a rise, half of the increase in rating class 2.5 is caused by new credit lines in Russia. In rating class 3.0 the exposure increased in segment Group corporates. Comparing absolute values the lower ratings remained unchanged compared to the first quarter of 2011, the relative share, however, decreased by 3.9 percentage points to 29 per cent.
The share of credit exposure in default (rating 5.0) decreased by 0.4 percentage points. The part of the credit exposure at default was highest in the segments CIS other, Central Europe and Group corporates. Nevertheless the changes in the business year developed differently and while defaulted exposure declined in Russia, it gained in Southeastern Europe and CIS other.
The following table provides a breakdown by country of risk of the maximum credit exposure for corporate customers structured by regions:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share |
|---|---|---|---|---|
| Central Europe | 19,446 | 21.7% | 18,469 | 23.0% |
| Western Europe | 12,130 | 13.5% | 10,965 | 13.6% |
| Southeastern Europe | 11,915 | 13.3% | 11,467 | 14.0% |
| Russia | 12,806 | 14.3% | 9,719 | 12.0% |
| Austria | 17,573 | 19.6% | 16,346 | 20.2% |
| CIS other | 4,497 | 5.0% | 4,325 | 5.3% |
| Asia | 7,775 | 8.7% | 5,690 | 7.0% |
| Other | 3,598 | 4.0% | 3,931 | 4.9% |
| Total | 89,714 | 100.0% | 80,911 | 100.0% |
The table below provides a breakdown of the maximum credit exposure for corporates and project finance selected by industries:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share |
|---|---|---|---|---|
| Wholesale and retail trade | 22,880 | 23.7% | 20,892 | 24.0% |
| Manufacturing | 21,082 | 21.8% | 19,553 | 22.4% |
| Real estate | 9,798 | 10.2% | 12,387 | 14.2% |
| Financial intermediation | 8,821 | 9.1% | 6,833 | 7.8% |
| Construction | 7,568 | 7.8% | 4,907 | 5.6% |
| Transport, storage and communication | 3,796 | 3.9% | 4,799 | 5.5% |
| Other industries | 22,540 | 23.4% | 17,739 | 20.4% |
| Total | 96,485 | 100.0% | 87,110 | 100.0% |
The rating model for project finance has five different grades and considers borrower specific as well as transaction specific characteristics. The exposure from project finance is shown in the table below:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share | |
|---|---|---|---|---|---|
| 6.1 Excellent project risk profile – very low risk | 2,756 | 40.7% | 2,460 | 39.7% | |
| 6.2 Good project risk profile – low risk | 2,468 | 36.4% | 2,035 | 32.8% | |
| 6.3 Acceptable project risk profile – average risk | 795 | 11.7% | 912 | 14.7% | |
| 6.4 Poor project risk profile – high risk | 406 | 6.0% | 370 | 6.0% | |
| 6.5 Default | 339 | 5.0% | 365 | 5.9% | |
| NR | Not rated | 7 | 0.1% | 57 | 0.9% |
| Total | 6,771 | 100.0% | 6,199 | 100.0% |
The credit exposure in project finance rose by 9 per cent compared to the year end 2010. The continuous rise in project finance can be mainly explained by the reclassification of customers, whose credit standing was originally evaluated based on the rating model for corporates. The most significant changes took place in rating classes 6.1 and 6.2, with an increase, compared to the year end 2010, of € 296 million in rating 6.1, mainly in the Group Corporates segment, and of € 433 million in rating 6.2, mainly in the Central Europe segment. Due to the high level of collateralization in specialized lending transactions the ratings are accordingly good.
Retail customers are subdivided into private individuals and small and medium-sized entities (SMEs). For retail customers a two-fold scoring system is used – consisting of the initial and ad-hoc scoring based on customer data and behavioral scoring based on account data. The table below provides a breakdown of the maximum retail credit exposure:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share |
|---|---|---|---|---|
| Retail – Private individuals | 20,379 | 88.6% | 20,301 | 88.3% |
| Retail – SME | 2,618 | 11.4% | 2,687 | 11.7% |
| Total | 22,997 | 100.0% | 22,989 | 100.0% |
| hereof non-performing loans | 2,481 | 10.8% | 2,399 | 10.4% |
| hereof individual loan loss provision | 1,471 | 6.4% | 1,308 | 5.7% |
| hereof portfolio based loan loss provision | 357 | 1.6% | 353 | 1.5% |
The total credit exposure of retail customers breaks down by segments as follows:
| 30/9/2011 In € million |
Central Europe |
Southeastern Europe |
Russia | CIS other | Group markets |
|---|---|---|---|---|---|
| Retail – Private individuals | 9,852 | 6,146 | 2,574 | 1,714 | 12 |
| Retail – SME | 1,587 | 835 | 22 | 151 | 103 |
| Total | 11,439 | 6,982 | 2,596 | 1,865 | 115 |
| hereof non-performing loans | 973 | 584 | 208 | 710 | 4 |
| hereof individual loan loss provision | 444 | 379 | 177 | 467 | 4 |
| hereof portfolio based loan loss provision | 237 | 79 | 9 | 32 | 0 |
| 31/12/2010 In € million |
Central Europe |
Southeastern Europe |
Russia | CIS other | Group markets |
|---|---|---|---|---|---|
| Retail – Private individuals | 9,794 | 6,293 | 2,093 | 2,062 | 10 |
| Retail – SME | 1,673 | 802 | 20 | 191 | 0 |
| Total | 11,467 | 7,095 | 2,113 | 2,253 | 10 |
| hereof non-performing loans | 919 | 544 | 212 | 718 | 0 |
| hereof individual loan loss provision | 332 | 347 | 178 | 445 | 0 |
| hereof portfolio based loan loss provision | 199 | 101 | 9 | 45 | 0 |
In the first nine months of 2011, the total credit exposure to retail customers remained unchanged at € 22,997 million. Declines occurred above all in the segments Southeastern Europe and CIS other. The drop in CIS other was partly currency-based (the exchange rate of the Belarusian rouble devaluated strongly in the second quarter quarter compared to the euro). In the Southeastern Europe countries the drop was mostly due to a reduced credit demand. Growth was observed in Central Europe, Russia and Group markets segments.
In the table below the retail exposure selected by products is shown:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share |
|---|---|---|---|---|
| Mortgage loans | 11,836 | 51% | 11,309 | 49% |
| Personal loans | 5,074 | 22% | 5,218 | 23% |
| Car loans | 1,912 | 8% | 2,056 | 9% |
| Credit cards | 1,900 | 8% | 1,635 | 7% |
| Overdraft | 1,789 | 8% | 1,923 | 8% |
| SME Financing | 487 | 2% | 848 | 4% |
| Total | 22,997 | 100% | 22,989 | 100% |
The share of foreign currency loans in retail portfolios provides an indication of potential change in default rates if the exchange rate of the domestic currency changes. The internal risk assessment thus not only takes into account the share of foreign currency loans but also the usually stricter lending criteria of loan distribution and – in several countries – the customers ability to match payments with foreign currency income.
| In € million | 30/9/2011 | Share | 31/12/2010 | Share |
|---|---|---|---|---|
| Euro | 3,250 | 39.8% | 3,011 | 35.3% |
| Swiss franc | 3,213 | 39.3% | 3,539 | 41.4% |
| US dollar | 1,510 | 18.5% | 1,741 | 20.4% |
| Other foreign currencies | 201 | 2.5% | 251 | 2.9% |
| Loans in foreign currencies | 8,174 | 100.0% | 8,542 | 100.0% |
| Share of total loans | 36.2% | 37.2% |
1 Adaption of previous year figures due to different allocation.
The financial institutions asset class mainly contains exposures to banks and securities firms. The internal rating model for financial institutions is based on a peer-group approach that takes both qualitative and quantitative information into account. The final rating for financial institutions is capped by the country rating of the respective home country.
The following table shows the maximum credit exposure by internal rating for financial institutions (excluding central banks). For assessment of credit risk collateral (e.g. financial collaterals of securities transactions) and guarantees (e.g. by central banks) must also be taken into account.
| In € million | 30/9/2011 | Share | 31/12/2010 | Share | |
|---|---|---|---|---|---|
| A1 | Minimal risk | 237 | 0.6% | 246 | 0.8% |
| A2 | Excellent credit standing | 3,633 | 8.9% | 2,173 | 6.7% |
| A3 | Very good credit standing | 24,145 | 59.0% | 18,251 | 56.4% |
| B1 | Good credit standing | 5,636 | 13.8% | 4,498 | 13.9% |
| B2 | Average credit standing | 3,876 | 9.5% | 3,527 | 10.9% |
| B3 | Mediocre credit standing | 1,179 | 2.9% | 1,603 | 5.0% |
| B4 | Weak credit standing | 864 | 2.1% | 893 | 2.8% |
| B5 | Very weak credit standing | 427 | 1.0% | 474 | 1.5% |
| C | Doubtful/high default risk | 256 | 0.6% | 128 | 0.4% |
| D | Default | 507 | 1.2% | 383 | 1.2% |
| NR | Not rated | 157 | 0.4% | 185 | 0.6% |
| Total | 40,916 | 100.0% | 32,360 | 100.0% |
Compared to the year end 2010, credit exposure to credit institutions increased by 26 per cent to € 40,916 million. Due to the business policy of RBI credits and loans to non-Raiffeisen sector members and the holdings of securities of financial institutions dropped continuously. The growth therefore mainly results from extension of short-term positions and repo business (which from risk point of view is fully collateralized). In general this business was performed with banks with of very good credit standing (rating A3) and led to an increased share of this rating grade by 2.6 percentage points to 59 per cent. The volumes of the average credit classes (rating B1 to B3) with € 10,691 million or 26.2 per cent remained stable since year end 2010. The volume of exposures in default rose by € 124 million in comparison to year end 2010. The most significant increase was in Group markets segment in the Middle East and Iceland.
The breakdown shows the total credit exposure of financial institutions (excluding central banks) split by products:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share |
|---|---|---|---|---|
| Money market | 13,351 | 33% | 11,302 | 35% |
| Derivatives | 11,151 | 27% | 6,308 | 19% |
| Loans | 6,878 | 17% | 5,011 | 15% |
| Bond | 4,888 | 12% | 6,166 | 19% |
| Repo | 3,505 | 9% | 590 | 2% |
| Other | 1,142 | 3% | 2,984 | 9% |
| Total | 40,916 | 100% | 32,360 | 100% |
Another asset class is formed by central governments, central banks, and regional governments as well as other public sector entities. The table below provides a breakdown of the total credit exposure to sovereigns (including central banks) by internal rating:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share | |
|---|---|---|---|---|---|
| A1 | Minimal risk | 8,392 | 32.8% | 8,386 | 32.4% |
| A2 | Excellent credit standing | 731 | 2.9% | 624 | 2.4% |
| A3 | Very good credit standing | 4,205 | 16.5% | 3,927 | 15.2% |
| B1 | Good credit standing | 1,462 | 5.7% | 1,640 | 6.3% |
| B2 | Average credit standing | 786 | 3.1% | 1,399 | 5.4% |
| B3 | Mediocre credit standing | 5,682 | 22.2% | 5,951 | 23.0% |
| B4 | Weak credit standing | 2,363 | 9.2% | 2,097 | 8.1% |
| B5 | Very weak credit standing | 1,613 | 6.3% | 1,692 | 6.5% |
| C | Doubtful/high default risk | 224 | 0.9% | 0 | 0.0% |
| D | Default | 88 | 0.3% | 60 | 0.2% |
| NR | Not rated | 9 | 0.0% | 79 | 0.3% |
| Total | 25,556 | 100.0% | 25,855 | 100.0% |
The volume of the credit exposure to sovereigns was € 25,556 million as of September 30, 2011, and thus slightly below the level as at the year end 2010. The share of the credit exposure with the best rating grade A1 rose by 0.4 percentage points due to higher deposits with the Austrian national bank. The growth in the rating grade A3 was mainly caused by the rating-downgrade of Italy. The credit exposure with average credit standing B2 declined due to the lower volume of Russian state bonds in comparison to year-end 2010 by more than half. The volume in the rating class B3, however, decreased by € 269 million mainly due to a reduction of Hungarian government bonds. The exposure in rating class C arose from the downgrade for/ re-rating of Belarus and consists mainly of loans to the Belarusian Central Bank. RBI has no or only very little sovereign credit exposure to Greece, Portugal and Ireland.
The breakdown below shows the total credit exposure to sovereigns (including central banks) selected by products:
| In € million | 30/9/2011 | Share | 31/12/2010 | Share |
|---|---|---|---|---|
| Bond | 15,341 | 60% | 5,634 | 60.5% |
| Loans | 8,387 | 33% | 8,039 | 31.1% |
| Derivatives | 998 | 4% | 980 | 3.8% |
| Other | 830 | 3% | 1,203 | 4.7% |
| Total | 25,556 | 100% | 25,855 | 100.0% |
The following table shows the loans included in the statement of financial position under the items loans and advances to banks and loans and advances to customers (excluding off-balance sheet items) and the corresponding share of nonperforming-loans, collateral provided and loan loss provisions defined by the seat of the respective Group unit as of 30 September 2011 and as of 31 December 2010:
| NPL | NPL ratio | Coverage ratio | |||||
|---|---|---|---|---|---|---|---|
| In € million | 30/9/2011 | 31/12/2010 | 30/9/2011 | 31/12/2010 | 30/9/2011 | 31/12/2010 | |
| Corporate customers |
4,326 | 4,381 | 7.4% | 8.0% | 68.1% | 64.8% | |
| Retail customers | 2,481 | 2,396 | 11.6% | 11.5% | 73.7% | 69.3% | |
| Sovereigns | 14 | 12 | 1.0% | 1.1% | 254.9% | 8.2% | |
| Total nonbanks | 6,821 | 6,790 | 8.4% | 9.0% | 70.5% | 66.3% | |
| Banks | 381 | 268 | 1.3% | 1.1% | 63.2% | 95.2% | |
| Total | 7,202 | 7,058 | 6.6% | 7.1% | 70.1% | 67.4% |
The non-performing loans of corporate customers decreased by 1 per cent or € 55 million to € 4,326 million. Significant reductions were observed in Russia by 25 per cent and in the Group corporates segment by 16 per cent. On the other hand the segment Southeastern Europe recorded an increase of 25 per cent. The loan loss provisions increased by 4 per cent or € 108 million to € 2,943 million which resulted in a rise of 3.3 percentage points to 68.1 per cent of the coverage ratio.
In the retail division, non-performing loans rose slightly by 4 per cent to € 2,481 million. The bulk of the increase was in Southeastern Europe with 7 per cent and Central Europe with 6 per cent. The ratio of non-performing loans to credit exposure increased by 0.2 percentage points to 11.6 per cent. The total loan loss provisions for retail customers rose to € 1,828 million, resulting in a coverage ratio increase of 4.4 percentage points to 73.7 per cent.
The financial institutions division recorded an increase in non-performing loans of 42 per cent or € 113 million to € 381 million, whereas the loan loss provisioning for banks was at € 246 million.
| In € million | As of 1/1/2011 |
Change in consolidated group |
Exchange differences |
Additions | Disposals | As of 30/9/2011 |
|---|---|---|---|---|---|---|
| Corporate | ||||||
| customers | 4,381 | 0 | (93) | 900 | (861) | 4,326 |
| Retail customers | 2,396 | 0 | (63) | 703 | (555) | 2,481 |
| Sovereigns | 12 | 0 | 0 | 4 | (2) | 14 |
| Total nonbanks | 6,790 | 0 | (157) | 1,606 | (1,418) | 6,821 |
| Banks | 268 | 0 | 0 | 126 | (12) | 381 |
| Total | 7,058 | 0 | (157) | 1,732 | (1,429) | 7,202 |
| In € million | As of 1/1/2010 |
Change in consolidated group |
Exchange differences |
Additions | Disposals | As of 31/12/2010 |
|---|---|---|---|---|---|---|
| Corporate | ||||||
| customers | 2,576 | 939 | 125 | 1,699 | (957) | 4,381 |
| Retail customers | 1,850 | 5 | 63 | 981 | (503) | 2,396 |
| Sovereigns | 16 | 0 | 0 | 20 | (24) | 12 |
| Total nonbanks | 4,442 | 944 | 187 | 2,700 | (1,484) | 6,790 |
| Banks | 4 | 573 | 3 | 19 | (331) | 268 |
| Total | 4,447 | 1,517 | 191 | 2,719 | (1,815) | 7,058 |
| 30/9/2011 | Central | Southeastern | Russia | CIS other | Group | Group |
|---|---|---|---|---|---|---|
| In € million | Europe | Europe | corporates | markets | ||
| Corporate customers | ||||||
| Non-performing loans | 1,375 | 979 | 336 | 718 | 730 | 186 |
| of which collateralized |
553 | 453 | 67 | 200 | 110 | 52 |
| Impairment losses on loans and advances |
780 | 526 | 398 | 524 | 550 | 165 |
| Loans | 15,316 | 7,664 | 6,837 | 3,347 | 20,146 | 1,793 |
| NPL ratio | 9.0% | 12.8% | 4.9% | 21.5% | 3.6% | 10.4% |
| Coverage ratio | 56.7% | 53.7% | 118.3% | 72.9% | 75.4% | 88.6% |
| Retail customers | ||||||
| Non-performing loans | 973 | 584 | 208 | 710 | 4 | 1 |
| of which collateralized |
430 | 159 | 25 | 390 | 0 | 0 |
| Impairment losses on | ||||||
| loans and advances | 681 | 458 | 186 | 499 | 4 | 0 |
| Loans | 10,289 | 6,848 | 2,354 | 1,743 | 0 | 44 |
| NPL ratio | 9.5% | 8.5% | 8.8% | 40.7% | – | 3.2% |
| Coverage ratio | 69.9% | 78.5% | 89.4% | 70.2% | 98.7% | 8.8% |
| Sovereigns | ||||||
| Non-performing loans | 14 | 0 | 0 | 0 | 0 | 0 |
| of which collateralized |
0 | 0 | 0 | 0 | 0 | 0 |
| Impairment losses on | ||||||
| loans and advances | 36 | 0 | 0 | 0 | 0 | 0 |
| Loans | 337 | 626 | 28 | 0 | 0 | 0 |
| NPL ratio | 4.1% | – | – | 35.9% | – | – |
| Coverage ratio | 255.5% | – | – | 100.4% | – | – |
| Banks | ||||||
| Non-performing loans | 3 | 0 | 1 | 0 | 1 | 376 |
| of which collateralized |
0 | 0 | 0 | 0 | 0 | 111 |
| Impairment losses on loans and advances |
2 | 0 | 1 | 0 | 2 | 241 |
| Loans | 2,582 | 2,170 | 2,690 | 684 | 1,371 | 21,917 |
| NPL ratio | 0.1% | 0.0% | 0.0% | 0.0% | 0.1% | 1.7% |
| Coverage ratio | 83.8% | 115.4% | 84.3% | 100.0% | 154.4% | 64.1% |
| 31/12/2010 | Central | Southeastern | Russia | CIS other | Group | Group |
|---|---|---|---|---|---|---|
| In € million | Europe | Europe | corporates | markets | ||
| Corporate customers | ||||||
| Non-performing loans | 1,357 | 785 | 450 | 710 | 873 | 206 |
| of which collateralized |
496 | 443 | 128 | 233 | 239 | 0 |
| Impairment losses on loans and advances |
687 | 459 | 443 | 503 | 563 | 183 |
| Loans | 14,762 | 7,305 | 5,620 | 3,248 | 20,157 | 3,584 |
| NPL ratio | 9.2% | 10.8% | 8.0% | 21.8% | 4.3% | 5.8% |
| Coverage ratio | 50.7% | 58.4% | 98.4% | 70.9% | 64.5% | 88.8% |
| Retail customers | ||||||
| Non-performing loans | 917 | 544 | 218 | 718 | 0 | 0 |
| of which collateralized |
423 | 166 | 62 | 406 | 0 | 0 |
| Impairment losses on loans and advances |
530 | 448 | 187 | 490 | 6 | 0 |
| Loans | 10,159 | 6,714 | 1,943 | 2,058 | 2 | 42 |
| NPL ratio | 9.0% | 8.1% | 11.2% | 34.9% | – | – |
| Coverage ratio | 57.9% | 82.3% | 85.7% | 68.3% | – | – |
| Sovereigns | ||||||
| Non-performing loans | 12 | 0 | 0 | 0 | 0 | 0 |
| of which collateralized |
0 | 0 | 0 | 0 | 0 | 0 |
| Impairment losses on loans and advances |
1 | 0 | 0 | 0 | 0 | 0 |
| Loans | 296 | 762 | 38 | 0 | 0 | 0 |
| NPL ratio | 4.0% | – | 0.5% | – | – | – |
| Coverage ratio | 8.0% | – | 20.9% | – | – | – |
| Banks | ||||||
| Non-performing loans | 3 | 0 | 1 | 0 | 1 | 263 |
| of which collateralized |
0 | 0 | 0 | 0 | 0.0% | 0.0% |
| Impairment losses on loans and advances |
2 | 0 | 0 | 0 | 1 | 251 |
| Loans | 1,387 | 2,587 | 1,821 | 861 | 2,597 | 14,125 |
| NPL ratio | 0.2% | 0.0% | 0.1% | 0.0% | 0.0% | 1.9% |
| Coverage ratio | 82.5% | – | 35.8% | 100.0% | 73.9% | 95.7% |
| As of 1/1/2011 |
Change in consolidated |
Allocation1 | Release | Usage 2 | Exchange differences |
As of 30/9/2011 |
|
|---|---|---|---|---|---|---|---|
| In € million | group | ||||||
| Individual loan loss | |||||||
| provisions | 4,000 | (1) | 1,124 | (438) | (297) | (106) | 4,282 |
| Central Europe | 980 | 0 | 560 | (175) | (121) | 939 | 1,204 |
| Southeastern Europe | 723 | 0 | 335 | (113) | (107) | 711 | 827 |
| Russia | 536 | 0 | 90 | (89) | (23) | 506 | 485 |
| CIS other | 859 | 0 | 116 | (11) | (27) | 833 | 911 |
| Group corporates | 665 | 17 | 38 | (50) | (18) | 662 | 650 |
| Group markets | 238 | (18) | (14) | 0 | (1) | 239 | 205 |
| Corporate center | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Portfolio-based loan | |||||||
| loss provisions | 888 | (15) | 385 | (285) | 0 | (29) | 960 |
| Central Europe | 286 | 0 | 239 | (138) | 0 | 283 | 385 |
| Southeastern Europe | 206 | (15) | 38 | (64) | 0 | 204 | 179 |
| Russia | 135 | 0 | 56 | (36) | 0 | 126 | 146 |
| CIS other | 143 | 0 | 37 | (43) | 0 | 127 | 121 |
| Group corporates | 100 | 0 | 17 | (15) | 0 | 100 | 101 |
| Group markets | 18 | 0 | 9 | 0 | 0 | 18 | 27 |
| Corporate center | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 4,888 | (1) | 1,510 | (722) | (297) | (135) | 5,242 |
The following table summarizes the development of impairment losses on loans and advances/loan loss provisions for off-balance sheet obligations during the reporting period by segments:
1 Allocation including direct write-downs and income on written down claims
2 Usage including direct write-downs and income on written down claims
The credit portfolio of RBI is well diversified in terms of geographical region and industry. Single name concentrations are also actively managed (based on the concept of groups of connected customers) by limits and regular reporting. As a consequence portfolio granularity is high. The regional breakdown of the maximum credit exposure reflects the broad diversification in European markets. The following table shows the regional distribution of the maximum credit exposure from all asset classes by country of risk. The changes in the reporting period are mainly caused by the enlargement of business with financial institutions in Germany.
| In € million | 30/9/2011 | Share | 31/12/20101 | Share |
|---|---|---|---|---|
| Austria | 43,178 | 27.3% | 39,319 | 23.4% |
| Central Europe | 43,223 | 22.0% | 41,525 | 23.8% |
| Slovakia | 11,671 | 5.9% | 11,834 | 7.0% |
| Czech Republic | 11,131 | 5.7% | 10,032 | 6.0% |
| Hungary | 9,922 | 5.0% | 9,938 | 5.9% |
| Poland | 8,361 | 4.3% | 8,232 | 4.9% |
| Other | 2,137 | 1.1% | 1,489 | 0.0% |
| Southeastern Europe | 26,085 | 13.3% | 25,436 | 15.1% |
| Romania | 7,866 | 4.0% | 8,047 | 4.8% |
| Croatia | 6,278 | 3.2% | 6,190 | 3.7% |
| Bulgaria | 4,177 | 2.1% | 3,959 | 2.4% |
| Serbia | 2,370 | 1.2% | 2,557 | 1.5% |
| Other | 5,394 | 2.7% | 4,684 | 2.8% |
| Russia | 17,771 | 9.0% | 14,453 | 8.6% |
| CIS other | 7,869 | 4.0% | 7,883 | 4.7% |
| Ukraine | 6,108 | 3.1% | 6,156 | 3.7% |
| Other | 1,761 | 0.9% | 1,726 | 1.0% |
| European Union | 27,582 | 14.0% | 20,393 | 12.1% |
| Germany | 7,421 | 3.8% | 5,708 | 3.4% |
| Great Britain | 7,282 | 3.7% | 4,000 | 2.4% |
| Netherlands | 2,669 | 1.4% | 2,137 | 1.3% |
| Other | 10,210 | 5.2% | 8,547 | 5.1% |
| Far East | 9,943 | 5.1% | 7,722 | 4.6% |
| China | 5,937 | 3.0% | 3,349 | 2.0% |
| Other | 4,007 | 2.0% | 4,373 | 2.6% |
| USA | 4,076 | 2.1% | 4,369 | 2.6% |
| Rest of the world | 6,227 | 3.2% | 7,215 | 5.1% |
| Total | 185,954 | 100.0% | 168,314 | 100.0% |
1 Adaption of previous year figures due to different allocation. Risk policies and credit assessments in RBI take into account the industry class of customers as well. The banking and insurance industry represents the largest industry class, which is mostly attributable to exposures against members of the Austrian Raiffeisen Sector (central liquidity balancing function). The second largest industry class is private households, primarily retail customers in Central and Eastern European countries. The following table shows the maximum credit exposure by industry classification:
| In € million | 30/9/2011 | Share | 31/12/20101 | Share |
|---|---|---|---|---|
| Banking and insurance | 58,664 | 31.5% | 48,146 | 28.6% |
| Private households | 20,840 | 11.2% | 22,554 | 13.4% |
| Wholesale trade and commission trade (except car trading) |
17,392 | 9.4% | 15,217 | 9.0% |
| Public administration and defence and social insurance institutions |
15,897 | 8.5% | 16,182 | 9.6% |
| Real estate activities | 10,117 | 5.4% | 12,347 | 7.3% |
| Other manufacturing | 9,906 | 5.3% | 8,628 | 5.1% |
| Construction | 7,608 | 4.1% | 4,950 | 2.9% |
| Other business activities | 7,243 | 3.9% | 6,780 | 4.0% |
| Retail trade except repair of motor vehicles | 5,481 | 2.9% | 4,087 | 2.4% |
| Land transport, transport via pipelines | 4,137 | 2.2% | 2,484 | 1.5% |
| Electricity, gas, steam and hot water supply | 3,474 | 1.9% | 3,516 | 2.1% |
| Manufacture of basic metals | 3,357 | 1.8% | 2,939 | 1.7% |
| Manufacture of food products and beverages | 2,638 | 1.4% | 2,987 | 1.8% |
| Extraction of crude petroleum and natural gas | 1,720 | 0.9% | 1,277 | 0.8% |
| Manufacture of chemicals and chemical products | 1,709 | 0.9% | 1,757 | 1.0% |
| Wholesale and retail trade and repair of motor vehicles and motors |
1,633 | 0.9% | 1,796 | 1.1% |
| Manufacture of coke and refined petroleum products | 1,589 | 0.9% | 1,516 | 0.9% |
| Manufacture of machinery and equipment | 1,543 | 0.8% | 1,730 | 1.0% |
| Other industries | 11,007 | 5.9% | 9,420 | 5.6% |
| Total | 185,954 | 100.0% | 168,314 | 100.0% |
1 Adaption of previous year figures due to a new industry class codification (ÖNACE 2008).
RBI developed a new market risk management system in 2008 based on an internal model. The value-at-risk (VaR) is measured based on a hybrid simulation approach (mixture of historical and Monte Carlo simulations where 5,000 scenarios are calculated). The Austrian financial market authority and the Austrian national bank have approved this model so that it can be used for calculating own funds requirement for market risks.
The following tables show risk figures for individual market risk categories of the trading and banking books as of 30 September 2011:
| Trading book VaR 99% 1d In € million |
VaR as of 30/9/2011 |
Average VaR | Minimum VaR |
Maximum VaR |
VaR as of 31/12/2010 |
|---|---|---|---|---|---|
| Currency risk | 5 | 6 | 4 | 10 | 8 |
| Interest rate risk | 13 | 7 | 4 | 15 | 7 |
| Credit spread risik | 4 | 3 | 2 | 9 | 2 |
| Share price risk | 2 | 2 | 1 | 2 | 1 |
| Total | 21 | 13 | 9 | 21 | 13 |
| Banking book VaR 99% 1d In € million |
VaR as of 30/9/2011 |
Average VaR | Minimum VaR |
Maximum VaR |
VaR as of 31/12/2010 |
|---|---|---|---|---|---|
| Interest rate risk | 59 | 48 | 28 | 87 | 70 |
| Credit spread risik | 40 | 29 | 20 | 43 | 30 |
| Total | 57 | 50 | 30 | 80 | 66 |
The following table shows total risk figures for individual market risk categories of the trading and banking books as of 30 September 2011. The VaR is dominated by the exchange rate risk out of long-termed equity positions, structural interest rate risks and credit spread risks of bonds, which are often held as liquidity buffer.
| Total VaR 99% 1d in € million |
VaR as of 30/9/2011 |
Average VaR | Minimum VaR |
Maximum VaR |
VaR1 as of 31/12/2010 |
|---|---|---|---|---|---|
| Currency risk1 | 68 | 53 | 37 | 83 | 53 |
| Interest rate risk | 57 | 48 | 26 | 91 | 70 |
| Credit spread risik | 43 | 31 | 22 | 48 | 31 |
| Share price risk | 2 | 2 | 1 | 2 | 1 |
| Total | 95 | 76 | 51 | 104 | 87 |
Exchange rate risk on total bank level also includes equity positions of subsidiaries denominated in foreign currency. The structural exchange rate risk resulting from equity positions is managed independently from the mainly short-term trading positions.
The following table shows the liquidity gap and the ratio of expected cash inflows plus counterbalancing capacity to cash outflows (liquidity ratio) for selected maturities on a cumulative basis, taking into account balance sheet items and off-balance-sheet transactions. Based on expert opinions, statistical analyses and country specifics, this calculation also incorporates estimates on the prolongation of defined assets, the so-called sediment of customer deposits, and the liquidity counterbalancing capacity (in particular, assets that are eligible for refinancing at central banks and that can be used as collateral in repo transactions).
| In € million | 30/9/2011 | 31/12/2010 | ||||
|---|---|---|---|---|---|---|
| Maturity | 1 week | 1 month | 1 year | 1 week | 1 month | 1 year |
| Liquidity gap | 21,472 | 19,216 | 7,062 | 15,997 | 13,133 | 5,994 |
| Liquidity ratio | 182% | 137% | 105% | 172% | 126% | 105% |
The liquidity position of RBI in short-term maturity bands was further strengthened up to 30 September 2011. The cash flows expected and recoverable within one week exceed the expected outflows by € 21,472 million. Since the beginning of the year, the liquidity gap in this maturity band has increased by € 5.475 million (34 per cent). A slightly higher increase was also achieved for flows within a month, as was done for the liquidity gap within one year. This will ensure that in crisis situations RBI has sufficient liquid resources to meet all short-term payment obligations.
In order to monitor operational risks, loss data is collected in a central database in a structured manner and on a Groupwide basis. Such a loss database is a prerequisite for implementing a statistical loss distribution model and is a minimum requirement for implementing the regulatory standardized approach. Furthermore, loss data (and the collection of near misses) is used as a basis for scenarios for risk identification and for the exchange with international loss data pools in order to develop advanced measurement approaches.
The breakdown of operational loss events according to their event type is shown next:
Breakdown of operational loss events by loss amount (before risk mitigation)
In the reporting period, both the loss amount and the number of losses have been reduced. The reduction can mainly be related to external fraud events in the lending business.
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Contingent liabilities | 12,131 | 11,856 |
| Acceptances and endorsements | 44 | 32 |
| Credit guarantees | 6,667 | 6,662 |
| Other guarantees | 2,308 | 2,267 |
| Letters of credit (documentary business) | 3,062 | 2,876 |
| Other contingent liabilities | 50 | 19 |
| Commitments | 12,517 | 11,992 |
| Irrevocable credit lines and stand-by facilities | 12,517 | 11,992 |
| Up to 1 year | 4,767 | 4,547 |
| More than 1 year | 7,750 | 7,446 |
The following table contains revocable credit lines which are unweighted according to Basel II:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Revocable credit lines | 14,969 | 11,756 |
| Up to 1 year | 12,250 | 9,687 |
| More than 1 year | 2,718 | 2,069 |
The total volume of unsettled financial instruments as of 30 September 2011 breaks down as follows:
| Nominal amount by maturity | Fair values | |||||
|---|---|---|---|---|---|---|
| In € million | Up to 1 year | More than 1 year, up to 5 years |
More than 5 years |
Total | Positive | Negative |
| Interest rate contracts | 70,653 | 134,545 | 79,133 | 284,331 | 6,580 | (6,316) |
| Foreign exchange rate and gold contracts |
48,810 | 7,926 | 2,045 | 58,782 | 1,379 | (1,631) |
| Equity/index contracts | 1,605 | 998 | 340 | 2,943 | 223 | (724) |
| Commodities | 264 | 74 | 15 | 353 | 16 | (12) |
| Credit derivatives | 777 | 1,823 | 1,016 | 3,616 | 161 | (83) |
| Precious metals contracts | 15 | 20 | 14 | 48 | 0 | (6) |
| Nominal amount by maturity | Fair values | |||||
|---|---|---|---|---|---|---|
| in € Millionen | Up to 1 year | More than 1 year, up to 5 years |
More than 5 years |
Total | Positive | Negative |
| Interest rate contracts | 44,859 | 98,822 | 67,761 | 211,442 | 4,198 | (3,975) |
| Foreign exchange rate and gold contracts |
42,619 | 7,735 | 1,795 | 52,148 | 741 | (1,169) |
| Equity/index contracts | 1,551 | 699 | 240 | 2,490 | 97 | (570) |
| Commodities | 405 | 101 | 15 | 521 | 17 | (3) |
| Credit derivatives | 495 | 2,338 | 1,103 | 3,936 | 57 | (62) |
| Precious metals contracts | 21 | 0 | 16 | 37 | 2 | (16) |
The total volume of unsettled financial instruments as of 31 December 2010 breaks down as follows:
Transactions with related parties who are natural persons are limited to banking business transactions which are carried out at fair market conditions. Moreover, members of the Managing Board hold shares of Raiffeisen Bank International AG. This information is published on the homepage of Raiffeisen Bank International. Further business transactions, especially large banking business transactions with related parties who are natural persons were not concluded in the reporting period.
The following tables show transactions with related companies. Parent companies are Raiffeisen-Landesbanken-Holding GmbH, Vienna and Raiffeisen Zentralbank Österreich Aktiengesellschaft, Vienna.
| 30/9/2011 In € million |
Parent companies |
Affiliated companies |
Companies valued at equity |
Other interests |
|---|---|---|---|---|
| Loans and advances to banks | 11,988 | 181 | 373 | 210 |
| Loans and advances to customers | 0 | 1,207 | 406 | 337 |
| Trading assets | 0 | 25 | 18 | 8 |
| Financial investments | 0 | 276 | 2 | 320 |
| Investments in associates | 0 | 0 | 5 | 0 |
| Other assets including derivatives | 0 | 10 | 0 | 0 |
| Deposits from banks | 10,494 | 248 | 6,071 | 137 |
| Deposits from customers | 1 | 596 | 2 | 334 |
| Debt securities issued | 0 | 51 | 0 | 0 |
| Provisions for liabilities and charges | 0 | 0 | 0 | 0 |
| Trading liabilities | 0 | 16 | 38 | 2 |
| Other liabilities including derivatives | 0 | 4 | 0 | 0 |
| Guarantees given | 0 | 55 | 18 | 21 |
| Guarantees received | 0 | 417 | 164 | 2 |
| 31/12/2010 In € million |
Parent companies |
Affiliated companies |
Companies valued at equity |
Other interests |
|---|---|---|---|---|
| Loans and advances to banks | 7,892 | 224 | 274 | 244 |
| Loans and advances to customers | 0 | 1,113 | 437 | 354 |
| Trading assets | 0 | 17 | 20 | 19 |
| Financial investments | 0 | 234 | 2 | 352 |
| Investments in associates | 0 | 0 | 5 | 0 |
| Other assets including derivatives | 5 | 19 | 0 | 0 |
| Deposits from banks | 7,151 | 3 | 6,908 | 115 |
| Deposits from customers | 1 | 527 | 2 | 112 |
| Debt securities issued | 0 | 1 | 0 | 0 |
| Provisions for liabilities and charges | 0 | 0 | 0 | 0 |
| Trading liabilities | 0 | 23 | 26 | 18 |
| Other liabilities including derivatives | 0 | 57 | 0 | 0 |
| Guarantees given | 0 | 74 | 264 | 5 |
| Guarantees received | 0 | 389 | 143 | 1 |
| 30/9/2011 | 31/12/2010 | |||||
|---|---|---|---|---|---|---|
| In € million | Level I | Level II | Level III | Level I | Level II | Level III |
| Trading assets | 3,446 | 8,397 | 104 | 3,599 | 5,031 | 0 |
| Positive fair values of derivatives 1 | 181 | 7,640 | 104 | 69 | 4,118 | 0 |
| Shares and other variable-yield securities | 196 | 67 | 0 | 320 | 110 | 0 |
| Bonds, notes and other fixed-interest securities |
3,070 | 672 | 0 | 3,210 | 804 | 0 |
| Call/time deposits from trading purposes | 0 | 19 | 0 | 0 | 0 | 0 |
| Financial assets at fair value through profit | ||||||
| or loss | 5,523 | 2,140 | 122 | 5,613 | 2,302 | 155 |
| Shares and other variable-yield securities | 119 | 129 | 1 | 147 | 132 | 1 |
| Bonds, notes and other fixed-interest | ||||||
| securities | 5,404 | 2,012 | 121 | 5,467 | 2,170 | 154 |
| Financial assets available-for-sale | 62 | 0 | 0 | 80 | 0 | 0 |
| Other interests2 | 62 | 0 | 0 | 80 | 0 | 0 |
| Derivatives (hedging) | 0 | 434 | 0 | 0 | 925 | 0 |
| Positive fair values of derivatives from hedge | ||||||
| accounting | 0 | 434 | 0 | 0 | 925 | 0 |
1 Including other derivatives.
Includes only securities traded on the stock exchange.
| 30/9/2011 | 31/12/2010 | |||||
|---|---|---|---|---|---|---|
| In € million | Level I | Level II | Level III | Level I | Level II | Level III |
| Trading liabilities | 1,709 | 8,300 | 0 | 1,576 | 4,953 | 0 |
| Negative fair values of derivatives financial | ||||||
| instruments 1 | 593 | 8,126 | 0 | 556 | 4,762 | 0 |
| Call/time deposits from trading purposes | 5 | 0 | 0 | 0 | 0 | 0 |
| Short-selling of trading assets | 509 | 0 | 0 | 425 | 1 | 0 |
| Certificates issued | 603 | 174 | 0 | 595 | 190 | 0 |
| Liabilities at fair value through profit and | ||||||
| loss | 0 | 2,408 | 0 | 0 | 2,557 | 0 |
| Debt securities issued | 0 | 2,408 | 0 | 0 | 2,557 | 0 |
| Derivatives (hedging) | 0 | 53 | 0 | 0 | 477 | 0 |
| Negative fair values of derivatives from | ||||||
| hedge accounting | 0 | 53 | 0 | 0 | 477 | 0 |
1 Including other derivatives.
Level I: Quoted market prices
Level II: Valuation techniques based on market data
Level III: Valuation techniques not based on market data
In the first nine months 2011 the liquidity of the financial instruments in the portfolio was generally very good. On the one hand some of the issued certificates were moved to a price-based valuation (€ 34 million) and on the other hand certificates were entered into a liquid regulated market (€ 50 million).
In the first nine months 2011 there was a change in the positive fair values of derivative financial instruments from level II to level III in the amount of € 104 million. This resulted from exchange positions which are held either strategically or held for liquidity purposes with the Belarusian National Bank, which is the only possible counterparty for such transactions. In June 2011 the Belarusian National Bank stopped entering into new currency transactions of this type. Since the data available to determine the fair value of these derivatives is no longer observable, the fair value is determined by an appropriate valuation method for the particular instrument.
RBI has no credit institution group of its own according to the Austrian Banking Act (BWG) and is thus not subject to regulatory provisions on a consolidated basis as it is part of the RZB credit institution group. The following figures are for information purposes only.
The own funds of RBI according to Austrian Banking Act (BWG) 1993/Amendment 2006 (Basel II) break down as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Paid-in capital | 4,926 | 4,914 |
| Earned capital | 2,477 | 2,958 |
| Non-controlling interests | 1,072 | 1,003 |
| Hybrid tier 1capital | 800 | 800 |
| Intangible fixed assets | (468) | (469) |
| Core capital (tier 1 capital) | 8,806 | 9,206 |
| Deductions from core capital | (21) | (15) |
| Eligible core capital (after deductions) | 8,784 | 9,191 |
| Supplementary capital according to Section 23 (1) 5 BWG | 600 | 600 |
| Provision excess of internal rating approach positions | 241 | 231 |
| Hidden reserves | 55 | 55 |
| Long-term subordinated capital | 2,364 | 2,480 |
| Additional own funds (tier 2 capital) | 3,260 | 3,366 |
| Deduction items: participations, securitizations | (22) | (15) |
| Eligible additional own funds (after deductions) | 3,238 | 3,351 |
| Deduction items: insurance companies | (6) | (4) |
| Tier 2 capital available to be redesignated as tier 3 capital | 180 | 69 |
| Total own funds | 12,196 | 12,608 |
| Total own funds requirement | 8,068 | 7,585 |
| Excess own funds | 4,128 | 5,023 |
| Excess cover ratio | 51.2% | 66.2% |
| Core tier 1 ratio, total | 7.9% | 8.9% |
| Tier 1 ratio, credit risk | 10.9% | 12.2% |
| Tier 1 ratio, total | 8.7% | 9.7% |
| Own funds ratio | 12.1% | 13.3% |
The total own funds requirement is composed as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Risk-weighted assets according to section 22 BWG | 80,433 | 75,601 |
| of which 8 per cent minimum own funds for the credit risk according to Sections 22a to 22h BWG |
6,435 | 6,048 |
| Standardized approach | 3,221 | 2,974 |
| Internal rating approach | 3,214 | 3,074 |
| Settlement risk | 0 | 0 |
| Own funds requirement for position risk in bonds, equities and commodities |
377 | 327 |
| Own funds requirement for open currency positions | 469 | 386 |
| Own funds requirement for operational risk | 788 | 824 |
| Total own funds requirement | 8,068 | 7,585 |
Risk-weighted assets for the credit risk according to asset classes break down as follows:
| In € million | 30/9/2011 | 31/12/2010 |
|---|---|---|
| Risk-weighted assets according to section 22 BWG on standardized approach |
40,258 | 37,175 |
| Central governments and central banks | 3,465 | 3,712 |
| Regional governments | 114 | 95 |
| Public administration and non-profit organisations | 36 | 42 |
| Multilateral development banks | 0 | 0 |
| Banks | 936 | 1,013 |
| Corporates | 21,854 | 18,800 |
| Retail (including small and medium-sized entities) | 10,329 | 10,089 |
| Mutual funds | 117 | 125 |
| Securitisation position | 3 | 18 |
| Other positions | 3,405 | 3,282 |
| Risk-weighted assets on internal rating approach | 40,175 | 38,426 |
| Central governments and central banks | 818 | 879 |
| Banks | 4,653 | 5,048 |
| Corporates | 31,672 | 29,586 |
| Retail (including small and medium-sized entities) | 2,603 | 2,465 |
| Equity exposures | 243 | 314 |
| Securitisation position | 186 | 135 |
| Total | 80,433 | 75,601 |
The average number of staff employed during the reporting period (full-time equivalents) breaks down as follows:
| Full-time equivalents | 1/1-30/9/2011 | 1/1-30/9/2010 |
|---|---|---|
| Salaried employees | 59,027 | 57,985 |
| Wage earners | 979 | 1,058 |
| Total | 60,006 | 59,043 |
| Full-time equivalents | 1/1-30/9/2011 | 1/1-30/9/2010 |
| Austria | 2,687 | 2,767 |
| Foreign | 57,319 | 56,276 |
| Total | 60,006 | 59,043 |
Publisher: Raiffeisen Bank International AG, Am Stadtpark 9, 1030 Vienna, Austria Editorial Team: Group Investor Relations Copy deadline: 21 November 2011 Produced in Vienna Internet: www.rbinternational.com This report is also available in German.
Group Investor Relations inquiries: Public Relations inquiries: E-mail: [email protected] E-mail: [email protected] Internet: www.rbinternational.com Investor Relations Internet: www.rbinternational.com Public Relations Phone: +43-1-71707 2089 Phone: +43-1-71707 2828
The forecasts, plans, and statements addressing the future in this report are based on the knowledge and estimates of Raiffeisen Bank International AG at the time at which they are prepared. Like all statements addressing the future, they are subject to risks and uncertainty factors that may ultimately lead to considerable divergences. No guarantees can therefore be given that the forecasts and targeted values or the statements addressing the future will actually materialize.
This report is for information purposes only and contains neither a recommendation to buy or sell nor an offer of sale or subscription to shares nor does it constitute an invitation to make an offer to sell shares.
We have exercised the utmost diligence in preparing this report and have checked the data contained therein. However, rounding, transmission, and printing errors cannot be ruled out. The present English version is a translation of the report that the company originally prepared in the German language. The company only recognizes the German version as the authentic version. We are not liable for any losses or similar damages that may occur as a result of or in connection with the use of this report.
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