Raiffeisen Q4 net up 38% beats expectations

Net profit after minority interests at Eastern Europe’s third-biggest bank was €215.6 million ($339.2 million) in the quarter to December, beating estimates in a Reuters poll of 11 analysts, who expected €193 million on average. “Economic growth in continued in 2007 almost seamlessly from the record year 2006,” said Raiffeisen in its annual report, adding private consumption in the region had been fuelled by accelerating wage growth and rising employment. Meanwhile economies in southeastern Europe had been less dynamic, it said. Raiffeisen said it expected central and eastern European economies to cool somewhat this year.

Net interest income, Raiffeisen’s main revenue source, rose 38% to €600.2 million after provisions in the Q4. Commission income rose 30% while trading income fell by nearly 90%. Loan loss provisions, closely watched at banks in the region, where most customers lack a credit history and worries about credit quality are lingering, was €114.9 million as forecast by analysts. Raiffeisen said it aimed for a net profit of €1 billion in 2008 and would propose a dividend of €0.93 per share after €0.71 in 2006. Raiffeisen shares have lost nearly 20% this year, in line with the DJ Stoxx European banking index. According to Reuters data, the stock trades at just over 12 times estimated 2008 earnings, above the sector average of its western peers of nearly nine times. (Reuters)