Provisions release puts RBIʼs Hungarian business in black
Raiffeisen Bank International (RBI) booked a €19 million profit at its business in Hungary last year, a big improvement over the €389 mln loss in the base period, an earnings report released yesterday shows, according to Hungarian news agency MTI.
RBI said €67 mln was released from the local businessʼs provisions for the implementation of borrowers relief legislation. In 2014, €251 mln in provisions were set aside for the relief.
The bottom line was also supported by a big drop in provisioning for retail and corporate loans, which fell 57% to €56 mln.
Net interest income declined 21% to €121 mln due to low interest rates.
CEO Karl Sevelda noted that the Hungarian business was restructured to strengthen its corporate segment and focus on affluent retail clients. The businessʼs network was also consolidated, with the closing of 42 branches, he added.
The business had total assets of €6.394 billion at the end of last year, down 8% from twelve months earlier. Client loans stood at €3.481 bln and client deposits reached €4.233 bln.
ROE was 4.3%, after tax.
At a press conference in Budapest yesterday, Raiffeisen Bank Zrt. CEO Heinz Wiedner said the lender had after-tax profit of HUF 8 bln last year, compared to a loss of about HUF 115 bln in the previous year.
Stock of non-performing loans was down 43% at HUF 233 bln.
Risk provisions fell from HUF 39 bln to HUF 13 bln, as part of the impact of settlement due under the borrowersʼ relief legislation failed to materialize, Wiedner said.
Net interest revenue slipped 13% to HUF 64.2 bln.
Total assets fell 8% to HUF 1.971 trillion. Lending stock dropped 21% to HUF 1.166 tln. The lenderʼs NPL ratio improved to 21% from 27%.
Last year, Raiffeisen sold a large volume of bad loans to other market players, and it began talks with MARK, a vehicle established by the National Bank of Hungary to buy distressed assets, this year, Wiedner said.
Retail lending stock dropped 17% and corporate loans were down 12%.
The ratio of FX loans dropped to 32% from 56%, in part because of the mandatory conversion of most retail lending stock.
Deputy-CEO Ferenc Kementzey said Raiffeisen Bankʼs lending and leasing outlays using cheap financing from the National Bank of Hungaryʼs Funding for Growth Scheme came to HUF 137 bln.
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