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Raiffeisen Bank reports hefty H1 loss in Hungary

Raiffeisen Bank International posted €37 million in net losses on its activities in Hungary in the first half of 2011 as operating income fell, provisions rose sharply and the bank paid €22 million in the extraordinary bank levy, the bank's H1 semi-annual report published on Thursday shows.

The second quarter alone showed some improvement over the first quarter. Loans and costumer numbers rose in Q2 although were still down from twelve months earlier.

Operating income fell 15.9% from H1 2010 to €185 million with net interest income falling 4.0% to €160m, net income from fees and commissions falling 12.5% to €45m and net trading income falling more than 50% to €13 million.

In Q2 , net interest income fell 9.3% from Q1 but net fee and commission rose slightly and net trading income more than doubled, the figures reveal.

The group paid €22 million in the extraordinary bank levy in the first half, and expects to pay €40 million for the full year.

The Hungarian group cut general administrative expenses by 9.3% to €108 million in H1 2011, but expenses still fell less than operating income, and the cost-income ratio rose to 58.5%. Headcount rose 2.3% in twelve months, although fell 1% in the second quarter to reach 3,200 on June 30, 2011.

Net provisioning for impairment losses rose a sharp 44.1% in one year to €115 million in H1, and it also grew at a similar rate from the first to the second quarter, when it totaled €68 million.

Loans and advances to costumers fell 3.2% in twelve months to €6.185 billion at the end of June, but they already grew by 2.4% from the end of March. The figures reveal a shift from corporate towards retail loans in the portfolio.

A total of 68.3% of the loans was denominated in foreign currency, with their share falling 10.9% in twelve months, though rising 0.6pp from the end of March 2011.

Costumers' deposits rose, however, a sharp 11.3% to €5.176 billion, and the loan-to-deposit ratio fell as a result to 119.5% at the end of June.

Total assets of the Hungarian Raiffeisen group rose 2.7% in twelve months to €8.857 billion at the end of June.

The Raiffeisen Hungary group had close to 646,000 customers at the end of June, 0.3% less than one year earlier, but 0.5% more than at the end of March.