The Raiffeisen Bank group closed the first half of this year with consolidated after-tax losses of HUF 3.3 billion compared to profits of HUF 18.1 billion in the same period last year on sharply increased provisioning, the bank's report published on the Budapest Stock Exchange website on Tuesday shows.
The IFRS consolidated preliminary report said the bank group's total assets amounted to HUF 2,570 billion on June 30, 2009, down 1% from six months earlier. Consolidated net provisioning surged to HUF 36.4 billion in H1 this year from HUF 4.8 billion one year earlier, resulting in losses despite an almost 8% rise in operating income and a 1.8% drop in operating expenses, to HUF 41.9 billion. Group-level net interest revenue fell 28% to HUF 31.1 billion and net income from fees and provisions fell 17.4% to HUF 11.8 billion, but this was more than offset by a 64.2% rise of other revenues, including net trading revenue and dividends, to HUF 32.5 billion.
Consolidated total assets fell 1.1% from the end of 2008 to HUF 2,543 billion at the end of June, 2009, and net assets fell 9.2% to HUF 142.1 billion.
Raiffeisen Bank itself had unconsolidated Hungarian-accounting-standards after-tax profit of HUF 2.3 billion in the first six months of 2009 as against HUF 20.77 billion one year earlier. The bank's total assets came to HUF 2,647 billion, 0.5% less than at the end of last year.
The value of the bank's loans stood at HUF 1,773 billion at the end of the first half of 2009, 7% down from six months earlier. Client deposits amounted to HUF 1,482 billion, 1.4% down from the end of last year.
Among liabilities, risk provisions rose 10.5% in the first half of 2009 to close to HUF 27 billion, 30% more than the level of the first half of last year. The bank set aside HUF 51.5 billion as impairment and risk provisions against contingent and future liabilities in H1 2009, 73.5% more than in H1 2008.
Net assets of Raiffeisen Bank rose 2.2% in six months to HUF 135.7 billion at the end of June, and total assets fell 0.6% to HUF 2,647 billion.
The bank's capital adequacy ratio was 9.6% at the end of the first half of 2009. The report says the owner Raiffeisen International fully supports the operation of its Hungarian subsidiary bank and secures continuous capital supply. The bank received EUR 20 million in subordinated loan capital on February 27, 2009, provided by Raiffeisen International's parent bank Raiffeisen Zentralbank Österreich AG.
Due to the worsening economic circumstances, the bank's management projects slower business growth in 2009 and in the coming years. Accordingly, and keeping cost-efficiency in mind, Raiffeisen Bank embarked on a 8% lay-off programme affecting 315 employees in February this year. The bank also announced closures of 20 branches on August 14, envisaging a reduction of 10-12% in both in the size of the branch network and in staff numbers. (MTI-Econews)