Raiffeisen books €16 mln first-quarter profit in Hungary

Telco

Austriaʼs Raiffeisen Bank International (RBI) booked a €16 mln profit at its Hungarian subsidiary in the second quarter, compared to a €67 mln loss in the same period last year, an earnings report published today reveals, according to Hungarian news agency MTI.

Net interest income fell to €28 mln from €39 mln, while net income from commissions and fees grew to €32 mln from €28 mln in the base period. General administrative expenses were practically unchanged at €48 mln. Net provisioning for impairment losses grew from €20 mln to €23 mln.

The business made €40 mln profit on the "other results" line. In 2014 Q2 there was a €65 mln loss in this section due to the bank levy. RBI noted that 2014 results were distorted by provisions for the Settlement Act.

The businessʼs cost-to-income ratio jumped 30.8 percentage points to 102.6%. The business had total assets of €6.34 bln at the end of June, down from €6.06 bln twelve months earlier. Stock of client loans fell 17% to €4.10 bln. The share of corporate loans in the portfolio was 58.5%, the share of retail loans 27.3%. Client deposits were flat at €3.90 bln.

The Hungarian businessʼ number of branches fell to 101 from 122 during the period. Staff numbers dropped 12% to 2,123. Client numbers slipped 6% to 558,127.

Repositioning in Hungary is ongoing, the bank is refocusing on premium and affluent retail customers, while strengthening corporate banking set-up, RBI said in a comment to investors.

Further branch closures are planned; approximately one third could close in 2015 Q3. RBI hopes that repositioning will lead to 20% lower general administrative expenses by the end of 2016 compared to 2014.

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