Raiffeisenbank earned RUR 28 bn within 9 months of 2020 according to IFRS results

Raiffeisenbank announces financial results for 9M 2020. All indicators are presented in accordance with International Financial Reporting Standards (IFRS) and may differ from the Russian data in the financial report of Raiffeisen Bank International AG (RBI) due to the differences arising from the consolidation and conversion of indicators in Euro.

• Net profit decreased by 2.2% to RUR 28 016 mn in 9 months of 2020
• Net interest income increased by 9.4% to RUR 45 919 compared to 9 months of 2019
• Net fee and commission income grew by 2.7% to RUR 15 119 mn
• High profitability ratios: ROE after taxes was 20.6% (-2.7 ppt compared to 12 months of 2019).
• Loan portfolio growth: the loan portfolio before provisions increased by 5.7% in the first 9 months of 2020. Retail loan portfolio grew by 1.6% to RUR 315 554 mn, large corporate business grew by 11.7% to RUR 432 408 mn, middle business decreased by 6.7% to RUR 72 043 mn, small and micro businesses grew by 1.6% to RUR 27 801 mn, compared with the beginning of the year.
• Customer accounts as of September 30, 2020 amounted to RUR 1 102 603 mn, up by 15.4% year-to-date; the growth of funds in accounts and deposits of individuals to RUR 596 973 mn amounted to 24.2%; the growth of funds on accounts and deposits of legal entities to RUR 503 835 mn amounted to 12.9%, while the growth of current accounts of legal entities was +47.3% to RUR 337 727 mln.

Key financial results

Income statement

For the first 9 months of 2020 profit before tax decreased by 4.5% compared to the same period of the last year and amounted to RUR 35 558 mn. The Bank’s net profit reached RUR 28 016 mn (-2.2% compared to the 9 months of 2019).

During 9 months of 2020, the Bank created additional provisions for loan impairment in the amount of RUR 8 193 mn compared to RUR 2 390 mn for the same period of the last year due to the current macroeconomic situation. Cost of risk for 9 months of 2020 amounted to 1.3% annualized.

The Bank’s return on equity ratio (ROE before and after tax) amounted to 26.2% and 20.6% respectively for 9 months of 2020, down 5.5 and 3.8 percentage points compared to the same period of 2019.

Net fee and commission income increased by 2.7% to RUR 15 119 mn due to an increase in fee and commission income from settlement transactions, fiduciary activities and commissions on documentary business and guarantees.

Net interest income before provision for loan impairment showed an increase by 9.4% compared to 9 months of 2019 and amounted to RUR 45 919 mn. The decrease of expenses for interest rate and foreign exchange swap contracts as well as the decrease of term deposits for individuals and legal entities had a positive impact on dynamics of net interest income.

The trading result¹ for 9 months of 2020 amounted to RUR 8 482 mn, up 7.3% compared to the same period of 2019, due to the growth of unrealized income from financial derivatives transactions as well as due to the growth of FX revaluation expense.

The Bank’s operating income before provisions for loan impairment² for 9 months of 2020 amounted to RUR 69 575 mn, up 6.2% from 9 months of 2019, due to the growth in net interest, net fee and commission income and trading result.

Operating expenses slightly increased by 1.6% and amounted to RUR 26 069 mn due to the slow growth of staff costs, IT services expenses growth and decline in DIC. The cost-to-income ratio (CIR) was at a low level: at the end of 9 months of 2020, CIR was 37.5%.

Financial statement

Share of liquid assets as of the end of 9 months of 2020 was 36.3%.

Gross loan portfolio increased by 5.7% in 9 months of 2020 and amounted to RUR 847 806 mn. The positive dynamics was driven by loan portfolio growth in the following segments: large corporate business (+11.7% to RUR 432 408 mn), small and micro business (+1.6% to RUR 27 801 mn), retail business (+1.6% to RUR 315 554 mn). Key growth drivers of the retail loan portfolio were mortgage loans, which increased in 9 months of 2020 by 6.6% to RUR 150 848 mn.

Share of impaired loans in total loan portfolio amounted to 3.3% at the end of 9 months of 2020. Share of past due but not impaired loans (less than 90 days) amounted to 0.6% of the loan portfolio before provisions.

Customer accounts as of September 30, 2020 grew by 15.4% compared to the end of 2019 and amounted to RUR 1 102 603 mn. Retail customer accounts showed a growth of 24.2%, mainly due to the growth in retail current accounts by 45.5% to RUR 528 183 mn. Share of current accounts in retail customer accounts amounted to 88.5%.
Corporate customer accounts decreased by 12.9% to RUR 503 835 mn from the end of 2019 driven by growth in the share of current accounts (47.3%) and the decrease of corporate term deposits (-23.5%).

The loan-to-deposit ratio as of 30.09.2020 was 76.9%.

Term borrowings from the Parent Bank increased in 9 months of 2020 by 28.4% compared to the end of 2019 as a result of the FX revaluation and amounted to RUR 41 998 mn.

Equity at the end of 9 months of 2020 increased by 5.2% compared to the end of 2019 and amounted to RUR 185 777 mn.

Capital adequacy ratios of N1.1 and N1.2³ as of October 1, 2020, amounted to 13.11% and 13.97%, respectively (with regulatory minimums of 8.0%* and 9.5%*). N1.0 ratio was 16.54% as of the same date (with a regulatory minimum of 11.5%*). Total capital adequacy ratio according to Basel III as of September 30, 2020 was 27.16%.