Raiffeisenbank has announced its IFRS financial results for Q1 2019

• Net interest income rose 8.6% compared to the 1st quarter of 2018 reaching RUB 13 321.0 million at the end of the 1st quarter of 2019.
• Net fee and commission income rose 9.9% compared to the 1st quarter of 2018 reaching RUB 4 207.4 million.
• Net profit grew by 0.6% compared to the 1st quarter of 2018 reaching RUB 9 655.5 million.
• High profitability indicators: ROE after tax stood at 26.3% (+ 0.6 percentage points compared to 2018).
• High operating efficiency ratios: CIR decreased to 38.8% (-1.2 percentage points from the 1st quarter of 2018).
• Growth in loan portfolio: Growth in gross loan portfolio was 5.8% at the end of the 1st quarter of 2019 reaching RUB 729 249.8 million. Retail loan portfolio demonstrated a 2.2% growth to RUB 272 535.3 million, with corporate loans rising 8.1% to RUB 465 714.5 million compared to the beginning of the year.
• Customer accounts fell slightly by 3.2% to RUB 844 705.8 million.
• Total Basel III capital adequacy ratio as of 31.03.2019 was 25.0%.

Key financial results

Income statement

	Q1 2019, RUB million	Q1 2018, RUB million	Change, %
Net interest income before provisioning for impairment losses	13 321.0	12 268.0	+8.6%
Additional provisioning	-341.8	1 199.5	-128.5%
Net fee and commission income	4 207.4	3 827.4	+9.9%
Trading result	2 568.2	1 500.8	+71.1%
Administrative and other operating expenses	(7 953.3)	(7 375.1)	+7.8%
Profit before tax	12 286.2	12 220.1	+0.5%
Net profit	9 655.5	9 602.7	+0.6%
Cost/income ratio	38.8%	40.0%	-1.2 p.p.
ROE before tax	33.4%	40.4%	-0.7 p.p.
ROE after tax	26.3%	31.7%	-5.4 p.p.

At the end of the 1st quarter of 2019, profit before tax reached RUB 12 286.2 million, up 0.5% from the same period of 2018, due to a positive growth in the net interest income, net fee and commission income, and trading result.
At the end of the 1st quarter 2019, the return on equity ratios (ROE before and after tax) remained at a high level: 33.4% and 26.3%, down 7.0 and 5.4 percentage points, respectively, from the 1st quarter of 2018. High ratios in the 1st quarter of 2018 were mostly caused by the release of provisions of RUB 1.2 billion and lower administrative expenses.

During the 1st quarter of 2019 the bank created additional provisions for loan impairment in the amount of RUB 341.8 million compared to the recovery of the total of RUB 1 199.5 million in provisions in the 1st quarter of 2018. Risk costs¹ in the 1st quarter of 2019 stood at -0.2% (in comparison with 0.8% at the end of 1st quarter of 2018).

Net fee and commission income increased by 9.9% to RUB 4 207.4 million due to the higher fee and commission income from settlement transactions, documentary business, and fees from insurance business.

Net interest income before provisioning for loan impairment grew by 8.6% from the first quarter of 2018 reaching RUB 13 321.0 million. Growth in the net interest income comes from higher interest income from the loan portfolio on the back of growing lending operations, and higher income from trading and investment securities and interbank loans.

The trading result² for the 1st quarter of 2019 reached RUB 2 568.2 million, up 71.1% from the same period of 2018 due to higher income from foreign exchange translation.

Operating income³ before provisioning for loan impairment at the end of the first quarter of 2019 was RUB 20 507.4 million, up 11.2% from the 1st quarter of 2018.
Operating expenses rose by 7.8% reaching RUB 7 953.3 million primarily due to higher staff expenses and deposit insurance costs. At the same time, the cost-to-income ratio (CIR) remains low: at the end of the 1st quarter of 2019 it was 38.8%.

	31.03.2019, RUB million	31.12.2018, RUB million	Change, %
Assets	1 099 980.2	1 126 012.7	-2.3%
Liquid assets	302 225.5	365 945.9	-17.4%
Loans and advances to customers before provisioning:	729 249.8	689 431.5	5.8%
Retail customers	272 535.3	266 762.3	2.2%
Small and micro businesses	22 647.4	22 030.9	4.3%
Medium-sized businesses	61 291.5	57 382.8	6.8%
Large businesses	372 455.6	343 255.4	8.5%
Customer accounts	844 705.8	872 403.4	-3.2%
Term borrowings from the parent bank	34 500.8	36 949.0	-6.6%
Equity	148 456.6	145 609.0	2.0%
Share of loans individually determined to be impaired in total loan portfolio	3.1%	3.1%	0.0 p.p.
Total Basel III capital adequacy ratio	25.0%	24.2%	+0.8 p.p.
N1.0 capital ratio (calculated in accordance with the CBR methodology)	13.5%	13.0%	+0.5 p.p.

The share of liquid assets in the 1st quarter of 2019 was 27.5%. The investment portfolio of the securities maturing in less than 12 months reached RUB 68 561.4 million, сash and сash equivalents reduced by 3.2% to RUB 218 807.5 million due to a 32.6% fall in the reverse REPO business, which stood at RUB 73 161.3 million. The Bank has continuously outperformed CBR’s liquidity requirements: as of 01.04.2019, the N2 ratio was 111.3% (compared to the required minimum of 15%), N3 was 160.5% (compared to the required minimum of 50%), and N4 was 48.3% (compared to the required maximum of 120%).

The portfolio growth was observed in the following segments: medium-sized businesses (+6.8% to RUB 61 291.5 million), small and micro businesses (+4.3% to RUB 22 967.4 million), retail customers (+2.2% to RUB 272 535.3 million) and large corporates (+8.5% to RUB 372 455.6 million).
The portfolio was growing on the back of a stable quality of assets, the share of loans individually determined to be impaired in the gross loan portfolio was 3.1%.

Customer accounts reduced by 3.2% from the end of 2018 reaching RUB 844 705.8 million. Customer accounts of individuals fell by 0.2% to RUB 465 591.2 million. The share of current accounts in liabilities of retail customers rose to 75.8%.
Corporate accounts fell by 6.5% compared to the end of 2018 to RUB 379 114.5 million.
The loan-to-deposit ratio in 2018 was 86.3%.

Term borrowings from the parent bank decreased by 6.6% from the end of 2018 reaching RUB 34 500.8 million due to currency effect. The share of the fixed-term funding from parent bank in total bank’s liabilities was 3.6% as of 30.04.2019.

The Bank’s equity increased by 2.0% from the end of 2018 reaching RUB 148 456.6 million. In 2019, the Bank paid dividends totaling RUB 6 842.1 million.
The bank has considerable capital adequacy and fully meets the regulatory capital requirements.

Capital adequacy ratios significantly exceed the minimum allowable limits and as of 01.04.2019 reached: N 1.1. — 10.1% (required minimum of 4.5%), N 1.2 — 10.8% (required minimum of 6.0%), N 1.0 — 13.5% (required minimum of 8.0%). Total Basel III capital adequacy ratio as of 30.04.2019 was 25.0%.