RZB group: emphasis on increasing the level of capitalization in 1H 2016
Vienna. August 26th
Successful implementation of several capitalization measures
Profit before tax fell to 300 million euros (1 half year / 2015 - 549 million euros)
Profit after tax decreased to 123 million euros (1 half pp. / 2015 - 381 million euros)
Consolidated profit decreased to 12 million euros (1 half year / 2015 - 215 million euros)
Net provisions for impairment losses declined by 33% to EUR 403 million
The volume of total assets shrank by 0.5% to 138 billion euros (compared to the end of 2015)
The ratio of the basic capital of level 1 (total) increased by 0.7 pp. to 10.6% compared with the end of 2015
The ratio of basic capital 1 (transitional) remained unchanged at 10.4%
The Raiffeisen Zentralbank Osterreich AG (RZB), which covers the central institution - the Raiffeisen Banking Group Austria (RBG) and its subsidiaries, including the sub-group Raiffeisen Bank International AG (RBI), the UNIQA insurance group and specialized subsidiaries - has completed The 1 st half-year of 2016 with a positive result, which was strongly influenced by complex economic and regulatory conditions. The profit before tax amounted to 300 million euros, and the consolidated profit of RZB is 12 million euros.
Walter Rothensteiner, RZB's Board Chairman, summed up the results of the first six months of the year: "Our semi-annual results were strongly influenced by the low interest rates on the market, and they are also distorted by the negative effect of 126 million euros on the partial sale of our shareholding in UNIQA. We continue to focus on improving our capital base. "
Increasing the level of capitalization
Numerous measures taken earlier, such as the successful launch of the RBI transformation program or the sale of the Hilton hotel in Vienna, have already had a positive effect. "We have significantly improved our capital base in the first half of 2016. The fact that the coefficient of our basic capital level 1 (total) is 10.6% indicates that we are moving in the right direction. In parallel, we are also working to further increase this level ", - explained Mr. Rothensteiner. The closure of the UNIQA share sale scheduled for this fall, as well as the merger between Raiffeisen-Landesbanken-Holding GmbH and R-Landesbanken-Beteiligung GmbH in RZB, will provide additional revenue. The planned agreement with UNIQA is expected to improve the base-level ratio of level 1 (general) to RZB by 60 basis points by the end of the current year and 40 basis points of base-level capital (transitional) by 40 basis points. "Taking into account the partial sale of UNIQA shares, the ratio of our basic capital level 1 (total) will already exceed 11%," comments Walter Rothensteiner.
In addition, within the framework of the general program of adaptation of the RZB Group to the increased regulatory requirements and to simplify the corporate structure, RZB and RBI are currently considering the possibility of further merger. "As for the potential merger, we plan to announce our decision in the second half of September. The merger of RZB and RBI could, among other things, have a positive effect on the level of capitalization of the RZB Group due to the termination of minority shareholder rights, "continued Mr. Rothenstein.
Reduction of provisions for loan losses
The amount of net allowance for impairment losses declined by a total of 33% or EUR 203 million, to EUR 403 million in comparison with the same period last year. This was due to the decline in net reserves for loans to households to 107 million euros (the most significant decrease was recorded in Ukraine). In addition to RBI, there was no need for new deductions for net impairment losses on the RZB Group in the first half of 2016.
Operating income decreased by 6% or EUR 150 million, to EUR 2 488 million in comparison with the first half of last year, and net interest income continued to decline - by 13% to EUR 1 586 million - due to low interest rates. Net trading income rose to EUR 88 million in the first half of the year (EUR 94 million in annual terms) due to less currency fluctuations and an improvement in the open currency position in Ukraine. Net fee and commission income decreased by 1% to 773 million euros compared to the same reporting period last year, due to other factors, and FX-effects, lower guaranteed income in RBI and the termination of car loans business in Russia. RZB's total assets were generally stable, with a modest drop of 0.5% to EUR 137 677 million.
Increase the ratio of costs and revenues
General administrative expenses increased by 3% to EUR 1 541 million compared to the first half of 2015, especially due to the increased costs of transferring funds to the bank to resolve banking problems. Cost-to-income ratio increased by 5 pp. to 61.9% as well as a decrease in net interest income. The average number of staff decreased by 2 751 persons to 53 234 persons per year. The number of branches has decreased by 139 - to 2 658.
At the reporting date, coeff
