Eastern woes weighing on Raiffeisen Bank

Joseph Millis
AUSTRIAN group Raiffeisen Bank International posted a €119m (£95m) net loss in the third quarter, as the Russian rouble’s crash, tensions in Ukraine and Hungarian legislation hit its lending and banking operations.

Karl Sevelda, Raiffeisen’s chief executive, said that such “negative one-off effects” had hit the bank’s results. However, he hoped it would bounce back in 2015.

“The crisis in eastern Ukraine resulted in a strong increase of risk costs and the banking hostile legislation in Hungary led to high follow-up costs,” he said.

However, he added that the group’s operating performance had been stable, and he was largely satisfied with Raiffeisen’s progress in its other markets.

“Therefore, we expect to return to the profit zone in the coming financial year and we anticipate a consolidated profit in the mid triple-digit millions,” he said.

Chief financial officer Martin Gruell told a conference call with analysts yesterday that he believed the worst of the rouble’s devaluation was over. But he added that the impact on group capital from the currency's decline could push RBI’s core capital below 10 per cent of risk-weighted assets at the end of 2014.