Raiffeisen cheers as bad loans fall

 
City A.M. Reporter
AUSTRIAN lender Raiffeisen Bank International’s first-quarter net profit fell nearly a fifth amid a hit from taxes but still beat market expectations as provisions for bad loans fell by more than a third.

Emerging Europe’s third-biggest lender by assets reiterated yesterday it expected its non-performing loan (NPL) ratio to peak later this year amid robust economic growth in the region.

The ratio fell 37 basis points in the quarter to 8.6 per cent amid net releases in all segments except southeastern Europe.

High margins have allowed Raiffeisen to remain profitable in emerging Europe, but investors are looking for a clear reversal of the bad-debt cycle.

RBI group profit fell 19.1 per cent to €270m (£232.8m), ahead of the average estimate of €256m in a poll of analysts. The company said provisions for bad loans fell 35.9 per cent to €208m, compared with a poll average of €278m.

“Our profit before tax for the period increased by three per cent compared with the same period last year, above all because of satisfying developments in both net interest income and net fee and commission income,” chief executive Herbert Stepic said.