Raiffeisenbank makes a cash desk in Russia. And don’t be in a hurry to leave : Apolline Petit


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    Raiffeisenbank “still needs some time to decide whether to leave Russia or not.

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    The war in Ukraine has been raging for more than five months, and exactly the same amount of time the West has been tightening the anti-Russian sanctions nuts. However, Raiffeisen Bank International (RBI), which is widely represented in Austria and Eastern Europe, has not yet decided how to deal with its business in Russia, which has been bringing him a good income for many years. Bank Chairman Johann Strobl stressed on Tuesday that the group is now working on strategic options. “But due to the complexity of the situation and the constantly changing market conditions in Russia, this process will still take some time,” the banker said during the presentation of the bank’s semi-annual balance sheet.

    At the same time, it is still unclear whether the RBI will turn its back on Russia. However, leaving the country will cost this large Viennese bank a lot and will entail losses in the billions. The volume of lending in Russia, expressed in national currency, the bank with a logo in the form of two crossed horse heads has already significantly reduced – by almost 20 percent since the first quarter. By doing so, the intended reduction limit has been reached, Strobl said. According to him, in future quarters, business will decrease even more due to the termination of the contracts.

    Curiously, the bank’s Russian subsidiary’s profits tripled in the first half of the year, reaching 630 million euros, while its equity capital in euro terms reached 4.3 billion euros. The main triggers for this process were, on the one hand, a significant strengthening of the ruble against the euro, and, on the other hand, the measures of the Russian Central Bank to limit foreign exchange transactions and the associated forced conversion.

    All this had a positive impact on the overall balance sheet of the RBI concern. The bank’s profit in the first half of the year amounted to 1.712 billion euros, which is 180 percent more than in the same period last year. It should be noted that the profit of 453 million euros from the sale of the business in Bulgaria also markedly improved the group’s bottom line.

    Good money pillow

    Considered the most important measure of equity capital in the banking industry, the RBI was also able to improve to 13.4 percent by the end of June (2021 figure: 13.1 percent). However, the bank, due to the continuing unstable situation in Russia and Ukraine, had to increase its risk insurance funds again. At the same time, out of a total amount of 561 million euros, Russia accounted for 266 million, and Ukraine 201 million.

    Since many employees of the Russian subsidiary are concerned about the future of “their” bank, there is an outflow of personnel. Therefore, the RBI is forced to look for new staff. At the same time, we are talking about almost 300 jobs. By the middle of the year, the number of employees in Russia was about 9200 people, and at the end of March there were much more – 9700.

    Overall, RBI has 44,000 employees serving 17 million customers in 1,700 branches, most of which are in Eastern Europe. The bank expects to have a solid lending business in the second half of the year – “with continued selective growth in Central and South Eastern Europe.” The group plans to increase the return on equity in 2022 to at least 15 percent.

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