Austrian RBI receives signs of interest in doing business in Russia

The logo of Raiffeisen Bank International is seen at its headquarters in Vienna, Austria, March 1, 2022. REUTERS/Leonhard Foeger

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  • One of the European banks most exposed to Russia
  • Explored a possible exit from Russia
  • Q1 better than expected but outlook revised down

VIENNA, May 4 (Reuters) – Austrian bank Raiffeisen Bank International (RBIV.VI), one of Europe’s banks with the most exposure to Russia, has received unsolicited expressions of interest for its operations in Russia, said the bank manager on Wednesday.

RBI studied strategic options for the company, including a possible withdrawal from Russia, following the Russian invasion of Ukraine. Read more

The lender has been operating in Russia since the collapse of the Soviet Union 30 years ago. Its operations there, Russia’s 10th-largest bank by assets, contributed nearly a third of the group’s net profit last year.

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“We have been approached,” chief executive Johann Strobl told analysts. He said in the coming weeks the bank would try to gauge interest from those parties, which he did not name.

Strobl said the options include a full or partial sale of the business or a spin-off. He said a decision can take time.

“We want to understand as quickly as possible what options we have,” he said.

On Wednesday, the bank said its first-quarter profit had doubled, but it was revising its outlook due to weaker loan growth and higher risk assumptions.

The better-than-expected profit was helped by higher fees and commissions due to increased client activity from its foreign exchange business in Russia, although risk provisions wiped out many of those gains.

Moreover, loan growth in the country has “largely come to a halt”.

Consolidated profit for the quarter was 442 million euros ($464.59 million). This was up from 216 million euros a year earlier and exceeded the 165 million euros expected by analysts.

Quarterly results were penalized by 319 million euros in impairments, almost entirely for activities in Russia, Ukraine and Belarus.

The bank expects “stable” lending activity in 2022, compared to previous expectations of growth in the 7% to 9% range.

He also expects a funding ratio of up to 100 basis points, down from earlier expectations of 40 basis points.

The bank’s shares have fallen 47% since Russia’s February 24 invasion of Ukraine, which Russia describes as a “special military operation”.

($1 = 0.9514 euros)

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Reporting by Alexandra Schwarz-Goerlich and Tom Sims Editing by Miranda Murray, Louise Heavens, Bradley Perrett and Barbara Lewis

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