RBI posts consolidated profit of € 910 million in the first three quarters of 2017

Raiffeisen Bank International has said that it has posted a consolidated profit of €910 so far in 2017. Speaking about the results, they have commented that:

”We are very satisfied with the results for the first nine months. We increased net interest
income slightly and net commission income significantly, and we kept general
administrative expenses stable year-on-year,” said RBI-CEO Johann Strobl.

The group headed by Raiffeisen Bank International AG (RBI) posted profit before tax of
€ 1,301 million for the first three quarters of 2017, an increase of 66.6 per cent or € 520
million compared with the same period of 2016. Net provisioning for impairment losses
decreased significantly year-on-year, and operating business showed a positive
development as well: Operating income increased 4 per cent year-on-year, or € 151
million to € 3,889 million, while general administrative expenses remained stable. Profit
after tax increased 93.2 per cent year-on-year to € 1,012 million. Consolidated profit for
the reporting period was € 910 million, which corresponds to an increase of 109.9 per
cent or € 476 million.

”The broad economic upswing in CEE is reflected in all our segments. We post profits in
all our markets,” said Strobl.

Net interest income increased slightly
In the first nine months of 2017, net interest income increased 2 per cent year-on-year,
or € 52 million, to € 2,391 million. This was mainly attributable to a € 62 million currency-
related increase in net interest income in Russia, whereas small declines were booked
in other markets due to continuing low interest rates.

Net fee and commission income improved 8 per cent year-on-year, or € 90 million, to
€ 1,271 million due to currency appreciation in Eastern Europe and higher revenues.
Net trading income increased € 42 million year-on-year to € 183 million.

General administrative expenses stable
Compared to the same period of the previous year, general administrative expenses
declined € 3 million to € 2,291 million. Staff expenses declined € 4 million year-on-year
to € 1,145 million.

The cost/income ratio improved 2.5 percentage points to 58.9 per cent, largely due to
higher operating income.

Net provisioning for impairment losses down 68 per cent

Net provisioning for impairment losses fell 68 per cent, or € 341 million, overall year-on-
year to € 160 million.

Compared to year-end 2016, the NPL ratio improved 2.0 percentage points to 6.7 per
cent. Non-performing loans compared to loan loss provisions of € 3,778 million, resulting
in an NPL coverage ratio of 69.4 per cent, in comparison to 75.2 per cent at the end of
2016.

“We made very good progress regarding the reduction of non-performing loans and
already exceeded our objectives for the full year in this regard,” said Strobl.

Common Equity Tier 1 Ratio (fully loaded) of 12.5 per cent

Total capital amounted to € 12,532 million as at 30 September 2017. This corresponds to
an increase of € 728 million compared to the 2016 year-end figure.

Based on total risk, the common equity tier 1 ratio (transitional) was 12.7 per cent and
the total capital ratio (transitional) was 18.0 per cent.

Excluding the transitional provisions as defined in the CRR, the common equity tier 1
ratio (fully loaded) stood at 12.5 per cent and the total capital ratio (fully loaded) was
17.9 per cent.

Taking account of the results for the third quarter of 2017, the capital ratios would be
0.4 percentage points higher in each case.

Comparison of results with the previous quarter

Compared to the second quarter of 2017, net interest income increased 1 per cent or
€ 11 million to € 803 million in the third quarter of 2017.

Net fee and commission income declined 1 per cent or € 4 million quarter-on-quarter
to € 429 million.
Compared to the previous quarter, net trading income declined 28 per cent or
€ 19 million to € 50 million.

In the third quarter of 2017, general administrative expenses were € 718 million, down
5 per cent or € 40 million quarter-on-quarter.

In the third quarter of 2017, net provisioning for impairment losses amounted to
€ 84 million, whereas in the second quarter a net release of € 4 million was posted due
to NPL sales and releases of provisions for impairment losses.

Other results fell € 11 million, from minus € 26 million in the second quarter of 2017 to
minus € 37 million in the third quarter of 2017.
In the third quarter of 2017, consolidated profit amounted to € 322 million representing
a decrease of 12.2 per cent or € 45 million compared to the second quarter of 2017.

Outlook

RBI’s outlook remains unchanged.
RBI targets a CET1 ratio (fully loaded) of around 13 per cent in the medium term.
After stabilizing loan volumes, the bank looks to resume growth with an average yearly
percentage increase in the low single digit area.

RBI expects net provisioning for impairment losses for 2017 to be significantly below the
level of 2016 (€ 758 million), supported by a high level of recoveries and gains on NPL
sales.

After reaching the previous goal of approximately 8 per cent ahead of schedule, the
bank expects the NPL ratio to reduce further in the medium term.
RBI further aims to achieve a cost/income ratio of between 50 and 55 per cent in the
medium term, unchanged from the previous target.

The bank’s medium term return on equity before tax target is unchanged at
approximately 14 per cent, with a consolidated return on equity target of approximately 11 per cent.