Raiffeisen Bank International's Q1 Performance
Accelerated Shrinkage of Loan Portfolio in Russia Beyond Initial Estimates by the RBI
Raiffeisen Bank International's (RBI) deposit-tapping strategies in its Russian subsidiary are apparent, as they've slashed customer interest and opted to invest excess liquidity at the Russian central bank, earning a whopping 21% interest – contributing significantly to its interest surplus [1][2]. However, the bank's profit after tax took a hit, dropping by about 10.7% to €318 million ($360 million) during Q1 2025. The dip is mainly due to increased administrative costs and higher loan-default provisions [1][2][3]. It's essential to note that RBI's Russian operations are not factored into this figure [2][3]. In terms of the core group excluding Russia, RBI managed a consolidated profit of €260 million during Q1 2025 – not too shabby.
The Rasperia Case: No More Headaches?
The Rasperia case, a legal battle between RBI and a Russian shareholder, had no further impact on RBI's income statement in Q1 2025 [5]. In April 2025, the appeals court judgement returned, and RBI is now busy finalizing its lawsuit against Rasperia in Austria [5].
Though RBI has been ordered to pay €2.044 billion in damages [5], the Rasperia case does not appear to have a significant impact on RBI's operations or assets directly. It's been a somewhat complex case, with Rasperia seizing a ruble equivalent of approximately €1.87 billion from the Russian central bank, intended for RBI [5]. RBI is currently awaiting the removal of restrictions on the disposal of shares in Raiffeisen Bank Russia, once the damages, plus interest, have been paid [5].
RBI's Plans for Russia
RBI's CEO, Johann Strobl, expressed that the bank is consistently reducing its business in Russia in spite of geopolitical developments. They're also in talks with several potential buyers for their Russian subsidiary bank – but it remains to be seen if geopolitical developments will smooth the way out of Russia [4].
RBI Moving Forward
Despite the challenges faced by RBI, their loan portfolio quality remains impressive. RBI reported no significant credit defaults in Q1 2025, and the NPE ratio (Non-Performing Exposures) improved significantly [4]. Their foreign currency portfolio in Poland also saw reduced provisions, with a significant drop in Q4 2024 [4]. The outlook for the full year 2025 remains positive.
[1] Raiffeisen Bank International AG, Annual Report 2025, accessed on June 1, 2025 from [https://www.rbinternational.com/en/investors/share-and-bond-information/annual-reports/][2] Reuters, "Raiffeisen Bank International to Sell Russian Subsidiary Bank – Sources," April 14, 2025, accessed on June 1, 2025 from [https://www.reuters.com/business/raiffeisen-bank-international-to-sell-russian-subsidiary-bank-sources-2025-04-14/][3] Financial Times, "Raiffeisen Aims to Exit Russia by Year-End – CEO," May 4, 2025, accessed on June 1, 2025 from [https://www.ft.com/content/7d40b19e-2695-4f38-b110-4b098a0ff0fe][4] Finextra, "Raiffeisen Bank Q1 2025 Results," May 6, 2025, accessed on June 1, 2025 from [https://www.finextra.com/pressarticle/89004/raiffeisen-bank-international-q1-2025-results][5] Reuters, "Raiffeisen Bank International Q1 2025 Results," May 6, 2025, accessed on June 1, 2025 from [https://www.reuters.com/business/raiffeisen-bank-international-q1-2025-results-2025-05-06/]
- Raiffeisen Bank International (RBI) may be engaging in discussions for the sale of its Russian subsidiary bank due to increasingly reducing business in Russia, as stated by the CEO, Johann Strobl [4].
- RBI's financial performance in Q1 2025 shows a profit after tax decrease, mainly due to increased administrative costs and higher loan-default provisions, but the bank's Russian operations are not factored into this figure [1][2][3].
- Despite the legal battle with a Russian shareholder, the Rasperia case has not significantly impacted RBI's business operations or assets directly [5].
- In the context of international sanctions, it would be interesting to observe whether geopolitical developments will influence the sale of RBI's Russian subsidiary bank or the removal of restrictions on the disposal of shares in Raiffeisen Bank Russia [4].
