“RBI has founded, and not purchased, its Romanian subsidiary in 1998. Therefore, there is no risk of goodwill impairment. Our Romanian management has been enjoying an excellent reputation for many years, not least due to its very prudent risk management. In 2013, Raiffeisen Bank has earned a profit after tax of € 100 million, and we expect a profit there again this year,” RBI CEO Karl Sevelda stated.
Sevelda made the statements following numerous questions regarding the situation of Raiffeisen Bank International (RBI) in Romania and Hungary, the bank said.
According to the bank’s statement, as of year-end 2013, total goodwill within the RBI Group amounted to EUR544 million, while the majority thereof was accounted for in the focus markets Russia (EUR237 million) and Poland (EUR198 million). There was no goodwill recognized for RBI’s subsidiary banks in Romania and Hungary in the annual report for 2013.
Austrian banking group Erste, owner of lender BCR, announced that it expects risk costs to rise from the planned EUR1.7 billion to about EUR2.4 billion in 2014 due to higher provisions in Romania and Hungary.
“Increased risk provisions in Romania reflect recently increased efforts by the Romanian National Bank, ahead of the ECB’s asset quality review, to reduce NPLs in the banking system in an accelerated manner, and the implementation of lower recovery assumptions by BCR, based on offer prices received for large volume NPL packages,” Erste said in a statement
RBI also added that it has a robust position due to its diversified risk structure by customer groups, countries and products, it is one of the leading banks in 15 markets in Central and Eastern Europe and has a strong business basis in Austria as well.
The bank reported profit after taxes of EUR100 million in Romania in 2013, up 15.8% from EUR86 million a year earlier, due to lower income taxes, according to the bank’s financial report.
The bank’s profit before tax in Romania rose 3.1% to EUR104 million, from EUR101 million in 2012.
RBI posted a first-quarter profit of EUR22 million in Romania, after tax, down 27.5% from EUR30 million in the first quarter of 2013.
Raiffeisen group operates in Romania through Raiffeisen Leasing, Raiffeisen Capital & Investment, Raiffeisen Asset Management, Raiffeisen Investment Romania, Raiffeisen Banca pentru Locuinte and Raiffeisen Bank.