Raiffeisen shares rise on strong Q1 profits

European shares are trading higher Tuesday after the bank reported upbeat Q1 results amid risk-related costs and a stronger Eastern European economic backdrop.

Raiffeisen shares rise on strong Q1 profits

Raiffeisen shares are trading notably in the green Tuesday, after the bank reported an upbeat first-quarter earnings release. The Austrian bank said net profits surged 80% amid an impressive contribution from risk-related costs.

By around 1350 BST, Raiffeisen shares were 4.48% higher at €30.07. The stock has been edging higher in recent weeks.

Raiffeisen earnings details

Gaining a lot of attention is the news that Raiffeisen’s consolidated Q1 profit grew 80% to €399 million in Q1, from €220 million a year earlier.

Other figures were also positive:

  • Net interest income rose 4% to €829 million from €797 million in Q1 2017.
  • Operating income gained 3% €1.3 billion from €1.3 million a year earlier.
  • General administrative expenses fell 0.7% to €740 million.
  • Earnings per share rose to €1.17 from €0.67 in Q1 2017.

"We had a good start into the year. We were able to increase our operating result compared with the previous year and release provisioning for impairment losses," said RBI CEO Johann Strobl.

The risk-related cost release was €83 million, which compared with a net allocation of €82 million in the same period a year earlier.

“This positive development was driven by a good macroeconomic environment with regard to inflows and successful recoveries totalling €135 million,” Raiffeisen said.

Positive outlook

Building on the strong start to the year for the bank, Raiffeisen also buoyed investors by confirming its outlook for 2018.

Specifically, the bank is still expecting to grow its loan activity, while little change is expected with regards to the risk costs for the bank over the year compared with 2017.

It’s also anticipating an 11% return on equity “in the medium term”. And, the bank “intends to distribute between 20% and 50% of the consolidated profit.”

"We are confident for the financial year and have ambitious plans for it. We will drive our digital projects forward and further improve RBI’s efficiency," Strobl said.

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