Raiffeisen Bank Raises Guidance After 1Q Income Exceeded Forecasts

By Mauro Orru

Raiffeisen Bank International raised its income and capital-buffer ratio forecasts for the year after booking higher-than-expected profit and core revenues for the first quarter, buoyed by higher interest rates and strong growth in customer loans.

The Austrian bank late Thursday posted a net profit of 657 million euros ($723.5 million) for the three months to the end of March, up 48.7% on the year.

Net interest income--the difference between what lenders earn from loans and pay for deposits, and a key profit driver for retail banks--surged 40.5% to EUR1.39 billion, while net fee and commission income climbed 41.3% to EUR966 million.

The lender said higher interest rates will likely persist for some time as central banks seek to bring inflation to more sustainable levels.

Provisions for credit losses stood at EUR301 million compared with EUR319 million in last year's first quarter. Raiffeisen's capital-buffer ratio, known as core equity Tier 1, or CET1, stood at 16% at the end of March.

Analysts had forecast a net profit of EUR528 million on net interest income of EUR1.31 billion and net fee and commission income of EUR799 million, according to a company-compiled consensus.

For the year, Raiffeisen now expects net interest income of EUR5.3 billion to EUR5.4 billion, up from previous forecasts of EUR4.5 billion to EUR4.7 billion. Net fee and commission income should come in between EUR3.2 billion and EUR3.4 billion, up from EUR2.4 billion to EUR2.5 billion previously. The bank's CET1 ratio should be above 16%, ahead of previous guidance of more than 15%.

The bank said it would continue to look at potential deals to dispose of its Russian operations, which Raiffeisen opted to maintain even after the invasion of Ukraine, unlike several Western peers.

Write to Mauro Orru at [e-mail]; @MauroOrru94

(END) Dow Jones Newswires

May 05, 2023 02:10 ET (06:10 GMT)

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