20
Raiffeisenbank 1HY 2019 results
Raiffeisenbank
1HY 2019 results
The information contained in this confidential document (the "Presentation") has been prepared by AO Raiffeisenbank (the "Bank"). It has not been fully
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Raiffeisenbank: 2Q 2019 results 2
Disclamer
3
Agenda
AO Raiffeisenbank at a glance
Operating environment
Strategy guidance
Financials
AO Raiffeisenbank at a glance
All figures are provided in accordance with Raiffeisenbank IFRS financial statements and may differ from the Russian data in Raiffeisen Bank International AG (RBI) financial report because of the difference arising from
consolidation and translation to Euro.
*Middle business means companies with revenue from 500 mn RUB to 5 bn RUB
Business growth combined with high profitability and the best credit quality
Overview:Ratings:
Baa3
BBB-
AAA
ruAAA
In Russia since
1996
>120 YEARSof banking tradition as part
of Raiffeisen Bank
International
systemically important
Bank in Russia
# 2 in premium banking by
Frank research Group
# 2 among most reliable
banks in Russia by Forbes
Best foreign investment
bank in Russia by EMEA
Finance
The best Russian bank in
Private Banking by
Euromoney
Balance sheet (RUB bn) 1H 2019 2018 Change
Total assets 1 179.0 1 126.0 +4.7%
Liquid assets 341.4 365.2 -6.5%
Gross Loans 761.7 689.4 +10.5%
Retail 291.2 266.8 +9.1%
Middle* 69.9 57.4 +21.8%
SME 25.3 22.0 +14.7%
Large corporate 375.4 343.3 +9.4%
Customer accounts 885.5 872.4 +1.5%
Retail 468.2 466.7 +0.3%
Large corporate 308.6 289.0 +6.8%
Middle 44.7 50.2 -10.8%
SME 62.2 64.7 -3.8%
Income statement (RUB bn) 1H 2019 1H 2018
Operating income 42.2 37.2 +13.7%
Profit after tax 19.1 17.4 +9.9%
Key ratios 1H 2019 1H 2018
ROE 25.1% 28.2% -3.1 ppt
CIR 39.5% 40.7% -1.2 ppt
CoR -0.3% 0.04% -0.34 ppt
NIM 5.1% 5.9% -0.8 ppt
Sochi
Belgorod
Volgograd
Yekaterinburg
Kaliningrad
Kaluga
Krasnodar
Bryansk
Lipetsk
Moscow
Anapa
Omsk
Orel
Perm
Petrozavodsk
Pyatigorsk
Rostov-on-DonSamara
St Petersburg
Saratov
Smolensk
SyktyvkarTula
TyumenUfa
Miass
Cherepovets
Yaroslavl
Nizhny Novgorod
Voronezh
Novorossiysk
KurskZheleznogorsk
Saransk
Kazan
Kirov
Chelyabinsk
Ryazan
Surgut
Tomsk
Berdsk
Novosibirsk
Kemerovo
Krasnoyarsk
Irkutsk
AO Raiffeisenbank at a glanceBranch network, digital reach and client base
43 cities with 174 as of
01.07.2019 outlets and 5
branches
> 90 cities with remote SME digital
service o/w 41 in Moscow region in 2Q
2019
2 087 RBRU ATMs and 22 108 ATMs partners’ network 5
Active customer base 2Q 2019
Retail clients 1 876 880
Large corporate clients 6 801
Mid corporate clients 7 199
SME 120 044
Raiffeisenbank: 2Q 2019 results based on RBI public results
АО Raiffeisenbank at a glance
Strong contribution to the Group’s profitability
SoutheasternEurope
A*: EUR 25.7 bn
P: EUR 256 mn
SА: 17.3%
NPL: 3.3%
NIM: 3.61%
CentralEurope
А: EUR 41.3 bn
P: EUR 278 mn
SА: 27.8%
NPL: 2.5%
NIM: 2.14%
Group Corporates &Markets**
А: EUR 53.4 bn
P: EUR 178 mn
SА: 36.0%
NPL: 1.9%
NIM: 1.28%
Reconciliation
A: EUR - 26.2 bn
P: EUR - 771 mn
Eastern Europe(incl. Russia)
А: EUR 21.0 bn
P: EUR 462 mn
SA: 14.1%
NPL: 2.5%
NIM: 5.76%
Russia
А: EUR 16.4 bn
P: EUR 323 mn
NPL: 1.9%
NIM: 5.0%
Corporate Center***
А: EUR 33.4 bn
P: EUR 432 mn
SА: 22.5%
€ 148.6 BN totalassets€ 834 MN profit
before tax
* А — assets, P — profit before tax, SА — share in total RBI’s assets, NPL — share of non-performing loans, NIM — net interest margin
** Operating business booked in Austria
*** Central control functions in RBI AG, RBI AG’s equity participations, other Group units and minority interests 6
55.2% 55.2%
38.7%
Central Europe Southeastern Europe Russia
Lowest cost to income ratio among CEE segments Highest ROE before tax among CEE segments
33.9%
14.9%19.3%
Central Europe RussiaSoutheastern Europe
Raiffeisenbank: 2Q 2019 results, Interfax ranking
АО Raiffeisenbank at a glance
Top 5 bank in Russia by net profit and #11 by assets
Foreign owned: 5.3%,
0/w Raiffeisen: 1.4%
Market share
State owned: 69.3%
Privately owned: 25.5%
7
444.2
112.0 28.9 28.0 19.9 18.0 16.4 13.7 13.1 11.5
#5 by net profit (in bn RUB)2 818.8
904.6 642.4
343.2 149.9 146.2 141.4 116.9 107.2 82.3
#4 by retail current accounts (in bn RUB)
Market share
State owned: 65.9%
Privately owned: 24.6%
6 667.4
2 857.1
540.6 518.9 436.4 359.8 325.2 320.2 293.4 244.4
#9 by retail loans (in bn RUB)
Market share
State owned: 71.5%
Privately owned: 19.9%Foreign owned: 8.6%
0/w Raiffeisen: 1.8%
Foreign owned: 9.5%
0/w Raiffeisen: 5.4%
27.6
13.8
6.0 3.2 3.0 2.2 1.8 1.6 1.3 1.2 1.2
#11 by assets (in trn RUB)
Raiffeisenbank: 2Q 2019 results. Source: www.fitchratings.com, www.moodys.com, www.acra-ratings.ru, www.raexpert.ru
АО Raiffeisenbank at a glance
The highest rating composition among Russian banks
VR
(rating based on
standalone credit
profile)
IDR
(VR + support)
BCA
(baseline
credit rating)
LR debt rating in local
currency
(BCA + support)
SCA
(standalone credit
worthiness
assessment)
Issuer rating
(SCA +support or
systemic importance)
Rating
of credit
worthiness
bbb- BBB- Baa3 aaa AAA(RU) ruAAA
Sberbank
Raiffeisenbank
Unicreditbank
Sberbank
Raiffeisenbank
Unicreditbank
Rosbank
Sberbank
Raiffeisenbank
VTB
Sberbank
Raiffeisenbank
Sberbank
Raiffeisenbank
Rosbank
Unicreditbank
Rosbank
Raifffeisenbank
VTB
Unicreditbank
bb+ BB+ ba1 Ba1 aa+
Rosbank
Alfa-Bank
Gazprombank
Rosselhozbank
Alfa-Bank
Sberbank
Raiffeisenbank
Rosbank
Alfa-Bank
Gazprombank
Rosselhozbank
Unicreditbank
bb- ba2 aa AA(RU) ruAA+
Gazprombank Alfa-Bank Rosbank
Gazprombank
Rosselhozbank
Alfa-Bank
Gazprombank
b- ba3 a+ ruAA
Rosselhozbank Rosbank Alfa-bank Alfa-Bank
b1 aGazprombank
VTBGazprombank
b3 bb+
Rosselhozbank Rosselhozbank8
Raiffeisenbank: 2Q 2019 results based on public IFRS results
АО Raiffeisenbank at a glance
Strong business model with diversified product range to different customers’ segments
Packages of complex
services
Lending
Acquiring and Cash
collection
Banking cards
Deposits
Payroll projects
Conversion
operations, R-Dealer
Investments and securities
Investment banking
Hedging and
currency operations
Documentary operations
Currency control and liquidity
management products
Clients with revenue > 500 mn ₽ Products and services
Lending
Banking cards
Deposits and investments
Mortgage
Service package
Insurance
Current account& debit cards
Products/services
for private banking clients
Clients with revenue ≤ 500 mn ₽
Settlement
operations
Business cards
Lending
Acquiring and Cash
collection
Payroll projects
Corporate and investment banking Retail SME
Assets*
Gross income **
Net fee and commission result
464.9 BN ₽
9.7 BN ₽
3.7 BN ₽
Assets*
Gross income**
Net fee and commission result
283.7 BN ₽
19.0 BN ₽
5.4 BN ₽
Assets*
Gross income**
Net fee and commission result
24.0 BN ₽
5.3 BN ₽
2.9 BN ₽
* Assets after provisions
** Segment income (including FTP) before provisions and operating expenses 9
Deposits
Conversion
operations, R-Dealer
Currency control
Documentary
business
Operating environment
10
Operating in volatile environment
GDP growth in 2Q 2019: 0.8% y/y: key contribution came from
manufacturing
CBR key rate decreased to 7.50% in 2Q 2019. Inflation showed growth to
4.7% in 2Q 2019 from 4.3% in 2018. Real income of population also
continued to decrease and had negative impact on consumer demand
and retail trade.
Sanctions imposed against by EU and US against Russian state owned
banks did not changed
RUB was volatile throughout the quarter but in the end of period
appreciated against EUR and USD.
Source: CBR and Raiffeisenbank reports
Inflation and CBR key rate
5.40%
2018
2.50%
10.90%
2016
7.50%
3.40%
2017
7.80%
9M 2018
4.30%
7.75%
4.70%
7.50%
2Q 2019
CBR key rateInflation
GDP dynamics
1.52.0
0.8
20182016 2Q 2019
-0.2
2017
FX exchange rate fluctuations
63.8168.87
79.4672.99
60.66 57.6069.47
62.76
2016 2Q 20192017 2018
EUR/RUB
USD/RUB
Corporate loans growth rate
Operating environment
11
Raiffeisenbank: growth above sector in corporate loans
Raiffeisenbank: 2Q 2019 results based Raiffeisenbank RAS accounts and CBR reports
12.7%
1.1%
2016 2018
3.4%
2017 2Q 2019
21.7% 22.4% 21.6%
9.6% 9.1%
RaiffeisenbankSector
Retail portfolio for banking sector showed growth due to rise in
mortgage and unsecured loans. Raiffeisenbank growth was in line with
sector.
Raiffeisenbank growth in corporate portfolio reached 16.4 % against
2.9% by sector due to the Bank’s strategy to expand presence in Mid
market, corporate and SME business.
2016 2017
-9.5%
-16.4%
2018 2Q 2019
0.2%
9.8% 10.5%
23.1%
2.9%
16.4%
Sector Raiffeisenbank
18.8%
2017
1.1%
2Q 20192018
7.4%13.0%
35.1%
3.5%
Sector Raiffeisenbank
Corporate and retail customer accounts
growth rate
Retail loans growth rate
Strategy guidance
Target KPIs focus on three strategic stakeholders
12
CIRROE NPS Engagement
Happy shareholders Happy clients Happy employees
ICSS
Key priorities:
Retail
Remote sales & service model on whole Russia & key
communication channels
Scalable digital acquisition for major products
Developing customer relationship in branches, payroll & other
channels)
Best customer journeys in acquisition, daily banking, SME &
Premium
Partners co-brand
Corporate
Accelerated growth in Middle Market driven by new client acquisition
Customer retention and growth in niche Large Corporate and International segments
Balanced risk approach and strong focus on loan portfolio quality
Focus on optimization of credit process to reduce Time-to-Yes
Digital solutions across all product lines
CRM enhancement
Additional focus on NPS and customer satisfaction across sales force and product
teams
Raiffeisenbank: 2Q 2019 results based on public IFRS results 13
Assets evolution (bn RUB) Liabilities evolution (bn RUB)
Customer business growth and stable funding base
13
Credit portfolio continues to show growth dynamics both in corporate and
retail. Net loans increased by 10.8% in 2Q 2019 vs 2018;
Customer accounts increased by 1.5% compared with YE 2018. Retail
customer accounts showed a slight increase (0.3%) mainly due to growth in
retail term deposits by 8.2%. Corporate customer accounts increased by
2.9% driven by growth in term deposits (+2.4%) and current accounts
(+3.3%);
Share of liquid assets equals to 29.0% in 2Q 2019.
* Before provisions (gross loans)
548643
872 885
116117
146158
1.126
37
313245
33
2016
13
1.179
19
2017 2018
37
34
8433344
59
2Q 2019
754
4.7%
Other liabilitiesEquity
Subordinated debt
Wholesale funding
Customer accounts
2Q2019
88.2%
91.2%
2016 2017
79.0%
2018
86.0%
Financials
Loan* to deposit ratio
160 162160 165
226 211
474548
673 746
2016
754
63
5759
71
2017 2018
1.179
843
6760
2Q 2019
1.126
4.7%
Other assets Net loans SecuritiesCash and cash equivalents
Financials
14
Loan portfolio growth combined with high assets quality
Raiffeisenbank: 2Q 2019 results based on public IFRS results and management accounts
Loan portfolio showed growth by 10.5%, retail by 9.1%,
corporate portfolio showed growth by 11.3% (drivers: mid
business (+21.8%), SME business (+14.7%).
Credit portfolio quality is one of the best on the market, with
NPL 90+ dpd amounting to 1.7% from loan portfolio.
187 221 267 291
312346
422470
2016 2017 2018 2Q 2019
499567
689761
+10.5%
Corporate loans Retail loans
Gross loans (bn RUB) Retail loans (bn RUB)
71 96 118 130
89103
128139
18
2016
1711
2017
4 119
266
2018
121
2Q 2019
188
221
291
+9.1%
Unsecured loans Mortgage loans Credit cards and overdraftsCar loans
6.7%
2016 2017 2018 2Q 2019
3.6%4.2%
3.1%
1.6%
3.1%
1.7%
2.8%
90+pdp Stage 3+POCI
IAS 35 IFRS 9
NPL and impaired loans as % of loan portfolio
Financials
15
Low concentration levels, well diversified loan portfolio
Raiffeisenbank: 2Q 2019 results based on public IFRS results
Mining
Individuals
Transport storage and communication
Manufacturing
Trade
0.5%
Real estate
38.2%
Financial services
Health and social work
Hotels and restaurants
Electricity gas and water supply
Other
22.2%
15.5%
4.8%
6.5%
5.2%
1.4%
0.5%
2.4%
2.9% 2Q 2019 2018
Industry breakdown
2.7%
6.2%
2016
6.0%
2017
6.8%
2018 2Q 2019
1.5%
5.1%
9.4%
4.4%
Related party share in assets
Related party share in funding
Related parties exposure
FX share in assets
FX
27.6%
72.4%
45.5% FX54.5%
FX share in liabilities
Loan portfolio is well diversified by industries
Related party exposure in assets increased to 9.4% of total assets in 1HY 2019 due
to current FX liquidity placement policy. All these placements are short term with
maturity less than 3 months. On liabilities side related party share is presented by 3
sub loans.
FX share in liabilities is about 50.0%. The Bank hedges FX risk by swap
transactions
Financials
16
Stable customer funding
Raiffeisenbank: 2Q 2019 results based on public IFRS results
v
216.4 223.6
187.5 192.0
2018 2Q 2019
+2.4%
+3.3%
Current accounts Term deposits
Corporate customer accounts (in bn RUB)
353.6 345.8
113.2 122.4
2018 2Q 2019
+8.2%
-2.2%
Current accounts Term deposits
Retail customer accounts (in bn RUB)
Debt funding maturity profile (in bn RUB)
14.8 10.58.3
58.2
73.0
Demand
whithin 1 year
0.3
Over 5 yearsFrom 1 to 5years
Due to other banks Sub loans
Retail current accounts in 1HY 2019 decreased by 2.2% with increase
in term deposits by 8.2%
Corporate current accounts and deposits slightly increased by 3.3%
and 2.4% accordingly;
The Bank is mostly funded by customer accounts. Interbank funding is
short term. Funding from shareholders is represented by 3
subordinated loans
Financials
17
Strong capital adequacy ratios and prudent capital management
Raiffeisenbank: 2Q 2019 results based on public IFRS results and CBR regulatory reporting
9.94%
13.63%
10.63%
13.02%13.27%
1Q 20182017
12.96%
10.85%
10.17%
9.44% 9.56%
10.33%
13.03%
1H 2018
9.79%
10.55%
2018
11.52%
2Q 2019
N 1.1 N1.0N 1.2
CBR capital ratios
135.8 144.3 147.5 162.6 166.9
2017 2018
21.1%
24.6%
24.7%
1Q 2018
20.6%
26.6% 24.1%
1H 2018
24.2%
21.6%
23.4%
21.6%
2Q 2019Total capital Tier 1 CAR
Total CAR
IFRS capital ratios
4.500 4.500 4.500 4.500 4.500
1.875 2.000 2.125 2.250 2.500
1.0000.650
0.650 0.650
From April 19From Jan 19
0.650
From July 19 From Oct 19
8.000
From Jan 20
7.025 7.150 7.275 7.400
Buffer for systemically important banks
Capital conservation buffer
Min CET 1(N1.1)
Regulatory changes introduced Regulatory ratios are significantly higher than min required
N 1.0 is 12.96% (min 8) in 2Q 2019
Capital adequacy ratio based on Basel III is one of the highest on
the market in 2019
In end December 2018 CBR approved IRB–approach for
calculation of corporate RWA for Raiffeisenbank
Dividends were paid in total amount of 6.8 bn RUB in March 2019.
Bank is well prepared for regulatory changes, ratios are higher
than required taking into consideration higher buffers since 2019
Financials
18
Historically high profitability
Raiffeisenbank: 2Q 2019 results based on public IFRS results
Operating profit (before provisions and operating expenses) showed
growth by 13.7% to 42.2 bn RUB driven by growth in Net interest
income by 9.4% and Net fee and commission income by 10.6%
(drivers: increased commissions on settlement transactions,
documentary business and guarantees, insurance commission and
commissions on credit lines);
Provisions created in 1HY 2019 in total amount of 1.1 bn RUB against
release in amount of 1.2 bn RUB in 1Q 2018. Cost of risk is low at 0.3%
in 1HY 2019;
Historically high profit after tax reached 19.1 bn RUB in 1HY 2019
8.4
16.4 17.8
45.152.6
2017
6.40.9 1.0
2018
68.8
79.8
+16.0%
Net interest income F&C and commision income Trading result Other income
1.0 0.78.1 8.9
24.827.2
42.2
3.3
1H 2018
5.4
1H 2019
37.2
+13.7%
0.65%
0.50%
Cost of risk
24.8-3.5 -3.1
2017 2018
-1.1
1H 2019
0.1
1H 2018
Provisions for loan impairement
0.04%
-0.30%
Profit after tax (in bn RUB) and ROE
25.1% 25.7%
ROE
29.1 33.7
2017 2018
Net profit
28.2%25.1%
17.4 19.1
1H 2018 1H 2019
Provisions (in bn RUB) and Cost of riskOperating profit (in bn RUB)
Financials
High operating efficiency
19Raiffeisenbank: 2Q 2019 results based on public IFRS results
11.1 10.8
14.417.6
2.51.71.3
2017
1.8
2018
28.5
32.7
+14.7%
Staff costs Deposit insurance expenses Other expensesIT investments
Cost to income ratioOperating expenses (in bn RUB)
4.8 5.2
8.4 9.3
0.61.2 1.60.8
1H 2018 1H 2019
15.216.7
+10.2%
2017
41.0%41.4%
2018 1H 2018 1H 2019
40.8% 39.5%
Operating expenses grew by 10.2% in 1HY 2019 caused by growth of deposit insurance expenses, office maintenance fees and staff cost;
Deposit insurance expenses also showed growth by 33.2% due to growth in average deposits volumes and inclusion of SME business deposits in
Deposit insurance system;
Cost to income ratio decreased by 1.2 ppt due to rise in operating profit. If we exclude DIC from operating expenses CIR will be 37.1%.
raiffeisen.ru
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20
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