21
Raiffeisenbank 9 months 2019 results
Raiffeisenbank
9 months 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: 9M 2019 results 2
Disclaimer
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(RU)
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) 9M 2019 2018 Change
Total assets 1 168.8 1 126.0 +3.8%
Liquid assets 300.3 365.2 -17.8%
Gross Loans 784.2 689.4 +13.8%
Retail 299.4 266.8 +12.2%
Middle* 76.9 57.4 +34.0%
SME 26.5 22.0 +20.4%
Large corporate 381.4 343.3 +11.1%
Customer accounts 858.1 872.4 -1.6%
Retail 463.2 466.7 -0.8%
Large corporate 273.0 289.0 -5.6%
Middle 51.6 50.2 +2.9%
SME 68.7 64.7 +6.3%
Income statement (RUB bn) 9M 2019 9M 2018
Operating income 65.5 58.1 +12.8%
Profit after tax 28.6 27.4 +4.5%
Key ratios 9M 2019 9M 2018
ROE 24.4% 28.6% -4.2 ppt
CIR 39.1% 39.4% -0.3 ppt
CoR 0.4% 0.06% +0.34 ppt
NIM 5.3% 5.9% -0.7 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 glance
Branch network, digital reach and client base
175 outlets and 5 branches
01.10.2019 (plans for 1Q
2020 – 130 outlets)
> 98 cities with remote SME digital
service o/w 42 in Moscow region in 3Q
2019
2 087 RBRU ATMs and
22 567 ATMs partners’ network
5
>2 mn of active clients
AO Raiffeisenbank at a glance
Successful story of digital development
6
Digital Cities
30% less branch traffic in the network y-
o-y at 08/2019
Rebalancing sales and service model,
maintaining highly efficient branch
network
Branch Strategy 2020
Branches
- 25%
High-tech remote service model and technological development
of the contact center and branches
Investments in digital services have almost doubled in 2019 and
will continue to grow in 2020
Digital service model operating in
over 100 cities without branches
Remote delivery team
managing logistics
77%70%
32
4 Investment in innovation is paying off
20202019
50%
Shares of products opened online in 2019 vs. 2017
Deposits Saving
Acc.Loans
77%
of clients actively
use mobile app
Increase in mobile operations 2019 vs. 2017:
Internal transfers x 8.0
C2C transfers x 4.0
C2C between client cards x 1.4
Payment services x 2.0
+24 PP +32 PP +42 PP
1 Customers are actively going into digital channels
Raiffeisenbank: 9M 2019 results based on RBI public results
АО Raiffeisenbank at a glance
Strong contribution to the Group’s profitability
SoutheasternEurope
A*: EUR 26.5 bn
P: EUR 366 mn
SА: 17.6%
NPL: 3.8%
NIM: 3.63%
CentralEurope
А: EUR 41.6 bn
P: EUR 384 mn
SА: 27.6%
NPL: 2.6%
NIM: 2.2%
Group Corporates &Markets**
А: EUR 56.0 bn
P: EUR 303 mn
SА: 37.1%
NPL: 1.9%
NIM: 1.27%
Reconciliation
A: EUR - 26.2 bn
P: EUR - 816 mn
Eastern Europe(incl. Russia)
А: EUR 21.6 bn
P: EUR 707 mn
SA: 14.3%
NPL: 2.6%
NIM: 5.79%
Russia
А: EUR 16.5 bn
P: EUR 490 mn
NPL: 1.9%
NIM: 5.0%
Corporate Center***
А: EUR 31.0 bn
P: EUR 354 mn
SА: 22.5%
€ 150.8 BN totalassets€ 1 299 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 7
56.5% 55.2%
38.7%
Lowest cost to income ratio among CEE segments Highest ROE before tax among CEE segments
21.3%
15.4%
34.1%Central Europe Southeastern Europe Russia
Raiffeisenbank: 9M 2019 results, Interfax ranking
АО Raiffeisenbank at a glance
Top 7 bank in Russia by net profit and #10 by assets
Foreign owned: 6.8%,
0/w Raiffeisen: 1.4%
Market share
State owned: 68.7%
Privately owned: 24.5%
8
665.4
134.0 54.7 48.3 38.0 32.5 30.4 23.0 22.2 16.7
#7 by net profit (in bn RUB)2 781.4
979.1 684.3
334.4 179.4 142.3 138.8 126.4 119.1 85.3
#4 by retail current accounts (in bn RUB)
Market share
State owned: 67.8%
Privately owned: 21.8%
6996.1
2930.2
601.9 555.1 447.9 398.8 352.3 334.8 301.9 279.8
#9 by retail loans (in bn RUB)
Market share
State owned: 71.1%
Privately owned: 213%Foreign owned: 7.6%
0/w Raiffeisen: 1.8%
Foreign owned: 10.4%
0/w Raiffeisen: 5.2%
28.3
14.2
6.2 3.3 3.1 2.2 2.1 1.4 1.2 1.2
#10 by assets (in trn RUB)
AO Raiffeisenbank at a glanceThe highest ROE among peers with high operating efficiency
* CIR is calculated as operating expenses (incl deposit insurance expenses)/ operating profit before provisions and OPEX
** CIR is calculated as operating expenses (excl deposit insurance expenses)/ operating profit before provisions and OPEX and including DIC
*** Unicreditbank doesn’t disclose DIC as separate item in IFRS financial statements
.
NIM CoR ROE CIR * CIR **
Raiffeisenbank 5.1% 0.3% 25.1% 39.5% 37.1%
Rosbank 4.4% 0.9% 7.5% 62.6% 61.4%
Sberbank 5.2% 0.3% 24.1% 37.0% 34.1%
Unicreditbank*** 3.2% 1.4% 8.0% 38.1% -
Tinkoff 22.4% 8.0% 64.3% 43.4% 42.5%
Raiffeisenbank 5.9% 0.04% 28.2% 40.7% 38.7%
Rosbank 4.4% 0.5% 8.2% 67.1% 66.2%
Sberbank 5.5% 0.3% 24.6% 36.0% 33.4%
Unicreditbank 3.8% 2.1% 9.2% 34.7% -
Tinkoff 24.7% 7.0% 69.3% 45.9% 44.2%
1H 2019
1H 2018
Raiffeisenbank: 9M 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
Rosbank
Sberbank
Raiffeisenbank
VTB
Rosbank
Sberbank
Raiffeisenbank
Sberbank
Raiffeisenbank
Rosbank
Unicreditbank
Rosbank
Raifffeisenbank
VTB
Unicreditbank
bb+ BBB- ba1 Ba1 aa+ AA (RU) ruAA+
Rosbank
Alfa-Bank
Unicreditbank
Gazprombank
Rosselhozbank
Sberbank
Raiffeisenbank
Alfa-Bank
Gazprombank
Rosselhozbank
Unicreditbank
Rosbank
Gazprombank
Rosselhozbank
Alfa-bank
Gazprombank
bb- BB+ ba2 a+ AA(RU) ruAA
Gazprombank Alfa-BankAlfa-Bank
RosbankAlfa-bank Alfa-bank
b- b1 a
RosselhozbankGazprombank
VTB Gazprombank
b3 bb+
Rosselhozbank Rosselhozbank
10
Raiffeisenbank: 9M 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
478.1 BN ₽
15.1 BN ₽
5.7 BN ₽
Assets*
Gross income**
Net fee and commission result
293.1 BN ₽
29.4 BN ₽
8.9 BN ₽
Assets*
Gross income**
Net fee and commission result
25.1 BN ₽
8.5 BN ₽
4.8 BN ₽
* Assets after provisions
** Segment income (including FTP) before provisions and operating expenses 11
Deposits
Conversion
operations, R-Dealer
Currency control
Documentary
business
Operating environment
12
Operating in volatile environment
GDP growth within 9M 2019: 1.2% y/y due to contribution from
manufacturing, agriculture, wholesale and retail trade.
CBR key rate decreased to 7.0%. Inflation decreased vs Y2018 (from
4.3% to 4.0%) as s result of ruble appreciation and seasonal increase in
food supply. Real income of population was slightly increased but still had
negative impact on consumer demand.
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: 9M 2019 results based on CBR and Raiffeisenbank reports.
Inflation and CBR key rate
9M 2019
7.50%
3.40%
2.50%
2017
5.40%
2016 9M 2018
10.90%
7.80%
4.30%
7.75%
2018
4.00%
7.00%
Inflation CBR key rate
GDP dynamics
1.52.0
1.2
-0.2
2016 2017 2018 9M 2019
FX exchange rate fluctuations
63.8168.87
79.4670.32
60.66 57.6069.47
64.42
2016 20182017 9M 2019
EUR/RUB
USD/RUB
Strategy guidance
Target KPIs focus on four strategic stakeholders
13
CIRROE
NPS
Engagement
Happy shareholders
Happy clients
Happy employeesICSS
Key priorities:
Retail
Remote sales & service model scaling
CX perfection in digital processes
Developing customer relationship in branches, payroll & other
channels
Active customers acquisition on daily banking products
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 E2E processes optimization and automatization
Digital solutions across all product lines
CRM enhancement
Additional focus on NPS and customer satisfaction across sales force and product
teams
Community
Raiffeisenbank: 9M 2019 results based on public IFRS results 14
Assets evolution (bn RUB) Liabilities evolution (bn RUB)
Customer business growth and stable funding base
14
Credit portfolio continues to show growth dynamics both in corporate and retail. Net
loans increased by 14.3% for 9M 2019 vs 2018;
Cash and cash equivalents declined mostly due to decreasing REPO transactions.
But liquid assets continued to be about 26% of total assets.
Customer accounts decreased by 1.6% due to decrease in euro-denominated retail
accounts and revaluation of FX accounts.
* Before provisions (gross loans)
548 643872 858
4533116
117
146 167
13
32
19
2016
31
1.168
41
2017
3737
34
2018
34
68
9M 2019
754843
1.126
3.8%
Equity Wholesale funding
Customer accountsSubordinated debt
Other liabilities
79.0%91.2%
2016
88.2%
2017 2018 9M 2019
91.4%
Financials
Loan* to deposit ratio
160 143160 165
226 194
474 548
673 770
2017
57
754
67
63 71
2016 2018
59
61
1.168
9M 2019
843
1.126
3.8%
Other assets Net loans Cash and cash equivalents Securities
Financials
15
Loan portfolio growth combined with high assets quality
Raiffeisenbank: 9M 2019 results based on public IFRS results and management accounts
Loan portfolio showed growth by 13.8%, retail by 12.2%, corporate
portfolio showed growth by 14.7% (main drivers: mid business
(+34.0%), SME business (+20.4%));
Credit portfolio quality is one of the best on the market, with NPL
90+ dpd amounting to 1.4% from loan portfolio.
187 221 267 299
312346
422485
2016 9M 20192017 2018
567499
689
784
+13.8%
Corporate loans Retail loans
Gross loans (bn RUB) Retail loans (bn RUB)
71 96 118 134
89103
128143
1811
17
2016
1
2018
4
2017
19022
9M 2019
188
221
266
299
+12.2%
Unsecured loans Credit cards and overdraftsCar loansMortgage loans
2016
3.6%
2017
4.2%
3.1%
2018 9M 2019
6.7%
1.6%
3.1%
1.4%
2.5%
Stage 3+POCI90+pdp
IAS 35 IFRS 9
NPL and impaired loans as % of loan portfolio
Financials
16
Low concentration levels, well diversified loan portfolio
Raiffeisenbank: 9M 2019 results based on public IFRS results
Individuals
Transport storage and communication
Trade
6.2%
Manufacturing
Agriculture, hunting and forestry
Mining
Real estate
38.2%
Financial services
14.0%
Health and social work
Hotels and restaurants
Electricity gas and water supply
6.9%
Other
21.9%
5.3%
2.0%
1.3%
0.5%
0.5%
2.2%
1.1%
9M 2019 2018
Industry breakdown
2016 2017 2018
1.5%
6.0%
9M 2019
2.7%
6.2%6.8%
5.1%
8.1%
4.7%
Related party share in assets
Related party share in funding
Related parties exposure
FX share in assets
26.3%
FX
73.7%
41.8%FX
58.2%
FX share in liabilities
Loan portfolio is well diversified by industries;
Related party exposure in assets is 8.1% of total assets mostly
represented by overnight placements and derivatives;
On liabilities side related party share is presented by 3 sub loans;
FX share in liabilities decreased to 41.8% (- 6.9% vs Y 2018). The
Bank hedges FX risk by derivative transactions
Financials
17
Stable customer funding
Raiffeisenbank: 9M 2019 results based on public IFRS results
v
216.4236.5
187.5
156.8
2018 9M 2019
-16.4%
+9.3%
Current accounts Term deposits
Corporate customer accounts (in bn RUB)
353.6 337.9
113.2 125.3
2018 9M 2019
+10.7%
-4.4%
Current accounts Term deposits
Retail customer accounts (in bn RUB)
Debt funding maturity profile (in bn RUB)
10.723.5
67.4
Over 5 years
0.0
Demand
whithin 1 year
0.2
From 1 to 5years
0.0
67.4
23.5
Due to other banks Sub loans
Corporate current accounts increased by 9.3% with term deposits
decreasing by 16.4% (due to scheduled maturity). Excl FX effect
corporate accounts stay stable y/y
Retail term deposits increased by 10.7% with slight reducing customer
accounts by 4.4% (+1.6% excl FX effect); Excluding FX effect there is
rise in total retail customer accounts by 4.5% with outflow from euro-
denominated accounts.
The Bank is mostly funded by customer accounts. Interbank funding is
short term. Funding from shareholders is represented by 3
subordinated loans.
Financials
18
Strong capital adequacy ratios and prudent capital management
Raiffeisenbank: 9M 2019 results based on public IFRS results and CBR regulatory reporting
13.63%13.27%
9.94%
10.17%
2017
10.63%
9.44%
1Q 2018
9.56%10.48%
10.33%
13.02%
1H 2018
9.79%
10.55%
13.03%
2018
11.14%
13.98%
9M 2019
N 1.1 N1.0N 1.2
CBR capital ratios
135.8 144.3 147.5 162.6 189.7
1H 2018
24.6%
24.7% 20.6%
2017
24.1%
1Q 2018
26.6%
21.1%
24.2%
21.6%
2018
26.1%
22.6%
9M 2019
Total capital Total CAR Tier 1 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
From Oct 19From April 19
0.650
From Jan 19
0.650
From July 19
0.650
From Jan 20
7.025 7.150 7.275 7.4008.000
Min CET 1(N1.1)Buffer for systemically important banks Capital conservation buffer
Regulatory changes introduced
Regulatory ratios are significantly higher than min required
N 1.0 is 13.98% (min 8) for 9M 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
Bank is well prepared for regulatory changes, ratios are higher
than required taking into consideration higher buffers since 2019
Raiffeisenbank: 9M 2019 results based on public IFRS results and CBR regulatory reporting
Financials
19
Historically high profitability
Operating profit (before provisions and operating expenses) showed
growth by 12.8% to 65.5 bn RUB driven by growth in Net interest income
by 8.9% and Net fee and commission income by 16.9% (drivers:
commissions on settlement transactions, documentary business and
guarantees, fiduciary activities, credit facility fee);
Provisions created for 9M 2019 in amount of 2.4 bn RUB vs amount of
0.3 bn RUB created for 9M 2018. Cost of risk is - 0.4%;
Profit after tax reached 28.6 bn RUB for 9M 2019.
8.4
16.4 17.8
45.152.6
1.06.40.9
20182017
68.8
79.8
+16.0%
Other incomeF&C and commision incomeNet interest income Trading result
7.812.6 14.7
38.542.0
9M 2019
5.61.3
9M 2018
1.0
58.165.5
+12.8%
0.65%
0.50%
Cost of risk
38.5 -3.5
2017
-3.1
2018
-2.4-0.3
9M 2018 9M 2019
Provisions for loan impairement
0.06%
0.40%
Profit after tax (in bn RUB) and ROE
25.7%25.1%
ROE
29.1 33.7
20182017Net profit
28.6%24.4%
27.4 28.6
9M 2018 9M 2019
Provisions (in bn RUB) and Cost of riskOperating profit (in bn RUB)
Raiffeisenbank: 9M 2019 results based on public IFRS results and CBR regulatory reporting
Financials
High operating efficiency
20
11.1 10.8
14.417.6
1.71.81.3
2017 2018
2.5
28.5
32.7
+14.7%
Staff costs Deposit insurance expenses Other expensesIT investments
Cost to income ratioOperating expenses (in bn RUB)
7.3 8.0
12.514.1
1.91.2
9M 2018
2.51.0
9M 2019
22.925.6
+12.0%
2018
41.4%
2017
41.0%
9M 2018 9M 2019
39.4% 39.1%
Operating expenses grew by 12% within 9M 2019 and mostly caused by growth of maintenance expenses of premises and equipment,
deposit insurance expenses, staff cost;
Deposit insurance expenses also showed growth by 30.6% due to growth in average deposits volumes and inclusion of SME business
deposits in Deposit insurance system. If we exclude operating expenses from CIR calculation it will be about 36.7%.
Raiffeisenbank: 9M 2019 results based on public IFRS results and CBR regulatory reporting
