Report
Niklas Kammer
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Morningstar | New Raiffeisen Company Report

We think the management team of Raiffeisen Bank has made a timely decision on adjusting its position in its home markets. The Czech Republic, Romania, and Slovakia are the markets where the bank is currently looking to grow, while in Russia and Ukraine, the bank has been shrinking its operations because of country-related macroeconomic and economic concerns. In Russia, it has maintained its strategic focus on high-quality customer service and reduction of RWAs to expand its loan portfolio in a very balanced way, which, in our view, will support asset quality and efficiency groupwide. Thanks to the transformation program implemented to strengthen its capital base (lower loan loss and lower RWA), we believe the bank now has a reasonable capital level. As it stands, the firm’s common equity Tier 1 ratio is now 190 basis points above the regulatory required level of 11.5%, sufficient to support balance sheet growth and dividend payments. Lastly, the merger between Raiffeisen Bank and its majority owner Raiffeisen Zentralbank, which took place in March 2017, was mainly driven by Zentralbank’s weak capital position. In our view, the merger was long expected and is beneficial for the bank in terms of creating more transparency on the operational level and eliminating the complex group structure. The combined institution operates under the name Raiffeisen Bank International.
Underlying
Raiffeisen Bank International

Raiffeisen Bank International is a universal bank focusing on corporate and retail customers in Central and Eastern Europe (CEE) and on corporate customers in Austria. In CEE, Co. consists of a network of banks, leasing companies and financial service providers. In Austria, Co. is involved in corporate finance and export and trade finance banks. Co. provides services to customers in 2,800 branch offices. In the retail banking business, Co.'s product and service portfolio comprises inter alia credit services (mortgages, credit cards and personal loans), as well as payment transaction and current account package services. As of Dec 31 2014, Co.'s total assets amounted to Euro121.6 million

Provider
Morningstar
Morningstar

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Niklas Kammer

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