Raiffeisen Bk Intl Ag Ord

Good afternoon, ladies and gentlemen, and welcome to the preliminary results 2024 conference call of Reifeisen Bank International. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Johann Strobl, Chief Executive Officer. Please go ahead, sir.

Thank you. Good afternoon, ladies and gentlemen. Welcome to our full year 2024 results call. I hope that you have had a good start to the year and I thank you for joining us today. Let me begin with a few overview slides before we dig into the quarterly trends. We start with slide 4 where we can report group consolidated profits of 1 billion 157 million and a 9.4% return on equity excluding the OCI recycling in Belarus. This is, of course, a substantial drop in consolidated profit year on year and it includes two major effects in the fourth quarter. The first is the provision in Russia related to the recent court decision what we have from the Rasperia case. The second effect is the sale of Belarus with a PLN impact of minus 824 million. I will discuss both of these in just a moment. Focusing on the core group, which excludes Russia and Belarus, we can report consolidated profits of 975 million, broadly stable year on year. Like last year, this core profitability is significantly impacted by further litigation provisions in Poland. On the bright side, we see the one of the group excluding Russia comes at 15%, slightly above our guidance. Moving to slide 5. and focusing on the core of the group, loans to customers increased 3% in 2024. Net interest income was roughly flat at €4,155,000,000 and fee income improved 5% to €1,804,000,000. OPEX finished in line with our guidance of around €3.3 billion for a cost-income ratio of 52.5%. On slide 6, and spending an extra minute on the core of the group, we would like to take a step back and look at how the core of the group has performed since the start of the war, while also comparing this with the full group including Russia and Belarus in the year prior to the full-scale invasion. Starting with the operating income and operating result, What immediately jumps out is that since 2022, the core of the group has achieved higher revenues and higher operating results than in any of the previous years, including the profitable Russian and Belarus businesses. I realize that over the past three years, we have had more headlines and negative surprises than anyone could have expected. But I also believe it is important to highlight here that behind all the noise, The core and future of the group has performed very well. In essence, the strong performance of the core of the group has already compensated for the loss of the previous contributions of the Russian and Belarusian businesses. Which brings me to the return on equity. Again, here we exclude the contributions from Russia and Belarus. And we have also added back the litigation provisions and legal costs in Poland. These have been a significant track on core group profitability in recent years, and we believe that the worst of it is behind us. The idea here is to highlight what the future business of RBI is capable of achieving once we have resolved these legacy issues. With an adjusted return on equity between 13 and 15% for the core of the group, I believe that we have a solid foundation to build on. I will come back to this in a few minutes when we discuss the outlook. Now to my next slide, where first of all we can share with you our Euro 1.1 per share dividend proposal to the upcoming shareholder meeting. While I realize it is slightly lower than last year, I am glad that we can continue to allow our shareholders to benefit directly from the good performance of the core group. We have also made an important step forward in the de-risking of our Eastern European footprint with the closing of the sale of our bank in Belarus. The final deconsolidation effect is negative 824 million, of which only Euro 311 is impacting equity, the rest being recycling of mostly historic FX losses, which had already gone through capital in a quarterly basis. For the sake of precision, The net quarter four from Belarus is negative 800 million, reflecting the two months of profits in Belarus for the quarter prior to deconsolidation. The impact on the CD1 of the group excluding Russia is four basis points plus when you consider the 2.3 billion RWA deconsolidation. On the one hand, we're certified to have closed this first transaction. and achieving a decent cash price for a difficult-to-sell asset. On the other hand, it is never pleasant to sell one of our long-standing businesses. Rare Bank was part of the group since 2003 and consistently performed very well in a challenging environment.

Now let's turn to our court case.