Raiffeisen Bk Intl Ag Ord

Good afternoon, ladies and gentlemen. Sorry for the delay. Thank you for taking the time out of your day to join us for our Q1 update. We can report consolidated profit of Euro 260 million in the quarter in the core of the group, excluding Russia, for a return on equity of 7.3%. As is the case every year, we have booked a large portion, but not all, of expected governmental measures and other contributions in the first quarter. Now I see the one ratio also excluding Russia comes in at 15.9% with the implementation of the CRR3, some relief on operational risk and very modest loan growth. I will cover all of these in just a minute. Looking at the main revenues, net interest income was stable in the quarter whereas fees were modestly weaker As we usually see it in the first quarter, compared to quarter one of last year, fees are up 8%. The cost-income ratio has increased compared to Q1 last year in part due to pressure on OPEX, but also due to some effects on the revenue side. Income from associates was lower, although this effect is offset by release of impairments in other results, and therefore neutral in the bottom line. and therefore neutral trading income was lowered due to tightening of our own credit spreads in the first quarter. But this has already partially reversed in April. Nevertheless, we remain committed to cost discipline, especially in head office, and we have kept our cost income ratio target unchanged for 2025. Let's now move to our Russia de-risking slide on page six. In the first quarter, we have shrunk the loan book by a further 4%. We remain ahead of the schedule agreed with ECB and generally fully compliant with the requirements. The different measures taken to reduce deposits are starting to show now results and we can report a 9% drop in the quarter. I would like to draw your attention to the 23% ruble appreciation versus the The Q1, so in the Q1 versus last year, and this means that our reported balance sheet figures have increased. What is important, of course, is that our business reduction and de-risking continues regardless of any political geopolitical developments. In parallel, To this, we continue to work on a sale or partial sale of our Russian business. It remains to be seen if recent geopolitical developments might facilitate an exit from Russia. Finally, let me address the Rasperia court case. Two weeks ago, our appeal was rejected. The appeals court confirmed the initial verdict, including that damages could be enforced against our Russian subsidiary. Russian colleagues have filed an appeal with the next instance. In the meantime, the verdict was partially enforced last week, and the CPR has withdrawn the ruble equivalent of 1.9 billion Euro from our subsidiary's account and transferred this to Rasperia. The amount covers the damages, while the remainder Around 170 million, which covers the accrued interest, may be withdrawn at any time. Once the interest part of the verdict has also been enforced, we expect the ban on the transfer of the shares to be lifted. We are also finalizing our claim in Austria and will take legal actions against Raspere in the near future. Please understand there is little more that I can say about the next steps. Both from an accounting financial perspective or in terms of legal strategy. Let's now move to the following slides, starting with the core revenues, which is slide seven. Net interest income is again very stable despite the rate cuts in recent quarters and slow loan growth. We have benefited to some extent from hedges as well as on the liability side from high deposit volumes, especially in retail. Fees are down versus Q4 2024, but as you know well by now, this is largely seasonal. For both NINV income, our guidance for 2025 is unchanged. On slide 8, where loan growth was muted, demand in particular has been very sluggish, whereas retail demand is still resilient. On the liability side, I just mentioned retail deposit inflows, which continued in Q1. As mentioned a minute ago, deposits in Russia decreased not a splint of quarters. On the next slide, liquidity ratios remain very prudent. In head office specifically, we continue to run a very conservative asset and liability matching. I'm referring to the second bullet. And as you might recall, our ability to maintain very high liquidity even in extreme scenarios. The slight drop in LCR is explained by a shift of liquidity from reverse repos to ECB deposits and to some extent net interest income optimization. There are some costly surplus deposits which we were able to eliminate which lowered LCR but do not affect our prudent liquidity profile. On slide 10, capital ratios for the group including Russia Improves to almost 19%. The two main drivers are the implementation of CRR3, which Hannes will address, and the 23% ruble appreciation in the quarter. More important to you, however, is the price book zero scenario, where we show the CET1 ratio for the group excluding Russian, assuming that the Russian business has been deconsolidated with a full loss to the equity. This worst case CT1 scenario now stands at 15.9%, with again CRR3 as a main driver, together with slow long growth. I would simply flag that for the rest of the year, the Russian operational risk component was capped at 2.8 billion, which equals 61 basis points. Guidance for this scenario. Pricebook Zero C to 1 ratio is unchanged at 15.2%. Please understand that we are early in the year and have not changed profitability or loan growth. I will skip our capital requirements on slide 13 with nothing noteworthy to report and move to MREL on slide 14. For Resolution Group Austria, our buffer remains very comfortable, and all of our other resolution groups remain above the requirements. We issued a senior preferred note in February, and we still aim to issue a senior non-preferred this year. You probably are aware that we announced the call of one of our outstanding 81 notes, the 8.67 coupon notes. Together with the decision not to call the 4.5 Cuban notes. Here I can simply say that we remain committed to refinancing these instruments at the first possible window, subject to the usual conditions, not least of which include a stable market window. Let's now move to our macro outlook on slide 15. Despite the divisions, which you can see marked with red arrows, Thank you very much. Thank you. Perhaps here I would only flag that over the past six months we have cut our Euro rate estimates while increasing our estimates in key CE markets. Let us now turn to my last slide with our guidance for 2025, which is unchanged. There have been some moving parts since this was published, including headwinds which add some downside risk. These include the bank tax in Austria, a slow start to the year for loan growth. At the same time, we still have three quarters and we will adjust the guidance later if necessary. With that, I now hand over to Hannes. Thank you.

Thank you, Johann. Good afternoon, ladies and gentlemen. Thank you for joining us today. Well, it has been a busy start to the year for risk managers everywhere. and I'm happy to report that we have made good progress in Q1. We have further increased our overlays and have started an internal stress test on dairy sensitivities. We have brought our MP ratio back below 2% and cleared up some of exposures in the head office. Given the volatility in currencies and rates, we have conducted reviews of our market risk exposure. On the regulatory side, we have now implemented CRR3, and I'm making good progress on the 2025 ECB stress test. On operational risk specifically, we have obtained relief on the Russian component in the price book zero scenario. Allow me to run you through these one by one, but first let me simply state that I'm satisfied that we are well prepared for interesting times ahead. Credit risk in Q1 was very benign. We saw virtually no defaults and accordingly, Almost no state free risk costs. Clearly, the outlook remains uncertain and we have used Q1 to book additional overlays. The macroeconomic and geopolitical uncertainty also leads us to leaving the risk cost guidance at the moment unchanged up to 50 basis points. Since the reciprocal tariffs were announced early April, we have launched an internal stress test on tariffs. On my next slide, I will share with you our initial thoughts and findings. For now, it appears that the impact is fairly limited. But as we go through individual exposures, we may decide to recognize some further overlays in Q2. Our stock of overlays now stands at 451 million euros, available to us in Russia. Also on the subject of credit risk, we make good progress on some of our non-performing exposures in head office. The MPE ratio for the group excluding Russia is now back below 2%. As some of the write-offs came from well-provisioned exposure, the coverage ratio decreased in the first quarter. We remain satisfied with our provisioning levels, not least because of our substantial stock of overlays. Away from credit risk, we have seen big moves in currency and rates, especially in the US dollar. We have been busy reviewing our exposure here and anticipating what these moves could mean to our balance sheets, our clients, and to our business model. For now, we are comfortable with our positioning and exposure and have not required any meaningful adjustments. Nevertheless, we continue to monitor these developments very closely. With the beginning of the year, we have implemented CRR3, and this has provided around €6 billion of relief to credit risk RWA's, excluding Russia, partially offset by a €2.1 billion increase in operational risk-weighted assets. The day one impact is therefore around minus €3.9 billion, whereas the transitional benefits are worth around €1.2 billion. This means, after some countermeasures, the fully loaded impact of CR3 On credit risk and operational risk would be a net relief of an estimated 2.7 billion euros in 2032. We have excluded market risk for now as the fundamental review of the trading book was postponed. Let's now move on to the next slide where we can share with you our first thoughts on the potential impact on the U.S. reciprocal tariffs announced and suspended in early April. First of all, we have assumed A blanket 25 rate on all exports from the EU to the United States. Secondly, we looked at the sensitivity of export volumes to the US, including elasticity and possible substitution effects. We have done this on both on industry and on a country level. This allows us to capture cases where for a given industry's exposure may be more sensitive to a country versus another. And finally, we have quantified this estimated drop in volumes Thank you very much. We are reviewing our exposures going line by line. So far, we have reviewed over 10 billion years, and this has led to a very few rating downgrades. Nevertheless, we are designing and conducting an internal stress test specifically on theories and trade disruptions. Depending on the outcome, this may be a driver for further overlay bookings in Q2. Dear all, having said all this, we are now happy to take your questions.

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