Raiffeisen Bk In Unsp/Adr

Good day and thank you for standing by. Welcome to the Raiffeisen Bank International Q3 2026 results. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 and 1 again. Please be advised, today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Hollerer. Please go ahead.

Good afternoon, ladies and gentlemen, and welcome to our Q3 results presentation. Before we jump into the numbers and recent business developments, I would like to update you on our strategy review. In the past three months, we have defined the strategic pillars and assembled a portfolio of initiatives, which will transform the bank and reset our financial ambition. We are now planning and preparing each of these initiatives for implementation. In corporate and investment banking, we intend to become the leading house bank in our region. This means better cross-selling and, in particular, Focus on more efficient use of RWAs. We will prioritize growth in the more profitable segments and be very disciplined with our hurdle rates. In retail, our digital offering has made remarkable progress in recent years, and we will continue to build on this. We will deepen customer relationships and improve engagement and monetization. I see enormous potential in both. SME and Love Management, and I expect these to contribute significantly to our growth engine. Across all our business lines, we are focused on the quality of our growth. I believe that the strategy and initiatives which are being finalized will do just that. Improving our profitability is one of our highest priorities. It is very important that our financial ambitions Thank you very much. We will have capital to deploy and we are ready to absorb faster growth. But let me be clear. I expect our financial ambitions to be achieved through our own self-help. Growth and market momentum will come on top. On the 10th of February next year, we will present to you our updated strategy and financial targets for 2030 on the occasion of our Capital Markets Day. This will be held in Vienna and we look forward to welcoming you here. Let me now briefly update you on the two acquisitions which we have been working towards. First of which is Garanti in Romania. I'm happy to announce, and we still did this today, that the transaction was successfully completed. We expect to become third largest bank in Romania. We will now work on the integration of the new businesses and we aim to merge it into Raiffeisen Bank Romania in the second half of next year. Whereas 2027 will be impacted by some restructuring and integration costs, from 2028 onwards we expect to see substantial contributions in Romania from this transaction. The acquisition of ADIKO is also moving ahead. First of all, we have now reached the end of the additional tender period and we have reached participation of nearly 95%. And this may still increase in the coming days as more tender instructions are received. We are finalizing the regulatory approval process and the dialogue with the respective authorities has been very constructive. We continue to assume that this transaction will complete still this year. Once we have received all the required approvals. At the same time, we now deem the carve-out to be unlikely, and this does not change our appetite for these transactions. If the carve-out does not go ahead, we will look forward to including all of Attico's subsidiaries in RBI Group. This means in Serbia, the inclusion of ADECO Serbia consolidates our top three market position and reconfirms our commitment to the market. In Bosnia, we already have a market leading franchise and we welcome the addition of ADECO's two subsidiaries there. And moreover, we will also now enter Montenegro. Financially, this will improve both our CT1 ratio and ROE. In both cases, we can now assume that all subsidiaries remain part of the group, and we can recognize the full benefit of the badwill. The full acquisition of Attico has an impact of around 30 basis points on our CT1 ratio, excluding Russia, down from an expected minus 50 basis points when we still assumed the carve-out would succeed. The one-time gain from the badwill on all of Artico will also go through P&L and have a one-time positive effect of around 310 basis points on our ROE this year. Moving to my next slide, our rundown in Russia continues to progress nicely. Loans to customers are down to 2.2 billion euros and in particular corporate loans which are down to less than 700 million euros. Our commitment to running down the bank is unchanged and you should expect to see steady progress here in coming quarters. Equally important, we have made good progress in our claim against Rasperia. We now have a final verdict against Rasperia and the damages We cannot comment on the timing of FMA's decisions, but we believe we have a very strong case backed by European sanctioned legislation and by the final verdict by and the already mentioned Austrian Civil Court. We expect to sell the Strabag shares directly from Raspberries' account and will not take them onto our balance sheet. Please understand that I will not comment further on the timing or strategy of this liquidation. We will next update the market as soon as we have a positive decision from FMA. Let us now take a look and the results year-to-date for the core of the group excluding Russia. Consolidated profit stands at around 1.1 billion euros, up 10% year-on-year. Loans to customers are up around 8% year-to-date, with strong momentum in retail in particular. Our CET1 ratio, assuming a worst case in Russia, remains strong at 15.4%. Finally, profitability remains in line with our guidance prior to the Attico windfall around 10% and around 12.5% excluding the legacy issues. Kamila will comment later on in more detail on the result. Before we jump to the outlook, I would like to share with you and a few highlights from Reifeisen Research CE Banking Sector Report for 2026. If you are not familiar with this publication or if you have not received it, I strongly recommend to get in touch with us and we will send you a copy. GDP growth rates continue to improve across our region and the convergence trend towards Western Europe remains strong. We also expect Long growth to remain strong, close to 10% in nominal terms in both 2026 and 2027. Both of these trends are very supportive for our business. And as I mentioned a moment ago, we are very ready to grow. The banking sector itself remains in excellent shape, with remarkable asset quality and structurally higher ROAs compared to euro area banks. Finally, we see that households market investments are under 20% of GDP compared to nearly twice that in Western Europe. This is another tailwind for our business and wealth management is key to our retail strategy. On the next two slides, I want to briefly comment on You can see the individual country GDP outlook. C is expected to remain on the right path and we see further improvements in S&E as well as in Austria and the broader Euro area. Inflation expectations for next year and key rates forecast in our main markets you can see also on slide 11. I won't speak much there and you will anyway find more details from our CE Banking Sector Report. And this brings me finally to the outlook for 2026. We now include both Guaranty and Articoo. Very important to add always on the assumption that Articoo approvals have been obtained still in the last quarter this year and with an assumed participation in Articoo of nearly 95%. The net interest income is now expected above 4.5 billion euros and fee income confirmed around 2.2 billion. OPEX are now expected about 50 million higher, which with rounding brings us close to 3.9 billion. Risk-cost guidance is unchanged with up to 35 basis points. Including Artifo, we can now guide for an ROE of around 13%. and, if you also exclude the one-offs, we are around 16%. Please note that this includes the one-time gain from acquiring an article for less than the book value of equity. Loan growth should remain positive in Q4 and we expect to finish the year up around 9% organically, including the consolidation of the two transactions Our loans to customers will increase by nearly 14% this year. And finally, CET1 ratio is expected around 14.5% excluding Russia, which versus today's 15.4 is largely explained by the impact of the both acquisitions. Thanks for your attention, and I may now hand over to Kamila.

Thank you, Michael. Good afternoon, ladies and gentlemen. Thank you for your interest today. I'm happy to report another steady quarter across all of our operating trends. Starting with NII, we can report a record 1.16 billion euros this quarter. This equals to almost 4.5% growth quarter-on-quarter. Fee income is up around 1.5% quarter-on-quarter across both of these key revenue lines. We expect further decent growth into the year end. OPEX reflects legal and advisory fees relating to the Rasperia case. So excluding this one off, costs would actually have been down in this quarter. I've just learned from Michael that our guidance into the year end has been increased by around 50 million euros. This is largely driven by a decorrelated expenses and integration costs. which was not considered in our previous forecast. Let's look at this and more details on the following slides. So I move on to slide 15 on NII. NII this quarter benefits from further volume growth in both retail and corporate, but equally from a better Euro and Chacaruna key rates, which are our main currencies. These key rate moves also drive the NIM improvement this quarter. mainly on the liability side. Asset margins remain tight, in particular in the retail. Corporate margins have remained broadly stable. Looking at some of our key countries, I would comment on Czech Republic. In the Czech Republic, NII was up 8% in the quarter. We see an improving deposit margin on the liability side, which is partially reflects our own decision not to compete as much. Retail margins remain under pressure. However, this is partially compensated by very robust volume trends. These volume trends we see both in consumer loans and in mortgages. In Romania, margins have stabilized with pressure on the asset side, offset by better liability dynamics. Here, the shift from current accounts to term deposits has slowed, and the current accounts have stabilized. Volumes remained supportive, especially in the new mortgage lending, which continues to accelerate. Moving on to the next slide on the fees. The income remains very encouraging, visible in all countries and across range of products. We see a general pickup in transactions, positive trends in the corporate business, but also in asset management. Overall, we continue to expect around 2.2 billion euros of fees in 2026. On slide 17, you see loans to customers. Loans are up 2% quarter on quarter with good trends I mentioned in the Czech Republic and Romania, but equally Slovakia where mortgages and consumer loans and also corporate lending are all up 3% in the quarter. Serbia also stands out in this quarter. where retail loans are up 5% and the corporate loans up 4% this quarter. After nine months, we have around 8% loan growth in the entire group, although this also includes over a billion of short-term business, which normally rolls off before year-end. Excluding these, our core lending business is up almost 7% in the nine months this year, and we can guide for around 9% organic, or Lending Growth in 2026. Now we also include two acquisitions Michael already mentioned, Garanti which closed this morning and Adico which we also assumed for Q4. Our loan book will grow nearly 14% in 2026. Finally, if we compare these two market trends, we are growing in line with our peers in corporate segments in most markets and even well ahead in Hungary. On the retail side, I'm also pleased that we are growing above the market rates in all of our key markets. As we look ahead at the possible uses of excess capital, I'm encouraged by our organic market share gains. Moving on to deposits on slide 18. Deposits from customers are up 2% in the quarter. In retail, taking into account FX effect, Deposits from households increased 1% quarter on quarter in Czechia and Hungary. In Romania and Serbia, deposits were up 2% each quarter on quarter in local currency. Liquidity ratios remain very comfortable across the entire group. On the following slides, we move on to the capital. With a stable development this quarter, both good on the profitability side, but also on the lending growth. On slide 20, our CET1 ratio assuming a worst-case scenario in Russia and the assumption behind this ratio. On slide 21, you see our CET1 outlook into the year end. We are working on securitization of retail loans, which are expected to close in Q4. This will provide us some further relief ahead of some maturities early next year. The biggest impact in Q4 is of course two acquisitions equal to around 90 basis points of CT1. At around 14.5%, we will be in line with our 14.5 midterm target level. Briefly on slide 22, our threat ratios and requirements. Let me move on to the next slide on the MREL. and generally funding funds, we can report very comfortable MREL ratios in the resolution group Austria, but also across all of our resolution groups. In Romania, we pre-funded MREL impacts of Guaranti and with a senior non-preferred note back in August, which explains unusually high buffer in the areas of Q3. Looking ahead to 2027, Our subsidiaries will be busy. We expect benchmark transactions out of Czech Republic, Slovakia, Hungary, as well as in Romania. And head office, we have a tier two up for call in September of the next year, and we will take a closer look in Q1. And we'll probably issue at least one senior preferred note. Moving on to my last slide on Poland, we continue to guide for litigation provisions of around 220 million in 2026. As in previous years, Provisioning is not linear. In Q3, provisions declined by 251 million, mainly due to lower Swiss franc inflows, and we would expect another slow quarter in Q4. We continue to see good progress in our settlement programs, and overall provision requirements will continue to drop in 2027. Ladies and gentlemen, thank you for your attention, and now hand over to Hannes for a risk update.