Romania, Austrian banks' bonanza

Austrian bank’s subsidiaries in Romania reported last year a combined profit of over 743.8 mln euros, up 88.3% from a year earlier, after massive funds pumped in the recent years by Viennese bankers.

If in 2007, Austrian banks active in Romanian market reported a combined profit of about 395 million euros, last year, the lenders posted a roughly double income driven by operations in domestic market.

Austrian banks active in Romania are: Banca Comerciala Romana, held by Erste Bank, Raiffeisen Bank Romania (Raiffeisen Group), UniCredit Tiriac Bank (Bank Austria) and Volksbank Romania.

Volksbank Romania reported for 2008 a profit before taxes of 37.8 million euros, up 54% from a year earlier, as the total assets hiked at a similar pace. In 2007, the bank marked 24.5 mln euro profit before taxes.

Raiffeisen Bank Romania said it recorded a net profit of 165 million euros, up 75.6% compared to 2007, on solid growth driven by interests and fees, the bank said earlier today.

In prior year, the bank recorded a net profit of 94 million euros.

Raiffeisen Bank Romania’s profit before taxes equated 196 million last year, from 116 million euro a year earlier.

Net interest income rose 23%, up to 245 million euros, while credit fee income hiked 27% up to 246 million euros. Salaries, employee benefits and other administrative expenses increased last year by 12%.

The bank’s total assets reached 4.65 bln euros last year, from 4.4 bln euros in December 2007.
BCR, Romania’s biggest bank ended year with a record after-tax profit of 541 million euros, at a net earning of roughly 193 million euros stemming from the sale of minority stakes in Asiban and Italo-Romena Bank, as well as from own insurance division.

BCR’s total assets rose 9% last year, up to 68.08 bln lei until December 31, 2008, from 63.36 bln lei at the end of 2007.

UniCredit will make public its annual earning report on March 18.

Good dividend yield, after a record year for Romanian banking landscape

Volksbank Romania will pay out dividends of nearly 20-25 million euros from last year’s profit. However, the bank will soon request a consistent capital increase, said the CEO of the bank, Gerald Schreiner.

“Every year, a slice of the profit remains in the bank, it is reinvested, but another share goes to stockholders in dividends. Last year for example, after dividend payout, we received a double amount in capital raise. This year, we will probably propose dividends of 20-25 million euros, together with a capital raise,” Schreiner explained.

Raiffeisen Bank will make a final decision on dividend payout at the general meeting of shareholders scheduled for March. CEO of Raiffeisen Bank Romania, Steven van Groningen heralded a possible 25-mln euros level.

“I don’t expect a level higher than last year, but we will clearly guide a part of the profit to capital raise”, said van Groningen, adding that the amount will probably hover around 25 million euros.

However, he stressed that the final points will be hammered out by the stockholders at the general meeting scheduled for this month.

“The important thing is to have a good solvency ratio. If now it is slightly over 11%, if we include the profit for 2008, it will exceed 13%”, van Groningen said.

Raiffeisen Bank Romania paid 43 million lei in dividends to shareholders last year, namely 18% of net profit.

Except dividends to stockholders, Raiffeisen group has not withdrawn and will not withdraw cash from Romania, said Herbert Stepic, CEO of Raiffeisen International, the parent bank of Raiffeisen Bank Romania.

“We will provide enough liquidity and capital to help Raiffeisen Bank Romania acquire all its objectives”, Stepic said.

He added that if the level of loans exceeded deposit volume by wide margin, Raiffeisen International would shore up the lending activity of its subsidiary with financing.

Since 1997, Raiffeisen Group invested over 200 million euros in Romania, the bank said.

For 2008, Erste’s board of directors will propose to pay out a dividend of 65 cents per share at shareholders’ meeting, versus 0.75 euros per share in 2007.

Until listing, BCR will be poised to allocate a minimum 40%of net profit for dividend payout.

Erste Bank’s chief financial officer, Manfred Wimmer said recently that Erste would put off the listing of Banca Comerciala Romana, as this year’s market evolution makes the listing of a bank a bad-timed move.

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