Austrian financial institution Raiffeisen Bank International (RBI) experienced a notable surge in its shares, with prices rising by 4.5% to EUR14.72 on Friday. This increase came on the heels of an upgrade in RBI’s net interest income guidance, defying the bank’s reported earnings decline for the third quarter. The bank’s strong financial results, which surpassed both top and bottom line consensus expectations, were a key driver behind the surge in its share price.
In Q3, RBI reported a decline in earnings, with a net profit of 879 million euros ($933.6 million), down from EUR1.09 billion in the previous year. The bank’s operating income also dipped by 17% year-on-year, totaling EUR2.25 billion. Despite these declines, the standout performance of net interest income contributed significantly to the bank’s positive market response.
RBI’s nine-month profits were impacted by a decrease in net fee and commission income, falling from 2.682 billion euros in 2022 to 2.364 billion euros. Administrative expenses also saw an increase, rising to 2.874 billion euros from last year’s 2.574 billion euros.
Consolidated profit for the period dropped to 2.114 billion euros, compared to 2.801 billion euros in the previous year. Pre-tax income decreased to 2.931 billion euros from the previous year’s 3.044 billion euros, and the operating result declined to 4.030 billion euros from 2022’s 4.275 billion euros. Additionally, net trading income and fair value results decreased to 205 million euros from the previous year’s 471 million euros. However, net interest income showed substantial growth, increasing to 4.190 billion euros from 3.591 billion euros in the prior year.
For the full year 2023, excluding Russia and Belarus, RBI has forecasted a net fee and commission income ranging from 2.9 billion to 3 billion euros, an annual net interest income between 5.6 billion to 5.7 billion euros, and plans for the deconsolidation of Raiffeisenbank Russia.