Raiffeisenlandesbank increases profits by 80 percent and creates a “buffer”

Higher interest rates, stable lending business and significantly better development of investments have brought Raiffeisenlandesbank Oberösterreich (RLB) around 80 percent more profit. The annual profit after taxes rose to 608 million euros in the previous year.

And this despite the fact that the bank has increased risk provisions for potential loan defaults by 153 percent to 234 million euros after the exceptionally low levels of recent years. “We have acted very conservatively and have created a buffer for the future, we have no worries,” said RLB General Director Heinrich Schaller at the annual press conference on Friday. The common equity core capital ratio was increased by 0.8 percentage points to 16.6 percent – “far above the legal requirements,” said Schaller.

Residential construction should start again

There was a two-thirds decline in new housing loans last year, but total customer receivables still grew by 0.2 percent to 26 billion euros. We are currently seeing increased interest in advice on housing loans, “but no deals” because the details of the federal government’s housing package are still missing, said Schaller. In one to two months, however, he expects “a sharp increase in private housing financing.”

The savings volume of the entire Raiffeisen banking group (including 68 regional Raiffeisen banks) rose by 14 percent to 18.7 billion euros. “We continue to see the trend that customers want to use reliable forms of savings,” says Schaller, who sees a “renaissance in savings” that is primarily taking place online. According to preliminary figures, the Raiffeisen banking group has doubled its result from ordinary business activities to 422 million euros.

The earnings contribution of the eleven “at-equity” investments multiplied from 40 to 439 million euros, primarily due to valuations. These include voestalpine, Amag and RBI.

Schaller “cannot fully understand” the fact that the European Central Bank (ECB) is calling on Raiffeisen Bank International (RBI) to speed up its exit from Russia. He also wondered what legal basis the ECB was operating on. And: “The RBI is not just made up of Russia,” it has a “large portfolio of network banks that produce good results.”

The SPÖ’s demand for special bank levies caused Schaller to shake his head. “We have had eight to nine difficult years with negative interest rates. It is important to build up equity in order to do sensible business for customers.”

Schaller on the economy: “We were in a recession in 2023. I hope that we will come out of this in 2024, but I’m not sure whether that will really succeed.”