The Austrian bank Raiffeisen Bank International (RBI) reiterated on Wednesday that it expects an increase in bad loans in the upcoming period due to tensions in the main markets, while also reporting an increase in profit in the third quarter.
– We expect a slight increase in the volume of non-performing loans in the coming months and a stable or slightly increased share of net provisions – the bank stated, primarily pointing to frequent issues with meeting financial obligations in Hungary and Southeast Europe.
In August, RBI announced that it expects an increase in non-performing loans given the situation in Eastern European economies.
In the third quarter, the bank’s consolidated profit rose by 8.5 percent to 141 million euros, thanks to reduced provisions for non-performing loans, which amounted to 224 million euros, compared to 377 million euros in the same period last year.
RBI also warns that the bank tax in Austria and in certain countries in Central and Eastern Europe is likely to cut annual profit by 160 million euros.
Next year, the bank is expected to record the same expense for the bank tax in Austria as this year, amounting to 104 million euros. In Hungary, it is expected to rise from 26 million to 40 million euros, and in Slovakia from 28 to 35 million euros, the bank estimates.
RBI also reiterates that recapitalization remains an option, depending on market conditions.
