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Raiffeisen Bank Romania needs no extra funds

Based on both international and Romanian standards we have over 10 per cent solvability, said bank's President Steven van Groningen

Raiffeisen Bank will not need any additional funds following the stress tests performed by the central bank, the results of which coincide with the bank's own calculations taking an even more conservative approach than BNR's, said bank's President Steven van Groningen.

‘It was a very good result for us. Based on both international and Romanian standards we have over 10 per cent solvability. We won't be needing additional funds. We have conducted our own internal tests where, for some aspects concerned, we took an even more conservative approach than the central bank,' said van Groningen, quoted by Mediafax. He pointed out that, in the first three months of 2009, provisions had gone up in the market average, but the solvability rate remained high.

Van Groningen added that the bank had the necessary resources to increase its own funds. According to van Groningen, at the end of Q1 2009, the bank had a solvability rate of over 12 per cent, calculated in keeping with the international reporting standards (IFRS).

‘Last year we had EUR 150 M profit, of which we paid EUR 50 M as dividends, therefore we kept an additional amount of EUR 110 M as own funds,' added the president of Raiffeisen Bank.

Banking sources say the stress tests applied by the central bank based on the financial results at the end of last year indicate a need for additional capital of no more than EUR 1 bln for commercial banks, after increasing solvability limit from eight to 10 per cent in September. Under the agreement with the IMF, stress tests will be applied to all banks with an asset market share of over 15 per cent, as well as to the smaller lending organisations.

Long-term trends, more important than 2009 profit

Raiffeisen Bank Romania will make a profit this year. However, the bank will not be exclusively looking at profit this year, finding long-term trends to be more important, said Raiffeisen Bank Romania President Steven van Groningen.

Van Groningen estimates a net profit of RON 398.57 M in 2009, 44.7 per cent less than in 2008 - RON 721 M, calculated in keeping with the Romanian accounting standards (RAS).

On the other hand, the Raiffeisen Romania president said cost management was one of the bank's priorities. He also explained that the bank officials were also looking at the production capacity such as the need to keep long working hours at certain agencies or the same number of analysts in the context of a different volume on the market.

Moreover, Raiffeisen officials are also re-assessing and making some processes in the bank such as archiving more cost-effective. On the other hand, van Groningen said about 120 staff had to be let go in Q1.

 

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Tags: groningen profit president solvability romania funds raiffeisen

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