Raiffeisen International: Record result based on strong customer business

• Consolidated profit surges by 42 per cent to 841 million euros • Return on equity amounts to 25.7 per cent • Earnings per share rise by 39 per cent to 5.80 euros • Very sound capital base due to successful SPO: Tier 1 ratio increases to 10.5 per cent (plus 1.5 percentage points) • Total assets surge by 30 per cent to nearly 73 billion euros, lending volume rises by almost 40 per cent • Retail customer segment shows largest profit growth: Plus 85 per cent to 487 million euros • Corporate customer segment achieves highest profit contribution: 669 million euros (plus 43 per cent) • Contributions to Profit before tax regionally well diversified: Central Europe 34 per cent, Southeastern Europe 36 per cent, CIS 30 per cent • Increased efficiency improves cost/income ratio to 57.6 per cent • Integration projects proceed as scheduled • Strongest sales network of all Western banks in CEE • Customer base extended by 1.6 million to 13.7 million • Outlook 2008: Consolidated profit of about 1 billion euros targeted

Raiffeisen International Bank-Holding AG, a member of the RZB Group headed by Raiffeisen Zentralbank Österreich AG, utilized the growth dynamics in Central and Eastern European markets and once again achieved a record result on the back of a strong development of customer business. Consolidated profit (after tax and minorities) surged by 41.7 per cent to 841 million euros (2006: 594 million euros). Profit before tax crossed the 1 billion euros threshold for the first time and amounted to 1.24 billion euros (2006: 891 million euros). Earnings per share rose from 4.17 in 2006 to 5.80 euros. The Managing Board will propose the General Shareholders Meeting to increase the dividend per share for the business year 2007 by 0.22 euros to 0.93 euros (2006: 0.71 euros). Based on that proposal the payout would amount to 143.8 million euros. (All data according to International Financial Reporting Standards (IFRS). All data related to the business year 2006 are displayed without one-off or special effects for reasons of better comparison.) Herbert Stepic, CEO of Raiffeisen International, said, "Despite the turbulences on the global credit and capital markets we have had an outstanding year 2007. We have very successfully placed our Secondary Public Offering in an extremely challenging market environment and closed the year with yet another record result. The increase in consolidated profit of 247 million euros in 2007 is larger than our total consolidated profit was in 2004, at 209 million euros. This underlines that the traditional customer-focused banking business in our markets is characterized by both strong growth and strong profitability. We have earned confidence by having achieved all strategic and financial goals set at the IPO in 2005 on time." Strong volume growth in customer business – total assets plus 30 per cent In 2007, Raiffeisen International continued to utilize the positive growth environment in CEE and notably extended its customer business. Loans and advances to customers grew by 39.5 per cent to 48.9 billion euros (2006: 35.0 billion euros), while deposits from customers increased by 22.0 per cent to 40.5 billion euros (2006: 33.2 billion euros). The balance sheet total at year-end 2007 increased almost exclusively organically by 30.2 per cent to 72.7 billion euros. For comparison: At year-end 2002, the balance sheet total amounted to 14.4 billion euros. The average annual growth rate of the balance sheet total was 38 per cent during the past five years. Strong earnings growth in customer business – Operating income plus 32 per cent The operating result of Raiffeisen International has again developed very positively in 2007. Operating income surged by 32.2 per cent to 3.79 billion euros (2006: 2.87 billion euros). This increase was driven by the two most important customer-related components: interest income and commission income. Net interest income increased by 37.1 per cent to 2.42 billion euros (2006: 1.76 billion euros). Net commission income advanced by 33.9 per cent to 1.25 billion euros (2006: 0.93 billion euros). Due to the difficult market environment and a special effect in the previous year, trading profit declined by 26.8 per cent to 127.9 million euros (2006: 174.8 million euros). The increase in general administrative expenses was slightly lower than the increase in operating income, which was primarily due to strict cost management. In total, general administrative expenses rose by 29.0 per cent to 2.18 billion euros (2006: 1.69 billion euros). The resulting profit from operating activities increased by 36.9 per cent to 1.61 billion euros (2006: 1.17 billion euros). The cost/income ratio, which represents general administrative expenses in relation to operating income, thus further improved as planned from 59.1 per cent to 57.6 per cent. Southeastern Europe Southeastern Europe registered the highest earnings growth of all three regional segments in the reporting period. Thanks to the good market position of group units in this region, profit before tax grew by 55 per cent to 442 million euros. The return on equity before tax likewise improved significantly from 28.2 per cent before to 30.2 per cent. Net interest income in the region grew by 28 per cent, or 158 million euros, to 718 million euros, although the net interest margin declined slightly, by 6 basis points to 3.48 per cent. Balance sheet assets rose by 23 per cent to 23.2 billion euros. The risk-weighted assets increased somewhat more strongly, by 30 per cent from 12.6 billion euros before to 16.4 billion euros. Positive development characterized provisioning for impairment losses. Low levels of new allocations to provisions for impairment losses were necessary, an increase of only 26 per cent or 22 million euros, despite a stark increase in business volume in comparison to the previous year. The total amount of provisions for impairment losses fell to 66 million euros. It was possible to lower provisioning in some group units thanks to a solid customer base and good development of the risk structure. That resulted in a substantial reduction of the risk/earnings ratio, from 15.8 per cent to 9.2 per cent. The region’s net commission income rose strongly, by 44 per cent from 268 million euros before to 386 million euros. The largest increase was achieved by the group unit in Romania thanks to a pronounced retail orientation and solid customer base. Good development in payment transfers and account services at 167 million euros and in foreign exchange and notes/coins business at 82 million euros were critical for this increase. The asset management unit in Croatia newly consolidated in the reporting year contributed 12 million euros to net commission income. Assets under management reached 0.6 billion euros. The Southeastern Europe segment made trading profit of 35 million euros. That result is largely based on currency-related business and was 31 per cent below the preceding year’s value. Valuation losses of about 10 million euros from hedging transactions in Croatia, used to minimize the currency risk of certain credit portfolios, were the main reason for that. Income from interest-related business likewise declined due to the rising interest rate level in the region. * * * * * Raiffeisen International operates one of the largest banking networks in CEE. 17 markets of Europe's growth region are covered by subsidiary banks, finance leasing companies and a number of other financial service providers. About 14 million customers are attended to through more than 3,000 business outlets. Raiffeisen International is a fully consolidated subsidiary of Raiffeisen Zentralbank Österreich AG (RZB), which owns 68.5 per cent of the common stock. The balance is free float, the shares are traded on the Vienna Stock Exchange. RZB is a leading corporate and investment bank in Austria and the central institution of the Austrian Raiffeisen Banking Group, the country's largest banking group. You can access the web-version of Raiffeisen International's annual report on http://ar2007.ri.co.at. The English printed version can be subscribed to on that site. For further information please contact Michael Palzer (+43.1/717 07-1504, michael.palzer@ri.co.at) or Lars D. Hofer (+43.1/71 707-1930, lars.hofer@ri.co.at). http://www.ri.co.at, http://www.rzb.at
Tags: euros billion million income raiffeisen customer business interest europe region increased operating group increase balance before total based result record international strong consolidated assets earnings profit growth