Halving of provisions doubles Raiffeisen's profit to 33m euros in Q3

Austria's Raiffeisen Bank posted a 33 million-euro net profit from operations conducted in Romania in the third quarter of the year, up over 6 times against the profit recorded in the similar period of 2009.
Operating profit went up by 6.1%, to 121 million euros, but the significant increase in net profit was sustained by the halving of provision costs for bad loans, to 19 million euros, from 40 million euros in the third quarter of 2009. However, provisions were more than 10% higher against the second quarter of 2010.
How did Raiffeisen manage to cut its provision costs?
"An improvement in the loan portfolio, restructuring steps and selling non-performing loans have been behind this decline," according to the nine-month report published in Vienna, which mentions that the January-September period saw much lower provisions allocated than the similar period of 2009 both for corporate loans and for retail loans. Non-performing loans make up 8.6% of the total.
The bank mostly sold retail loans. Raiffeisen's overall assets fell by 144 million euros in the third quarter, while the first nine months saw assets down by nearly half a billion euros.