Gross profit stood at 89.3 million euros, up 67% against the first six months of 2007. The results were calculated in line with international financial reporting standards and only concerning the bank, not consolidated with the results of the other divisions from the group. "We are very pleased with the first half results because even though market shares have been discussed quite a lot, it becomes increasingly clear that a strategy to constantly and significantly improve profitability is much healthier," Steven van Groningen, chairman and CEO of Raiffeisen Bank told ZF.
He notes that the increase in profit occurred amid significant network expansion, which is set to reach 600 branches by 2010.
"We do not have specific targets because the market changes. We need to look at the other players and we can no longer use annual plans, but must analyse the situation every few months," van Groningen adds. The bank has overshot the 500-branch mark so far, compared with 337 units it had in June last year.
Since last June, Raiffeisen's assets have increased by 16% and reached 4.57bn euros, whilst against last December assets increased by 5%. In addition, Raiffeisen reported 5.8 billion-euro exposure to the Romanian market in Vienna, up by 3.6% since the beginning of the year.
Having advanced more slowly than the market, Raiffeisen is seeing a narrowing gap that separates its from its competitors. After registering a steady rate over the last few years, the Austrians at Volksbank reached almost 4.5 billion euros in assets at the end of June. Banca Transilvania, the only player with private Romanian capital among the top ten banks, saw its assets go up by 14% in the first half alone and reach 4.3 billion euros. BCR remains the leader of the banking system, thanks to assets worth 16.6 billion euros.
Group-wide, BCR made a 206.6 million-euro net profit in the first six months. The French at BRD-SocGen maintained the second spot, with 12 billion euros in assets, an increase of 22% against the same time last year.
The net profit in the first half (calculated according to the local accounting standards) stood at 140.3 million euros. Raiffeisen's top man says that the new market context clearly sets players apart. "We all behaved in the same way until recently, now one can clearly see who is after market share by assets, which can no longer be gained unless one compromises the quality of the loan portfolio or profitability. On the other side are banks with a more balanced approach," van Groningen comments.
The loans Raiffeisen Bank granted its clients exceeded 2.9 billion euros in midyear, having thus leapt by 40% compared with June 2007. On the other hand, the funds raised from customers were slower to increase, by 15% to 3.5 billion euros. Raiffeisen therefore remains one of the few players in the system with a granted loans / attracted deposits ratio that is below one. Steven van Groningen says he cannot foresee any spectacular performances from any of the retail products and says the bank sold well on every segment.
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