Raiffeisen Bank International AG (RBI) has revised its outlook due to the changed circumstances affecting the daily environment and the global economy as a result of the measures being taken to limit the spread of COVID-19. The associated constraints are likely to result in a severe recession in the Euro area (assumed -4% GDP in 2020) with negative repercussions for RBI’s markets (assumed up to -6% GDP in 2020):
- We are reducing our loan growth expectations for 2020.
- The provisioning ratio for FY 2020 is currently expected to rise to between 50 and 75 basis points, depending on the length and severity of disruption.
- We aim to achieve a cost/income ratio of around 55 per cent in the medium term and are evaluating how the current circumstances will impact the ratio in 2021.
- In the medium term we target a consolidated return on equity of approximately 11 per cent, but are still evaluating the impact of the current environment on profitability in 2020.
- We confirm our CET1 ratio target of around 13 per cent.
- Based on this target we intend to distribute between 20 and 50 per cent of consolidated profit.
Please find the full version of the press release in the PDF version attached here.