FINANCIALS: RBIAV: Conf Call Underpins Guidance Positives

Raiffeisen Bank (RBIAV: A1) conf call highlighted both the positive guidance moves in the ex-Russia financials but also the difficulty in realising any value in the foreseeable future for that Russian business. Having seen the step change in spreads last time around, we feel the incremental news is positive which should be supportive, but this remains a volatile and politicised situation, in our view.

• Russia remains the key delta for the group: mgmt is pursuing a strategy to shrink but it remains to be seen if this satisfies the ECB. Mgmt did also note that the Strabag shares, which were to be paid to RBI in exchange for its Russian bank, have now been transferred to a non-sanctioned entity. Mgmt appears to be hoping that something around this satisfies US and Euro regulators. We have no particular knowledge in this area, but it notionally appears unlikely to us.
• Separately, mgmt are seeing some strong operating metrics including on new lending, which are some of the drivers behind the upgraded guidance with these figures. It did also mention that there is a 70bp element in the CET1 ratio which is Russian operational risk, and that any sort of exit/closure/zeroing could trigger that scale of uplift to the ex-Russia CET1 ratio.