* RBI shares fell almost 5% yesterday
Raiffeisen Bank International (RBI), the majority shareholder of Raiffeisen Bank România, has revised upwards its estimates concerning the level of provisions for non-performing loans which it will need to set up this year. Thus, whereas initially the financial group expected provisions to reach 1.009 billion Euros this year, sees loan-loss provisions of as much as 1.2 billion Euros. The revision was caused by the evolution of the group's corporate client portfolios, in Central and Eastern Europe.
Among the main clauses that make the hike of the provisions necessary comprise the deterioration of some loans granted to Austrian companies, as well as loans to Chinese clients that are involved in cases of fraud, said Susanne Langer, a spokesperson of RBI, according to Bloomberg.
Also, the bank has conducted a review of the quality of its assets in Slovenia, at the request of the European Union, following which an increase in provisions was necessary, she added.
Other factors that have led to the increased forecasts are the losses on the corporate segment in Bulgaria and a change in the methodology in Albania, which resulted in an increase of the loans that need to be classified as non-performing, the RBI official said.
Raiffeisen stands by its estimates which say that the volume of loans will suffer minor changes, and interest revenues will increase slightly, according to the representatives of the bank, who claim that no provisions have been set up for the possible losses on the mortgage loans in Hungary, since no information on the final form of the legislation by which the government in Budapest intends to impose currency exchange losses on banks. Hungarian Prime Minister Viktor Orban has announced that his government intends to amend the law of mortgage loans denominated in foreign currencies.
