(Adds more details, analysts' comments, one-off gain)
By Boris Groendahl
VIENNA, Aug 7 (Reuters) - Austria's Raiffeisen International
<RIBH.VI> bank beat market expectations with a 49 percent rise
in second-quarter net profit on Thursday, as revenues expanded
across the board while risk provisions were kept in check.
Net profit after minorities rose to 311 million euros ($483
million), also helped by a 44-million euro gain on swaps.
A Reuters poll had on average forecast 283 million euros of
net profit. Raiffeisen, emerging Europe's No.3 lender, exceeded
estimates for all revenue streams while loan loss provisions --
closely eyed at emerging markets banks -- were slightly lower
than expected.
Shares in Raiffeisen rose 3 percent by 0826 GMT, making it
the top gainer in the DJ Stoxx European bank index <.SX7P>.
"Every line of the P&L is above expectations," said Erste
Bank analyst Guenter Hohberger.
But several analysts said they were waiting for more
explanation of the valuation gain, which contributed a big part
to the profit increase.
"We have to wait for the explanation of the result on
derivative trading as this seems to be a strong one-off item
'improving' the results significantly," said Wood & Company
analyst Jiri Stanik.
Raiffeisen said the gain was mainly due to dollar interest
rate swaps used by its Russian bank to hedge against interest
rate changes.
Like most banks in emerging Europe, Raiffeisen outperformed
the bank index this year, as brisk credit and fee growth in the
region continued unabated and as their reliance on deposit
funding saved them from writedowns on credit assets.
Raiffeisen's Belgian peer KBC <KBC.BR> on Thursday reported
underlying net profit for its eastern European franchise of 190
million euros in the second quarter, up 8 percent and partly
offsetting a profit decline due to domestic writedowns.
[]
REVENUES RISE
Net interest income, Raiffeisen's main revenue source, rose
37 percent to 787 million euros. Growth was strongest in the
former Soviet Union, although the expansion was below 40
percent, slower than in previous quarters.
Risk provisions grew faster than interest income, up 40
percent to 108.3 million euros, but were slightly below the
average forecast. But non-performing loans edged up in all its
regions, particularly in Russia.
General administrative costs showed the signs of its rapid
expansion in Russia, where it is the biggest foreign lender, and
of accelerating inflation in all of emerging Europe. They rose
26 percent, slightly more than expected.
The bank reiterated its forecast of about 1 billion euros in
net profit this year.
Investors are currently paying around 2.2 times book value
for Raiffeisen's shares, one of the highest values among large
European banks thanks to its exposure to the fast growing
banking market in emerging Europe.
Raiffeisen, the international arm of cooperative bank RZB,
has 14.4 million clients in 17 countries across the former
Communist bloc.
(Editing by Louise Ireland)
