Raiffeisen International beat analysts' forecasts with a 51-percent rise in underlying fourth-quarter net profit as income from lending and banking services grew faster than expected, it reported on Wednesday.
Raiffeisen, which operates banks across the former communist bloc, made a net profit before one-offs of 156 million euros.($207 million) in the final three months of 2006, propelled by a 42-percent rise in interest income and fee income that rose 55 percent.
Eleven analysts polled by Reuters had on average forecast a net profit of 144 million euros. The result did not include a 486 million-euro gain from the sale of a Ukrainian business. Raiffeisen said it expects at least 700 million euros in net profit this year, 18 percent more than it made in 2006 but less than the 790 million euros forecast by analaysts according to Reuters Estimates.
"It will be our primary goal again in 2007 to expand market shares through above-average growth in the region," said Chief Executive Herbert Stepic in the group's annual report.
The company reiterated in its annual report that it expected 20 percent annual growth in its balance sheet total until 2009, expecially in Ukraine and Russia, and aimed for a 25 percent return on equity by 2009.
A quarter of the European banking industry's earnings growth this year and next is expected to come from the former communist bloc, according to UBS, as customers are taking out loans to buy their first cars and houses. Raiffeisen has ventured even farther east than rivals like UniCredit's Bank Austria and Erste Bank cquiring Ukraine's biggest bank in 2005 and becoming Russia's biggest foreign-owned lender last year.
Raiffeisen's share price closed at 110 euros on Tuesday, valuing the stock at 20 times next year's forecast earnings, according to Reuters Estimates, a near 50 percent premium to the average price-earnings ratio for European banks.
source:www.reuters.com
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