rbi-2023-12-31-en

· Overview



Monetary values in € million	2023	2022	Change	2021	2020	2019
Income statement	1/1-31/12	1/1-31/12		1/1-31/12	1/1-31/12	1/1-31/12
Net interest income	5,683	5,053	12.5%	3,327	3,121	3,412
Net fee and commission income	3,042	3,878	(21.6)%	1,985	1,684	1,797
General administrative expenses	(3,908)	(3,552)	10.0%	(2,978)	(2,832)	(3,052)
Operating result	5,158	6,158	(16.2)%	2,592	2,241	2,492
Impairment losses on financial assets	(393)	(949)	(58.6)%	(295)	(598)	(234)
Profit/loss before tax	3,576	4,203	(14.9)%	1,790	1,183	1,767
Profit/loss after tax	2,578	3,797	(32.1)%	1,508	910	1,365
Consolidated profit/loss	2,386	3,627	(34.2)%	1,372	804	1,227
Statement of financial position	31/12	31/12		31/12	31/12	31/12
Loans to banks	14,714	15,716	(6.4)%	16,630	11,952	9,435
Loans to customers	99,434	103,230	(3.7)%	100,832	90,671	91,204
Deposits from banks	26,144	33,641	(22.3)%	34,607	29,121	23,607
Deposits from customers	119,353	125,099	(4.6)%	115,153	102,112	96,214
Equity	19,849	18,764	5.8%	15,475	14,288	13,765
Total assets	198,241	207,057	(4.3)%	192,101	165,959	152,200
Key figures	1/1-31/12	1/1-31/12		1/1-31/12	1/1-31/12	1/1-31/12
Return on equity before tax	19.8%	26.6%	(6.9) PP	12.6%	8.8%	14.2%
Return on equity after tax	14.3%	24.1%	(9.8) PP	10.6%	6.8%	11.0%
Consolidated return on equity	14.8%	26.8%	(12.0) PP	10.9%	6.4%	11.0%
Cost/income ratio	43.1%	36.6%	6.5 PP	53.5%	55.8%	55.1%
Return on assets before tax	1.72%	2.02%	(0.30) PP	0.99%	0.74%	1.18%
Net interest margin (average interest-bearing assets)	2.87%	2.59%	0.28 PP	2.01%	2.13%	2.44%
Provisioning ratio (average loans to customers)	0.34%	0.73%	(0.39) PP	0.30%	0.67%	0.26%
Bank-specific information	31/12	31/12		31/12	31/12	31/12
NPE ratio	1.9%	1.6%	0.3 PP	1.6%	1.9%	2.1%
NPE coverage ratio	51.7%	59.0%	(7.4) PP	62.5%	61.5%	61.0%
Total risk-weighted assets (RWA)	93,664	97,680	(4.1)%	89,928	78,864	77,966
Common equity tier 1 ratio (transitional)	17.3%	16.0%	1.3 PP	13.1%	13.6%	13.9%
Tier 1 ratio (transitional)	19.1%	17.7%	1.4 PP	15.0%	15.8%	15.5%
Total capital ratio (transitional)	21.5%	20.2%	1.4 PP	17.6%	18.5%	18.0%
Stock data	1/1-31/12	1/1-31/12		1/1-31/12	1/1-31/12	1/1-31/12
Earnings per share in €	6.93	10.76	(35.5)%	3.89	2.22	3.54
Closing price in € (31/12)	18.67	15.35	21.6%	25.88	16.68	22.39
High (closing prices) in €	18.75	28.42	(34.0)%	29.40	22.92	24.31
Low (closing prices) in €	12.73	10.00	27.3%	16.17	11.25	18.69
Number of shares in million (31/12)	328.94	328.94	0.0%	328.94	328.94	328.94
Market capitalization in € million (31/12)	6,141	5,049	21.6%	8,513	5,487	7,365
Dividend per share in €	1.25	0.80	56.3%	–	1.23	–
Resources	31/12	31/12		31/12	31/12	31/12
Employees as at reporting date (full-time equivalents)	44,887	44,414	1.1%	46,185	45,414	46,873
Business outlets	1,519	1,664	(8.7)%	1,771	1,857	2,040
Customers in million1	18.6	18.1	2.8%	19.5	17.6	17.2
1 Adjustment of the previous year's figures due to the inclusion of customers from the credit card business
In this report RBI denotes the RBI Group. If RBI AG is used it denotes Raiffeisen Bank International AG. Head office refers to Raiffeisen Bank International AG excluding branches.

Adding and subtracting rounded amounts in tables and charts may lead to minor discrepancies. Changes in tables are based on not rounded amounts. The ratios referenced in this report are defined in the consolidated financial statements under key figures.

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Content


Segment and country analysis	32

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

The report in English is a translation of the original German report. The only authentic version is the German version.

Group Management Report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Market development

Weak economy in a crisis-ridden environment

While the US economy was remarkably robust in 2023, Europe’s economic environment was characterized by a stagnant

economic cycle. Economic support from the services sector weakened significantly over the course of the year, while the

industrial sector remained in recession for most of the year. As a result, more service-driven economies achieved slightly

above-average growth, while more manufacturing-oriented countries in Western Europe such as Germany and Austria found

themselves in mild recessions. Overall inflation fell noticeably in 2023, mostly due to energy prices, although the core rate of

inflation sank much more gradually. Both the US Federal Reserve and the ECB continued their series of interest rate hikes into

the (late) summer and then left key rates unchanged for the rest of the year.

The euro area’s gross domestic product was only slightly higher on average in 2023 than in 2022. In the second half of 2023,

economic momentum weakened and GDP was below the level of the first half of the year. What is striking in this economic

cycle is the robust labor market. Unemployment rates have barely risen, many jobs are vacant and employment levels are high

despite the persistently weak economy. Inflation fell from 8.6 per cent at the beginning of the year to below 3 per cent in the

fall. Price increases for food and many tangible goods have slowed, and energy goods are actually cheaper than in the year

before. Services, on the other hand, saw stronger price growth in 2023 than in 2022.

The European Central Bank (ECB) raised its key rates 200 basis points in 2023. In addition, the bond holdings in the APP (asset

purchase programme) portfolio were reduced around € 200 billion by stopping reinvestments of maturing bonds. The bulk of

the central bank’s balance sheet reduction was achieved by allowing refinancing transactions to mature. The outstanding

volume of these loans to commercial banks fell over € 1,300 billion by the end of 2023. While short-dated money market rates

rose roughly the same amount as key interest rates, interest on swap rates and yields on German government bonds with five-

to ten-year maturities were barely higher at the end of the year than at the beginning. However, performance was extremely

volatile over the course of the year. One key element in the interest rate market is the inverted yield curve. In 2023, the interest

rate for swap rates and German bonds with short maturities was consistently higher than that for long maturities.

The Austrian economy was in recession in parts of 2023, with real GDP falling 0.7 per cent for the year as a whole. This made

the Austrian economy one of the worst performers in the euro area. In addition to the industry and construction sector, this

was also due to consumer related services. The construction industry experienced a stronger real correction in Austria than in

many other euro countries. Inflation fell noticeably over the course of the year. However, at an annual average of 7.7 per cent, it

was still well above the euro area’s level (2 percentage points). Austria’s conspicuously weak economy can also be partially

attributed to above-average inflation.

CEE: High interest rates and inflation, sluggish growth

The CEE region’s economy was affected by inflation and industry weakness in 2023 in much the same way as the euro area

and Austria were. Some of the measures taken in 2022 to combat inflation (price regulations and energy price caps) expired in

2023, which shifted inflationary pressure from 2022 to 2023. Inflationary pressure was overall more persistent in the region

than in the euro area, in large part because the labor markets were already very tight before the war in Ukraine drove up

(energy) prices, which increased wage pressures. Nevertheless, base effects for energy prices caused inflation to start falling in

the first half of 2023. Given the significant steps taken by central banks in Central and Eastern Europe back in 2021 and 2022,

most CEE countries did not enact more interest rate hikes in the first half of 2023 (with the exception of Albania and Serbia). As

the year progressed, some central banks in the CEE region felt able to cut key rates in response to a further decline in inflation

rates; other banks continued to wait.

The industrial sector was weak in large parts of Central Europe (CE) in 2023. Because of this sector’s importance to these

economies and close ties with the German industrial sector, the region underperformed most of Europe. However, a strong

inflow of EU funds, improving foreign trade and a moderate recovery in consumer demand fueled a slight recovery over the

course of the year. Thanks to a strong boost from foreign trade, Slovakia (up 1.3 per cent) outperformed the rest of the Central

European countries (up 0.1 per cent). Support also came from access to NextGenerationEU funds (NGEU funds), which Poland

and Hungary could not (yet) tap.

6Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Once again, the economy in Southeastern Europe (SEE) outperformed the euro area and Central Europe because SEE depends

much less on the industrial sector, which had been battered more by the war in Ukraine and high energy prices. Southeastern

Europe’s strong performance was supported by an abundant inflow of EU funds along with a strong tourist season.

Nevertheless, growth in SEE only reached 1.8 per cent in 2023, with Albania leading the way (up 3.5 per cent). Supporting factors

in this country were the construction sector and tourism, private and public spending as well as investment. The lowest growth

was posted in Romania (up 1.5 per cent), where the economy disappointed in the autumn due to the continued weakness of its

industrial sector.

In Eastern Europe (EE), Ukraine recorded the strongest growth in 2023 (up 5.7 per cent), due to its robust adjustment to the

war and base effects. The Russian economy, in contrast, grew 2.5 per cent in 2023, supported by fiscal policy and defense

spending. In Belarus, the impact of EU and US sanctions increased significantly, but the country managed to grow 3.9 per cent,

partly due to state-subsidized investments in the modernization of industrial plants and machinery.

Annual real GDP growth in per cent compared to the previous year


Region/country	2022	2023e	2024f	2025f
Poland	5.1	0.2	3.1	3.5
Slovakia	1.7	1.3	2.1	2.1
Czech Republic	2.4	(0.5)	1.7	3.2
Hungary	4.6	(0.5)	3.0	4.0
Central Europe	4.0	0.1	2.7	3.4
Albania	4.9	3.5	3.5	3.8
Bosnia and Herzegovina	4.2	1.8	3.0	3.5
Croatia	6.3	2.1	2.5	2.6
Kosovo	5.2	3.2	3.9	4.0
Romania	4.1	1.5	2.8	3.5
Serbia	2.4	2.5	3.0	4.0
Southeastern Europe	4.3	1.8	2.8	3.5
Belarus	(4.7)	3.9	2.0	2.0
Russia	(2.1)	2.5	1.5	0.9
Ukraine	(29.1)	5.7	4.9	6.5
Eastern Europe	(3.9)	2.8	1.8	1.4
Austria	4.8	(0.7)	0.2	1.4
Euro area	3.4	0.5	0.5	1.5
Source: Raiffeisen Research, as of beginning of February 2024, (e: estimate, f: forecast); subsequent revisions are possible for years already completed

Banking sector in Austria

The Austrian banking sector carried on the good performance from 2022 and improved on it in 2023. The operating business

was supported by increasing net interest income and stable performance in the commission business. Nevertheless, operating

costs increased as well. Risk costs in 2023 were lower than in the previous year, however. The funding environment for the

Austrian banking sector was challenging in 2023. Nevertheless, Austrian banks held their own in the primary market once again

and placed significantly larger volumes than in the years before 2022, especially in the covered bond segment. Growth rates of

the loan volumes granted in both the household and corporate loan segments show a significant year-on-year slowdown. This

is primarily due to the different interest rate environment and, to a lesser extent, to the changed regulatory framework for

lending guidelines. The household segment showed negative year-on-year growth of minus 1.9 per cent as of November 2023.

Loan growth in this segment became negative as of the middle of the year. The corporate segment reported annual growth of

2.9 per cent (November 2023 vs. November 2022) compared to growth of 11.3 per cent at the same time in the previous year.

The banking sector’s capitalization increased further compared to the start of 2023, reaching 16.6 per cent (common equity tier

1 ratio) as of June 2023. The Austrian Financial Market Stability Board concluded in its September 2022 meeting that Austrian

banks are less capitalized than their European peers and therefore recommended raising macroprudential buffer requirements

for selected banks another 0.5 percentage points and gradually phasing in this increase over two years. Accordingly, these

requirements rose 0.25 percentage points for selected institutions at the turn of the year.

Group management report7

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Development of the banking sector in CEE

As key interest rates remained high for most of 2023 (and euro markets caught up), CE/SEE banks were able to further improve

their profitability thanks to wider net interest margins while risk costs remained rather limited as the number of loan defaults

remained low. The average return on equity in the region was over 15 per cent, which is consistent with the most successful

years before the global financial crisis. The turbulence in the US banking sector had no major impacts. All in all, core banking

income proved to be strong enough to compensate for the additional bank taxes levied in certain countries, inflationary

pressure on operating costs and the switch to a more expensive refinancing mix (rising percentage of time deposits, expensive

MREL funding). At the same time, stricter financial conditions and the weaker economic environment slowed down lending

significantly, which particularly affected investment loans to companies and the market for residential construction loans. The

Eastern European markets experienced a strong turnaround as banks returned to profitability in Russia (normalized monetary

conditions, politically supported lending) and Ukraine (high interest rates, macroeconomic improvements).

Regulatory environment

Supervisory priorities and interaction with the ECB

· Reinforcing the management competence of the governing bodies to enable banks to effectively address the

digitalization process: As a supervisory authority, the ECB wants to ensure that RBI has sound strategies and

appropriate regulations in place to meet the challenges that digitalization presents. Effective digital transformation

strategies and governance regulations can help RBI make its business models more resilient and sustainable.

· Strengthening the banks’ resilience to direct macrofinancial and geopolitical shocks: In the current uncertain

environment, it is essential for all banks that are under Single Supervisory Mechanism (SSM) supervision to remain

resilient to external shocks. This means that they can withstand unexpected events, such as economic downturns or

geopolitical crises, without jeopardizing their business operations. For this reason, the ECB wants to ensure that the

European banks remedy weak points in their credit risk management frameworks, in order to strengthen their

resilience against a possible asset quality deterioration, and quickly identify and mitigate risks. Sound planning and

diversified funding sources can help ensure the European financial market maintains reliable access to funding.

· Intensified efforts to combat climate change: The risks associated with climate change are changing rapidly with

far-reaching economic consequences, among other things. The ECB believes that European banks need to take

measures to mitigate these risks and have a role to play in funding the transition to a more sustainable economy. It

also considers that banks can only mitigate their risk exposure by taking appropriate consideration of climate and

environmental factors in their strategies, risk management practices and decision-making processes.

New regulation in 2023

Finalization of Basel III (CRR III/CRD VI)

In June 2023, agreement was reached on the cornerstones in the trilogue negotiations held between the European Council, the

European Parliament, and the European Commission. In the second half of 2023, the legislative bodies concentrated on

reaching agreement in the technical trilogues, followed by the approval in the EU Parliament and the EU Council plenary

session. The published consolidated texts of the political agreement reached on CRR III and CRD VI are expected to be voted on

in the plenary session of the European Parliament by the end of the first quarter of 2024. Despite efforts made by the

European Banking Industry Committee (EBIC) to postpone the Basel III implementation date in the EU, due to the comprehensive

changes brought about by the Capital Requirements Regulation (CRR III), the effective date of 1 January 2025, remains

unchanged.

RBI AG as a universal bank is affected by the proposed changes in various respects and makes substantial efforts to analyze

and evaluate the new and updated requirements and their resulting impact. Through its intensive efforts at national and EU-

level, RBI has clearly communicated its position on topics of particular interest. Among others, minority interest deductions, the

treatment of equity holdings made pursuant to Legislative Programmes to promote specified sectors of the economy,

retaining a 100 per cent risk-weighting for equity exposures that have been held for six years and applying a preferential

treatment for intragroup exposures were addressed. RBI regularly analyzes the updated requirements and corresponding

impact assessments for the standardized approach (STA) and the internal ratings-based approach (IRB). This allows it to

prepare adequately for the implementation of the new requirements and assess the various changes affecting RWA

calculations. This is to ensure a smooth transition to the new provisions and allows RBI to update its systems and adapt to the

new calculation and reporting requirements.

8Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Payment Services Directive and framework for financial data access

The European Commission is working on creating an efficient and integrated market for payment services in the EU. As a

result, two packages of measures were proposed:

The first involves a revision of the Payment Services Directive. This proposal aims to extend and modernize the current

Payment Services Directive (PSD2), which will become PSD3, and also to introduce a Payment Services Regulation (PSR). The

proposed regulation determines standardized requirements for the provision of payment services and e-money services within

the EU, with the objective of combating and curbing fraud in payment services, strengthening consumer rights, further aligning

the competitive conditions between banks and non-banks, and improving the operation of open banking services.

Second, the Commission is putting forward a legislative proposal for a framework for financial data access. This framework

will establish clear rights and obligations for exchanging customer data in the financial sector beyond payment accounts. In

practice, this will lead to more innovative financial products and services for users and stimulate competition in the financial

sector. By contributing actively in this regulation, RBI could be remunerated accordingly for introducing application

programming interfaces (APIs) that were developed as part of the program for financial data exchanges.

Finally, the legislators agreed in the Commission’s proposal to make instant payments in euro available for all citizens and

companies in the EU. This regulation aims to ensure that instant payments in euro are made affordable and secure, and can be

easily processed in the entire EU. Instant payments in euro allow money to be transferred at all times within seconds. As a

result of the new regulations, they will become the new normal for transfers. They should make life simpler for EU citizens,

improve businesses' cash flows and bring savings for retailers. This will encourage new innovation opportunities for banks.

Retail investment strategy

On 24 May 2023, the European Commission put forward the retail investment strategy, which aims to promote greater retail

investor participation on the capital markets. The European Commission suggested changes to current legislation (e.g. making

product information more comparable or easier to understand) to reach the objective of deepening the capital markets union.

Digital Operational Resilience Act (DORA)

DORA entered into force on 16 January 2023 and will apply from 17 January 2025. The aim is to improve the digital operational

stability of financial corporations throughout the EU and further harmonize the requirements for this. This regulatory

framework covers core areas, such as risk management, incident management and reporting, reviewing the digital operational

stability and the management of information and communication technology (ICT) third-party risks. DORA mandates the

European Supervisory Authorities to jointly develop 13 policy instruments, presented in two batches. The first batch of technical

standards was introduced in June 2023. The objective of the technical standards is to create consistent and detailed

requirements in ICT risk management, reporting of major ICT-related incidents and ICT risk management for third parties. RBI is

directly impacted by DORA and its technical standards, and is working intensively on implementing all the applicable

requirements.

Markets in Crypto Assets Regulation (MiCA)

MiCA entered into force in June 2023. It lays down standard market rules for crypto assets in the EU and is therefore the first

comprehensive framework for regulating the crypto currency market. The regulation covers crypto assets that are currently

not governed by existing EU financial services legislation (MiFiD II). The objective of the MiCA regulation is to protect investors,

prevent crypto asset misuse, ensure financial stability, create regulatory clarity and protect against market abuse and

manipulation. The regulation comprises a significant number of technical standards and guidelines that have to be developed

before the new regulation comes into force (within a period of 12 to 18 months depending on the mandate). The European

Supervisory Authorities (ESAs) are working as a matter of high priority on providing three batches of technical standards to

further break down the requirements. RBI is closely observing and analyzing all the related developments, and working on

potential applications.

Group management report9

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Minimum requirements for own funds and eligible liabilities (MREL)

The Single Resolution Mechanism Regulation II (SRMR II) introduced the concept of the Maximum Distributable Amount related

to MREL (M-MDA), which has been applicable since 1 January 2022. M-MDA allows the Single Resolution Board (SRB) to set

restrictions on distributions for banks. While M-MDA has many similarities to the classic MDA regime of Article 141 CRD, it is

subject to the discretionary decision of the resolution authority.

Regulation (EU) 2022/2036 (CRR Quick Fix) was formally adopted on 19 October 2022. It introduced changes to the CRR and Bank

Recovery and Resolution Directive (BRRD) applying to the calibration of the MREL requirements for banking groups with a

multiple point of entry (MPE) resolution strategy and a methodology for indirect subscription of MREL instruments. The SRB

published the updated MREL on 15 May 2023.

In line with RBI’s MPE resolution strategy, it must be possible to process each resolution unit separately, without impairing the

resolution capability of other resolution groups. To achieve this objective, each resolution group aims to maintain the

necessary MREL capacity and be separable, in order to ensure that the MPE approach is feasible and credible.

The MREL planning is an integral part of the budgeting process for RBI and its subsidiaries in the EU. The individual MREL

capacities in the resolution groups are closely monitored. RBI and its subsidiaries in the EU conducted issues in order to fulfill

their respective MREL requirements. Binding and final MREL requirements will apply within the Banking Union from 1 January

2024.

RBI was able to cover a significant portion of its MREL requirements by issuing green and sustainable bonds.

Crisis management and deposit insurance (CMDI) framework

The EU Commission proposed an extensive review of the CMDI framework for banks. This review covers various directives and

regulations, including the Deposit Guarantee Schemes Directive (DGSD), the Bank Recovery and Resolution Directive (BRRD), the

Single Resolution Mechanism Regulation (SRMR) and the Daisy Chain Regulation. These proposals will focus mainly on extending

the resolution system to SME banks and facilitate the use of national deposit insurance funds for resolution purposes,

especially for smaller banks. It is currently envisaged that the EU Parliament and the EU Council will reach a joint decision on

the Commission proposal in May 2024.

Regulatory environment for ESG disclosures in the EU

The European Green Deal was at the very top of the political agenda and the European Commission’s initiatives for 2023. This

reaffirms the EU’s commitment to be at the forefront of sustainability efforts with ambitious environmental laws and the goal

of being climate neutral by 2050. The funding of this transition will be crucially important in the coming years. The EU

taxonomy and the Green Bond Standard are the most relevant sustainable financial instruments. In June 2023, the EU

Commission adopted further EU taxonomy criteria for economic activities that make a significant contribution to biodiversity,

environmental pollution and the circular economy. The inclusion of more economic activities and sectors will increase the

usability and potential of the EU taxonomy in scaling up sustainable investment in the EU. RBI will disclose its first taxonomy

alignment ratios from January 2024 onwards.

The legislator will use the EU Corporate Sustainability Reporting Directive (CSRD), which was completed at the end of 2022, to

rank the importance of ESG information equally with that of a company’s financial data. This will be substantiated by the

European Sustainability Reporting Standards (ESRS) that were developed by the European Financial Reporting Advisory Group

(EFRAG). The standards serve to limit the burden on reporting companies, while at the same time enabling them to verify the

efforts they are making to meet the green deal agenda, and accordingly get access to sustainable finance. The new CSRD

follows a double materiality concept. This means that companies must consider how sustainability aspects impact a

company’s economic situation on the one hand and how a company’s operations impact sustainability aspects on the other.

10Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Significant events in the

reporting period

RBI has decided to acquire shares in STRABAG SE

In December 2023 RBI has taken a decision to acquire 28,500,000 shares in STRABAG SE, representing 27.78 per cent of

outstanding shares, via its Russian subsidiary AO Raiffeisenbank from Russian based MKAO Rasperia Trading Limited for a cash

consideration of € 1,510 million (including dividend entitlements for 2021 and 2022). Closing of the acquisition is subject to

various conditions precedent including satisfactory completion of the sanctions compliance due diligence by RBI, regulatory

approvals, and merger clearance.

Upon the successful closing of the acquisition, AO Raiffeisenbank intends to transfer the shares in STRABAG SE to RBI by issuing

a dividend in kind. The approval of the dividend in kind by the competent Russian authorities is also a condition precedent for

the acquisition of the shares in STRABAG SE by AO Raiffeisenbank.

The impact on RBI consolidated CET1 ratio (16.5 per cent proforma including profits as of 31 December 2023) is expected to be c.

minus 10 basis points at closing, while the CET1 ratio of RBI Group excluding Russia will increase by around 125 basis points

(Price/Book zero deconsolidation scenario: 14.4 per cent proforma including profits as of 31 December 2023).

The acquisition of the shares in STRABAG SE and distribution of the dividend in kind, subject to regulatory approvals and

satisfaction of other conditions precedent, are expected to close in the first quarter of 2024. After closing, RBI will retain the

shares in STRABAG SE as a long-term equity participation which will be contributed to and managed by its fully consolidated

subsidiary GABARTS Beteiligungs GmbH & Co KG.

With this transaction, RBI further reduces its exposure to Russia.

Russia and Belarus

In 2023, RBI continued to work on a spin-off or sale of AO Raiffeisenbank. Both alternatives require numerous approvals from

various Russian and European authorities, and from the respective central banks. In the meantime, business activities in Russia

will be further reduced. After the war broke out, the loan business has been scaled back significantly, and the loan volume has

since fallen 43 per cent. In addition, the clearing, settlement and payment services business has been considerably reduced.

This is reflected in the decline in net fee and commission income, which fell 43 per cent year-on-year.

RBI continues to assess strategic options for the future of Priorbank in Belarus.

Dividend

On 21 November 2023, the Extraordinary General Meeting resolved to distribute a dividend of € 0.80 for each share that was

entitled to a dividend for the 2022 financial year.

The Board of Management will propose the distribution of a dividend of € 1.25 per share to the Annual General Meeting on

4 April 2024. Based on the shares issued, this would result in a maximum amount of € 411 million.

Group management report11

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Earnings and financial

performance

Due to the positive interest rate environment, RBI can look back on a successful business development in 2023. On the other

hand, the financial year continued to be characterized by high inflationary pressure, a weak economy, low growth and, in some

cases, tense labor markets. Nevertheless, RBI generated consolidated profit of € 2,386 million in this environment. If the

earnings contributions from Russia and Belarus are excluded, this would result in a consolidated profit of € 997 million and thus

an increase of 1 per cent compared to 2022 (excluding the proceeds of € 453 million realized at the time from the disposals of

the Bulgarian Group units).

The ECB continued its cycle of interest rate hikes of 200 basis points in 2023 into the summer. Key interest rates in the countries

of Central and Eastern Europe also remained at a high level for most of the year, resulting in a significant increase in

profitability thanks to higher interest margins. Net interest income increased € 631 million to € 5,683 million. The interest

margin reached 2.87 per cent in the reporting period, versus 2.59 per cent in the comparable period. Net fee and commission

income stabilized at a high level; the decline of € 837 million was entirely attributable to Russia (down € 856 million), both due

to active restrictions on activities and the currency devaluation. RBI’s core revenues (net interest income and net fee and

commission income) were down € 206 million or 2 per cent to € 8,725 million; excluding Russia and Belarus, however, there

would have been an increase of € 868 million.

High core revenues compensated for additional bank taxation in certain countries, rising operating costs due to inflation and,

in some cases, higher refinancing costs from an increasing proportion of time deposits and more expensive MREL funding.

General administrative expenses rose € 355 million year-on-year to € 3,908 million, primarily as a result of increases at head

office and in Hungary, Romania and Russia. This was primarily due to the persistently high inflation rate, but also additional

investments in many areas. The increased cost burden contributed to the deterioration of the cost/income ratio by 6.5

percentage points to 43.1 per cent.

The devaluations of the average exchange rates of the Russian ruble by 21 per cent and the Ukrainian hryvnia by 14 per cent

also had a negative effect on the consolidated profit.

Risk costs of € 393 million, which were well below the previous year’s figure (€ 949 million), were mainly recorded in the Eastern

Europe region (€ 191 million, with Russia and Ukraine accounting for € 95 million and € 94 million respectively) and at head

office (€ 138 million). A negative factor was the € 368 million increase to € 873 million in expenses for credit-linked litigation and

annulments of loan agreements in Poland. The consolidated profit should also be appreciated in view of this burden.

Total assets fell approximately € 9 billion or 4.3 per cent to € 198 billion since the start of the year. Currency effects were

responsible for a 2.6 per cent fall. On a currency-adjusted basis, customer business was stable overall; the decline of € 4 billion

is primarily attributable to Russia. Lending volumes in Russia have been actively reduced since the start of the Russian war of

aggression against Ukraine. The decline since the beginning of 2023 - exacerbated by the devaluation of the Russian ruble -

amounted to € 3 billion.

12Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Comparison of results with the previous year


in € million	2023	2022	Change
Net interest income	5,683	5,053	631	12.5%
Dividend income	35	64	(29)	(44.8)%
Current income from investments in associates	85	64	21	32.5%
Net fee and commission income	3,042	3,878	(837)	(21.6)%
Net trading income and fair value result	186	663	(477)	(71.9)%
Net gains/losses from hedge accounting	(28)	(41)	13	(32.3)%
Sundry operating income	62	29	33	115.1%
Operating income	9,065	9,710	(645)	(6.6)%
Staff expenses	(2,209)	(2,010)	(199)	9.9%
Other administrative expenses	(1,224)	(1,081)	(143)	13.2%
Depreciation	(475)	(461)	(14)	3.0%
General administrative expenses	(3,908)	(3,552)	(355)	10.0%
Operating result	5,158	6,158	(1,000)	(16.2)%
Other result	(906)	(667)	(238)	35.7%
Governmental measures and compulsory contributions	(284)	(337)	54	(16.0)%
Impairment losses on financial assets	(393)	(949)	557	(58.6)%
Profit/loss before tax	3,576	4,203	(628)	(14.9)%
Income taxes	(997)	(859)	(138)	16.1%
Profit/loss after tax from continuing operations	2,578	3,344	(766)	(22.9)%
Gains/losses from discontinued operations	0	453	(453)	–
Profit/loss after tax	2,578	3,797	(1,219)	(32.1)%
Profit attributable to non-controlling interests	(192)	(170)	(22)	12.9%
Consolidated profit/loss	2,386	3,627	(1,241)	(34.2)%

Operating income

The € 631 million increase in net interest income to € 5,683

million was largely driven by interest rates. Due to the liquidity

position in the reporting period, rising market interest rates in

numerous Group countries led to a sharper increase in interest

income than in interest expense. The increases amounted to

€ 169 million in Hungary, € 90 million in Romania, € 83 million in

Slovakia, € 64 million in Croatia and € 42 million in Albania.

Raiffeisen Bausparkasse Österreich Gesellschaft m.b.H

reported an increase of € 42 million due to upward repricing of

variable-rate loans and increased interest income from

derivatives. In Serbia, net interest income rose € 124 million as a

result of higher interest income from loans for non-financial

corporations and households and also partly due to the

integration of Crédit Agricole Srbija AD (on 1 April 2022).

Volume-related higher interest income from government

certificates of deposit, from money market transactions and

from government bonds led to an increase of € 43 million in

net interest income in Ukraine. Net interest income in Russia, on

the other hand, fell € 116 million, due to a partially currency-

related 34 per cent decline in loan volume. In Belarus, net

interest income fell € 36 million due to falling market interest

rates and the resulting lower margins. Net interest income also fell € 10 million in the Czech Republic, as increasing interest

expenses for customer deposits from households and for newly issued MREL-eligible debt securities significantly exceeded the

increase in interest income from repo business and customer loans.

The group’s average interest-bearing assets increased 2 per cent year-on-year. The net interest margin improved 28 basis

points to 2.87 per cent, with the largest increases of 192 basis points in Serbia, 144 basis points in Albania and 109 basis points

in Hungary.

Overall, net fee and commission income fell € 837 million to € 3,042 million. Net fee and commission income decreased due to

the currency devaluations in Eastern Europe and continued to be influenced by the geopolitical situation. Russia reported the

strongest decline of € 856 million, while the other countries of the Group remained stable. The result from foreign exchange

business was down € 627 million, primarily in spot foreign exchange business in Russia and at head office. In Russia, this

development was influenced by decreased volumes caused by the introduction of internal transaction limits as well as lower

margins in corporate customer and retail business, at head office the fall in business was likewise margin-related. Due to lower

fees, net income from the securities business also fell € 93 million, mainly in Russia. Net income from clearing, settlement and

Group management report13

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

$NII_en.jpg$

payment services decreased € 77 million as a result of lower volumes, primarily in Russia. Net income from loan and guarantee

business also fell € 32 million, most notably in Russia and at head office.

Net trading income and fair value result declined € 477 million to € 186 million. The year-on-year decline was mainly due to a

decrease of € 234 million in net trading income in Russia. Russian restrictions imposed on foreign currency transactions in 2022

led to a massive increase in foreign currency business in the previous year’s period. The introduction of internal transaction

limits in the reporting period led to a fall in transactions and a corresponding reduction in the trader margin. In certificates

business at head office, the sharp increase in the Group’s own credit spread resulted in the previous year in large valuation

gains on certificate issues measured at fair value. Conversely, the Group’s own credit spread narrowed by around 35 basis

points in the reporting year, resulting in a € 108 million year-on-year reduction in the valuation result. Higher currency-related

valuation losses of minus € 95 million were mainly recorded in Hungary, Ukraine and Belarus.

Other net operating income increased € 33 million to € 62 million. In the reporting period, net income from debt securities

showed a € 31 million smaller loss of € 25 million. The loss in the reporting period was mainly attributable to Hungary, whereas

in the previous year it mainly related to Russia. The derecognition of intangible assets at head office resulted in a loss of € 29

million in the previous year. An amount of € 48 million was allocated to other provisions in the reporting period for pending

litigation in Russia and Austria, whereas in the previous year there were reversals of € 14 million, mainly in Romania and at head

office. Charges for non-banking activities and operating leases on property resulted in higher income in the reporting period.

General administrative expenses

General administrative expenses were up 10 per cent or

€ 355 million year-on year to € 3,908 million. Staff expenses

rose € 199 million to € 2,209 million, mainly at head office (up

€ 57 million) and in Russia (up € 48 million). The increase at

head office was primarily attributable to salary adjustments

under collective agreements and to an increase in the

headcount. In Russia, the increase resulted from higher

salaries and social security costs, provisions for one-off

payments and an increase in the headcount, notably in IT.

Staff expenses also increased in Hungary (up € 23 million),

Slovakia (up € 20 million) and Romania (up € 15 million). The

main drivers of the € 143 million rise in other administrative

expenses were higher legal, advisory and consulting

expenses (up € 44 million) and increased IT expenses (up

€ 37 million) at head office. There were further increases in

other administrative expenses in Hungary (up € 27 million),

Poland (up € 17 million) and Romania (up € 13 million).

Depreciation and amortization of tangible and intangible

fixed assets increased 3 per cent or € 14 million to € 475

million. The cost/income ratio increased year-on-year from

36.6 per cent to 43.1 per cent, primarily due to the decline in

profit in Russia and to increased general administrative

expenses.

The number of business outlets fell 145 year-on-year to 1,519. The largest decline resulted from the war in Ukraine (down 65),

followed by Serbia due to consolidations following the merger (down 46), and Belarus (down 13). The average headcount

increased 245 full-time equivalents year-on-year to 44,439, mainly in Russia (up 522) and at head office (up 195). There was a

significant decrease in Ukraine (down 891).

14Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Other result

The other result amounted to minus € 906 million in the reporting period, compared to minus € 667 million in the comparable

period. Expenses for credit-linked, portfolio-based litigation and annulments had a negative effect of € 878 million (previous

year’s period: € 510 million). These mainly related to mortgage loans in Poland denominated in or linked to a foreign currency.

The increase in Poland of € 368 million primarily resulted from a decision by the European Court of Justice in June, leading to

significantly increased actual and expected legal cases, higher loss rates, and losses due to cancellations of credit agreements.

In contrast, valuation of investments in subsidiaries and associates led to a gain of € 21 million in the reporting period, mainly

relating to the investments in LEIPNIK-LUNDENBURGER INVEST Beteiligungs AG and Oesterreichische Kontrollbank AG. In the

previous year’s period, impairment losses of € 37 million were recognized on investments in associates and € 30 million on

investments in subsidiaries.

Governmental measures and compulsory contributions

Governmental measures and compulsory contributions decreased € 54 million to € 284 million. Contributions to the bank

resolution fund fell € 15 million, mostly at head office. The € 21 million decrease in deposit insurance fees mainly related to

Russia, Hungary, Slovakia and Romania. No other compulsory contributions were incurred in the reporting period, whereas this

item in the previous year included € 26 million in contributions to the state support fund for distressed borrowers in Poland. In

contrast, bank levies increased € 8 million, mainly in Hungary (up € 31 million). The bank levy at head office was down € 21

million.

Impairment losses on financial assets

At € 393 million, impairment losses on financial assets were significantly lower in the reporting period than the figure of € 949

million in the comparable period. Risk provisions in Eastern Europe accounted for the largest share at € 191 million (previous

year’s period: € 743 million) due to the ongoing Russian war of aggression in Ukraine and related risk factors. Of this, € 95

million (previous year’s period: € 471 million) related to Russia and € 94 million (previous year’s period: € 253 million) to Ukraine.

Risk provisions at head office reached € 138 million (previous year’s period: € 149 million), primarily for non-financial

corporations in connection with real estate loans.

For defaulted loans (Stage 3), net impairments of € 389 million were recognized in the reporting period (previous year’s period:

net € 382 million), of which € 191 million related to non-financial corporations and € 135 million to households. At country level,

the Stage 3 impairment losses were primarily incurred by head office (€ 230 million) and Russia (€ 53 million). In Stage 1 and

Stage 2, net impairment losses of € 4 million were recognized in the reporting period (previous year’s period: € 567 million, of

which € 298 million in Russia and € 87 million in Ukraine).

The NPE ratio rose 0.3 percentage points to 1.9 per cent due to loan defaults at head office. The NPE coverage ratio was 51.7

per cent at the reporting date, compared to 59.0 per cent in the previous year.

Income taxes

The € 138 million increase in income taxes to € 997 million was primarily due to Ukraine, which accounted for €108 million. This

mainly relates to a windfall tax and a significant increase in profit. Significant increases in profit led to higher tax expense in

most countries, for example with increases of € 31 million in Romania, € 19 million each in Serbia and Slovakia, € 17 million in

Croatia, and € 11 million in Hungary. In the Czech Republic, on the other hand, profit was down, and the higher tax expense of

€ 9 million was due to a windfall tax in the amount of € 26 million. In Russia, income taxes of € 464 million were € 95 million

lower than in the comparable period. This was due to the sharp fall in profit of € 811 million and the resulting lower tax burden,

which was partly offset by a windfall tax in the amount of € 47 million.

RBI’s effective tax rate rose 7.5 percentage points year-on-year to 27.9 per cent, mainly due to the non-tax-deductible

expenses for credit-linked litigation and for annulments of loan agreements in Poland in the amount of € 873 million (previous

year’s period: € 505 million) and to the newly introduced windfall taxes in Russia, the Czech Republic and Ukraine.

Gains/losses from discontinued operations

The gains/losses from discontinued operations in the previous year’s period included the deconsolidation of the Bulgarian

Group units.

Group management report15

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Comparison of results with the previous quarter

Quarterly results


in € million	Q4/2022	Q1/2023	Q2/2023	Q3/2023	Q4/2023	Change
Net interest income	1,462	1,385	1,364	1,441	1,494	52	3.6%
Dividend income	24	11	7	10	8	(2)	(17.9)%
Current income from investments in associates	8	30	21	21	13	(7)	(36.2)%
Net fee and commission income	1,196	966	732	667	677	10	1.6%
Net trading income and fair value result	192	86	30	89	(19)	(108)	–
Net gains/losses from hedge accounting	(20)	(10)	(7)	5	(16)	(21)	–
Other net operating income	(1)	(9)	51	15	5	(10)	(66.8)%
Operating income	2,861	2,459	2,197	2,247	2,162	(86)	(3.8)%
Staff expenses	(578)	(562)	(606)	(491)	(548)	(57)	11.6%
Other administrative expenses	(278)	(277)	(323)	(271)	(354)	(83)	30.4%
Depreciation	(123)	(111)	(116)	(116)	(132)	(17)	14.3%
General administrative expenses	(978)	(950)	(1,045)	(878)	(1,034)	(156)	17.8%
Operating result	1,882	1,509	1,152	1,369	1,128	(242)	(17.6)%
Other result	(442)	(96)	(354)	(138)	(317)	(178)	128.8%
Governmental measures and compulsory contributions	(52)	(236)	(2)	(22)	(24)	(2)	9.8%
Impairment losses on financial assets	(228)	(301)	42	8	(142)	(150)	–
Profit/loss before tax	1,160	877	838	1,216	645	(572)	(47.0)%
Income taxes	(270)	(176)	(211)	(269)	(341)	(72)	26.7%
Profit/loss after tax from continuing operations	890	700	627	947	304	(644)	(67.9)%
Gains/losses from discontinued operations	0	0	0	0	0	0	–
Profit/loss after tax	890	700	627	947	304	(644)	(67.9)%
Profit attributable to non-controlling interests	(64)	(43)	(49)	(68)	(32)	37	(53.7)%
Consolidated profit/loss	826	657	578	879	272	(607)	(69.0)%

Development of the fourth quarter of 2023 compared to the third quarter of

2023

Net interest income rose € 52 million to € 1,494 million. Russia reported the largest increase of € 52 million, mainly due to a

partly currency-related rise in interest income from loans to banks. In Slovakia, net interest income rose € 8 million due to

higher market interest rates for loans to non-financial corporations and households. In the Czech Republic, higher interest

income from government bonds and lower interest expenses for derivatives led to an increase in net interest income of € 7

million. In Hungary, net interest income increased € 6 million, mainly due to higher net income from derivatives and interest rate

swaps. The net interest margin increased 10 basis points to 3.06 per cent, which was primarily due to Russia

Net fee and commission income increased 2 per cent, or € 10 million, to € 677 million. Net income from clearing, settlement and

payment services improved € 5 million, primarily in Romania and the Czech Republic. Net income from customer resources

distributed but not managed also increased € 5 million due to higher income and transactions, particularly in the Czech

Republic and Romania.

Net trading income and fair value result decreased € 108 million to minus € 19 million. A significant portion of the decrease

occurred at head office, which posted a decline of € 67 million that was concentrated in interest rate derivatives and foreign

currency positions. In addition, Russia also recorded a decline of € 33 million, primarily due to volatility in the Russian ruble.

Raiffeisen Bausparkasse Gesellschaft m.b.H. also posted a lower valuation result of € 21 million. This was mainly driven by

negative valuation effects among interest rate derivatives.

Other net operating income came in at € 5 million in the second quarter, below the third-quarter level of € 15 million. Net

income from insurance contracts was € 15 million lower in the fourth quarter, mainly in connection with the change to IFRS 17 in

Croatia.

General administrative expenses were up € 156 million quarter-on-quarter to € 1,034 million. Staff expenses increased € 57

million to € 548 million; other administrative expenses rose € 83 million to € 354 million; and depreciation increased € 17 million

to € 132 million. The main drivers of the increase in the fourth quarter were higher staff expenses in Russia (increase: € 20

million), higher other administrative expenses in Romania (increase: € 20 million) and Russia (increase: € 18 million) and higher IT

expenses at head office (increase: € 13 million).

16Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

The other result decreased € 178 million to minus € 317 million. This was mostly driven by expenses for credit-linked, portfolio-

based litigation and annulments, which totaled € 273 million in the fourth quarter of 2023 after reaching € 176 million in the

third quarter of 2023. They mainly related to the mortgage loan portfolio in Poland. The valuation of investments in associates

resulted in reversals of impairment losses of € 16 million in the fourth quarter that were mainly related to Oesterreichische

Kontrollbank AG. This was set against an impairment loss of € 19 million on shares in subsidiaries.

Impairment losses on financial assets amounted to € 142 million in the fourth quarter after booking net releases of € 8 million

in the third quarter. In the fourth quarter, net provisioning for impairment losses at head office of € 132 million (due to defaults

at non-financial corporations) was offset by net releases of € 52 million in Russia. In the third quarter, the releases of loan loss

provisions mainly affected Russia, with this effect being primarily due to the reduction of the customer portfolio that is subject

to sanctions.

The € 72 million increase in income taxes is mainly due to windfall tax in Ukraine and the Czech Republic.

Statement of financial position

Total assets have decreased by around € 9 billion or 4.3 per cent since the beginning of the year, with currency effects being

responsible for a decline of 2.6 per cent. The devaluation of the Russian ruble (down 22 per cent), the Belarusian ruble (down 18

per cent) and the US dollar (down 3 per cent) was set against the appreciation of the Hungarian forint (up 5 per cent) and the

Swiss franc (up 6 per cent).

Assets


in € million	31/12/2022	31/3/2023	30/6/2023	30/9/2023	31/12/2023	Change year-to- date		Change previous quarter
Loans to banks	15,716	17,442	17,358	15,716	14,714	(1,003)	(6.4)%	(1,003)	(6.4)%
Loans to customers	103,230	105,336	101,806	101,931	99,434	(3,796)	(3.7)%	(2,498)	(2.5)%
hereof non-financial corporations	48,829	48,939	48,296	47,713	47,049	(1,780)	(3.6)%	(664)	(1.4)%
hereof households	40,867	40,806	40,525	39,848	39,674	(1,193)	(2.9)%	(174)	(0.4)%
Securities	23,711	26,281	28,236	30,803	31,108	7,397	31.2%	305	1.0%
Cash and other assets	64,401	61,919	58,723	55,724	52,986	(11,415)	(17.7)%	(2,738)	(4.9)%
Total	207,057	210,977	206,123	204,175	198,241	(8,817)	(4.3)%	(5,934)	(2.9)%

Loans to banks decreased € 935 million due to loan repayments mainly at head office and € 455 million in the Czech Republic

due to a decline in repo transactions, while an increase of € 431 million was recorded in Serbia due to repo transactions.

Loans to customer decreased by a total of € 3,796 million. The loan volume in Russia has been scaled back significantly since

the beginning of the Russian war of aggression in Ukraine. It declined another € 3,014 million in total to € 5,973 million during

the financial year, with the decline concentrated in unsecured loans, mortgage loans to households, working capital finance

and fixed-term loans to non-financial corporations. However, the decline was mainly driven by the depreciation of the Russian

ruble. Head office recorded a net decrease of € 1,411 million to € 26,382 million, half of which was attributable to repayments of

loans to other financial corporations of € 809 million. In addition, both regular repayments and early repayments led to a € 764

million decrease in loans to non-financial corporations. In Slovakia, receivables increased € 371 million, mainly due to loans to

households and non-financial corporations. In Romania, growth amounted to € 349 million, or 4 per cent, for non-financial

corporations and other financial corporations, while growth in Croatia was € 293 million, or 9 per cent, mainly driven by loans to

households and non-financial corporations. In the Czech Republic, an increase of € 257 million, or 1 per cent, was achieved

mainly through project finance loans to non-financial corporations and consumer loans to households.

The increase in securities was primarily attributable to investments – especially in government bonds – at head office (up

€ 2,619 million, including trading securities), in the Czech Republic (up € 2,210 million), Hungary (up € 993 million), Ukraine (up:

€ 636 million) and Slovakia (up € 558 million).

The decline in cash balances of € 10,449 million was primarily due to a reduction at head office of € 9,797 million, mainly due to

a reduction in central bank balances, while the increase in repo transactions partially offset this decline. Russia recorded a

€ 2,471 million fall in cash balances, primarily in overnight interbank placements. Slovakia posted a decline of € 456 million, with

surplus cash being used for customer loans and investment loans. The market values of derivatives reported under other

assets, primarily interest rate derivatives, declined € 1,831 million at head office.

Group management report17

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Equity and liabilities


in € million	31/12/2022	31/3/2023	30/6/2023	30/9/2023	31/12/2023	Change year-to- date		Change previous quarter
Deposits from banks	33,641	35,005	33,681	29,298	26,144	(7,496)	(22.3)%	(3,154)	(10.8)%
Deposits from customers	125,099	124,776	120,553	121,233	119,353	(5,746)	(4.6)%	(1,880)	(1.6)%
hereof non-financial corporations	50,042	49,850	45,827	45,813	45,084	(4,958)	(9.9)%	(729)	(1.6)%
hereof households	58,876	59,234	58,427	57,520	58,453	(423)	(0.7)%	932	1.6%
Debt securities issued and other liabilities	29,554	31,971	32,561	33,792	32,894	3,340	11.3%	(898)	(2.7)%
Equity	18,764	19,225	19,329	19,851	19,849	1,085	5.8%	(2)	—%
Total	207,057	210,977	206,123	204,175	198,241	(8,817)	(4.3)%	(5,934)	(2.9)%

The € 7,496 million or 22 per cent decrease in deposits from banks was mainly due to the redemption of TLTRO instruments

and lower short-term deposits at head office (€ 8,394 million) as well as the redemption of TLTRO instruments in Slovakia

(€ 775 million), which were offset by an increase in the Czech Republic (€ 529 million) due to repo transactions.

The € 5,746 million reduction in deposits from customers compared to the end of the year was largely due to a reduction in

short-term deposits from households and non-financial corporations in Russia, which were down € 5,537 million, largely as a

result of currency effects. The decline in local currency was much smaller (8 per cent). The decrease in deposits of € 3,276

million at head office was mainly due to lower time deposits, in particular from Austrian and German non-financial

corporations (total: € 3,160 million). In contrast, the Czech Republic recorded an increase of € 1,197 million, or 5 per cent,

attributable to the rise in repo transactions with governments and short-term deposits mainly from households.

Debt securities issued rose € 4,377 million. In the reporting period, a € 1.0 billion senior preferred bond, two mortgage-backed

bonds, each with a nominal value of € 500 million, and a € 500 million senior non-preferred benchmark bond were issued at

head office. MREL-eligible bonds were issued in the Czech Republic (€ 300 million), in Romania (€ 300 million) and in Slovakia

(€ 500 million), including covered bonds in the latter case. The negative market values of derivatives reported under other

liabilities, primarily interest rate derivatives at head office, declined € 1,308 million.

For information relating to funding, please refer to note (44) Liquidity management in the risk report section of the

consolidated financial statements.

Liquidity and funding

With its solid liquidity position and established processes for managing liquidity risk, RBI demonstrates its high adaptability

even in times of crisis. In addition, separate monitoring of RBI's liquidity risk position excluding Russian subsidiaries was

introduced in 2023. This shows that RBI's liquidity risk position remains within the target values even without the Russian

business. The liquidity coverage ratio was 189 per cent as at 31 December 2023 (31 December 2022: 202 per cent) compared to a

regulatory limit of 100 per cent, while the net stable funding ratio (NSFR) was 141 per cent (31 December 2022: 135 per cent).

Group funding is derived from a strong base of customer deposits – primarily retail business in Central and Southeastern

Europe – and is supplemented by wholesale funding, mainly through RBI AG and the subsidiary banks. In addition to funding

from the regional Raiffeisen banks, financing loans from third parties and interbank loans with third-party banks are also used.

The loan/deposit ratio amounted to 83.8 per cent as at 31 December 2023 (31 December 2022: 82.4 per cent).

18Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Equity on the statement of financial position

Equity including non-controlling interests rose € 1,085 million from the start of the year to € 19,849 million.

Total comprehensive income of € 1,518 million comprised profit after tax of € 2,578 million and other comprehensive income of

minus € 1,060 million. The currency movements in particular had a negative impact of minus € 1,168 million on other

comprehensive income.

The 22 per cent devaluation of the Russian ruble contributed negatively with € 989 million, while the 18 per cent devaluation of

the Belarusian ruble contributed € 95 million and the 2 per cent devaluation of the Czech koruna contributed € 71 million to the

negative currency impact.

On the other hand, there were positive effects from fair value changes of equity instruments and financial assets amounting

to € 71 million, as well as from hedging of net investments, primarily in the Russian ruble (€ 21 million) and the Czech koruna

(€ 17 million), which resulted in a positive valuation result of € 37 million.

Total capital pursuant to the CRR/Austrian Banking

Act (BWG)

Common equity tier 1 (CET1) after deductions amounted to € 16,203 million, representing an increase of € 560 million compared

to the 2022 year-end figure. The main driver of the increase was the net profit for the current financial year.

Tier 1 capital after deductions increased € 562 million to € 17,881 million. The increase was primarily attributable to effects in

CET1. Tier 2 capital decreased € 96 million to € 2,287 million due to the regulatory maturing of outstanding instruments. Total

capital amounted to € 20,168 million, which represents an increase of € 466 million year-on-year.

Total risk-weighted assets (RWA) decreased by a total of € 4,016 million to € 93,664 million compared to the 2022 year-end

figure. The main drivers for the reduction in credit risk were foreign currency effects from the Russian ruble and a decrease in

the corporate and retail portfolio of € 3,684 million and € 1,437 million, respectively. The reduction was set against an increase

of € 1,392 million in credit risk for governments and central banks, primarily due to higher risk weightings. Inorganic effects,

which were primarily due to the implementation of the IRB approach at the Austrian savings and loan institution, resulted in a

decrease of € 2,370 million. The RWAs for market risk increased due to the RWA backing of investments in foreign currencies,

particularly those of the Russian subsidiary bank.

This resulted in a (transitional) CET1 ratio of 17.3 per cent, a (transitional) tier 1 ratio of 19.1 per cent and a (transitional) total

capital ratio of 21.5 per cent.

Group management report19

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Research and development

Digitalization

A central theme for banks in the advancement of digitalization is the growing relevance of mobile banking. Penetration (the

rate of active mobile banking use) reached 60 per cent in retail (though this figure varies between markets) and is above that

of local peers. The sale of E2E digital loans at group level reached 52 per cent in 2023.

With its product range for retail customers and small businesses, RBI places a strong focus on the full end-to-end digitalization

of core products (accounts, payments/cards and loans). RBI expects to achieve cost savings and additional income through this

as well as the branch network optimization.

In addition, RBI is continuing its efforts to develop more products and individual product components centrally and make them

available to all of the Group’s banks. Aside from the cost benefit, this should lead to a substantial reduction in the time

required for the full digitalization of the five most important products across the entire Group (current accounts, credit cards,

consumer loans as well as current accounts and loans for SMEs).

With the Easy Digital Investing (EDI) platform, Raiffeisenbank Czech Republic was the first large bank in the Czech Republic to

introduce a mobile investment application for retail clients at the end of 2022. At the end of 2023, around 18,000 customers

were already using the platform's services. Half of the EDI users are new-to-invest customers (i.e. customers, who have never

had an investment product with Raiffeisenbank Czech Republic), which positively confirms RBI’s ability to attract new

customers, and overall increases the penetration of investment products. EDI was developed as a standardized group solution,

hence a timely rollout in other countries is currently being planned.

Digitalization is also a key issue for corporate and institutional customers. The main challenge is to enable process streamlining

and a reduction of paper-based procedures in the interface with customers. Since the end of 2019, RBI has digitized a series of

products and services on the myRaiffeisen platform. This includes a digital KYC process (eKYC) for companies and institutional

customers, digital account opening (Group eAccount Opening), digital export finance (eSpeedtrack) as well as further services

such as eFinance, eGateway, eArchive, and the digital payment questionnaire for correspondent banking clients (ePIC). In 2022,

eTradeOn, a tool to manage guarantees online, was added to the myRaiffeisen product range.

RBI is one of the first banks in the CEE region to offer a group-wide account opening feature for international customers,

addressing one of the core needs of thesegment for region-wide services. Further products and solutions are planned to follow

in the coming years with a similar setup. Since 2019, RBI has successfully rolled out features to the network banks, achieving

more than 4,000 digitally initiated KYC cases group-wide, supported by more than 1,600 digital account opening requests and a

digitally requested lending volume of € 1.3 billion. Digital penetration of KYC processes in RBI head office is on a stable level of

>70 per cent and the majority of first account openings are requested digitally.

In response to customer needs in the FX business, RBI launched a single-bank FX platform (R-Flex) in Romania and Croatia in

2022 and in Hungary in 2023. R-Flex enables FX transactions in digital form, including real-time information and fast

settlement, both in the online and mobile versions. Compared to the previous year, the number of platform users has increased

from 4,500 to 37,000. It is planned to roll out the product to further countries in 2024.

20Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Innovation Areas

The topics of artificial intelligence (AI) and blockchain technology have been identified as strategically important fields for

further monitoring and research for the RBI in 2023.

In 2023, there was a notable surge in the adoption and utilization of AI technology, leading to the democratization of AI. To

maintain competitiveness and consistently provide top-notch solutions to clients, RBI introduced a strategic AI initiative. This

initiative aims to assess the impact of AI on RBI and explore its potential in customer-facing products. It will be implemented in

stages, encompassing employee education, awareness, and the development of innovative products and services.

Blockchain technology is another strategic field of interest for RBI due to its potential to revolutionize the financial industry.

Potential applications include fast and secure payments and transactions, improving internal processes, and enabling

tokenization of clients’ assets. A dedicated team for this topic was formed several years ago to monitor market developments

and the technology’s potential for client-facing products. In 2023, two internal projects explored the potential of asset

tokenization and institutional-grade digital asset custody, both of which will continue in 2024.

In 2023, RBI adopted its 2024-2025 Strategy Outlook, which outlines its commitment to being a data-centric company,

emphasizing data accessibility, quality, and business value. The bank streamlined operations and automated processes to

cater to the growing need for real-time services, and RBI’s operating model shifted towards client-centricity, stability, and

digitalization.

RBI’s commitment to agility was emphasized by consistently developing maturity in this area, achieving enterprise agility, and

securing a leading position in the CEE region.

IT security was bolstered through a risk-based alert system that enables a rapid response and the migration of more than

14,000 repositories to GitHub to ensure greater efficiency in source code management.

RBI attaches great importance to the introduction of cloud technology. By reaching the milestone of 50 per cent in Ukraine,

Kosovo and Albania, RBI demonstrated a leading role among banks in these regions. The transition of applications to the cloud

reached 44 per cent at head office level and 40 per cent at network banks level in 2023.

In a bid to solidify its standing as a top-tier IT employer, RBI inaugurated Raiffeisen Tech centers in Poland, Romania, and

Kosovo, creating job opportunities for global IT professionals and promoting employee development.

Group management report21

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Internal control and risk

management system in

relation to the Group

accounting process

Balanced and comprehensive financial reporting is a priority for RBI and its governing bodies. Compliance with all relevant

statutory requirements is therefore a basic prerequisite. The Management Board is responsible for establishing and defining a

suitable internal control and risk management system that encompasses the entire accounting process while adhering to

company requirements. This is embedded in the company-wide framework for the internal control system (ICS).

The ICS should ensure effective and continuously improving internal controls for accounting. The control system is designed to

comply with all relevant guidelines and regulations and to optimize conditions for specific control measures in order to prevent

any unintentional misstatements.

Control environment

The Group has an internal control system pertaining to financial reporting, which includes directives and instructions on key

issues as a central element. This includes:

· The hierarchical decision-making process for approving Group and company directives, as well as departmental and

divisional instructions,

· process descriptions for the preparation, quality control, approval, publication, implementation and monitoring of

directives, and instructions including related controls, as well as

· regulations for the revision and repeal of directives and instructions.

The senior management of each Group unit is responsible for implementing the Group-wide instructions. Compliance with

Group rules is monitored by the department Group Consolidation as well as through audits by Group and local auditors.

The consolidated financial statements are prepared by the department Group Consolidation (division Group Accounting &

Financial Methodologies), which belongs to the CFO area under the CEO. The associated responsibilities are defined for the

Group within the frame-work of a dedicated Group function.

Risk assessment

Significant risks relating to the Group accounting process are evaluated and monitored by the Management Board. Complex

accounting standards can increase the risk of errors, as can the use of differing valuation standards, particularly in relation to

the Group’s principal financial instruments. A difficult business environment can also increase the risk of significant financial

reporting errors. For the purpose of preparing the consolidated financial statements, estimates have to be made for asset and

liability items for which no market value can be reliably determined. This essentially applies to risk provisions in the lending

business, fair value and impairment of financial instruments, deferred taxes, provisions for pensions and pension-like

obligations as well as provisions for legal cases.

22Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Control measures

The preparation of financial information on an individual Group unit level is decentralized and carried out by the respective

Group unit in accordance with RBI guidelines; the calculation of parts of the impairment charges under IFRS 9 is, however,

carried out centrally. The Group unit employees and the managers responsible for accounting are required to provide a full

presentation and accurate valuation of all transactions. The local management is responsible for ensuring implementation of

mandatory internal control measures, such as the separation of functions and the principle of dual control. The reconciliation

and validation controls are embedded in the aggregation, calculation, and accounting valuation activities for all financial

reporting processes. Particular focus is placed on the controls for the core processes that play a fundamental role in the

preparation of the financial statements. This primarily relates to processes which are relevant for valuations, the results of

which have a significant impact on the financial statements (e.g. valuation of credit risk provisions, derivatives, equity

participations, provisions for personnel expenses and market risk).

Consolidation

The financial statement data are predominantly automatically transferred to the IBM Cognos Controller consolidation system.

The IT system is kept secure by limiting access rights.

The plausibility of each Group unit’s financial information is initially checked by the responsible key account manager in the

department Group Consolidation. Group-level control activities comprise the analysis and, where necessary, modification of

the financial statements submitted by Group units. In this process, the results of internal meetings as well as comments from

the Group units and comments from external reviews are taken into account. Both the plausibility of the reporting package as

well as critical matters pertaining to the Group unit are acknowledged.

The subsequent consolidation steps are performed using the consolidation system, including capital consolidation, expense

and income consolidation, and debt consolidation. Finally, intra-Group gains are eliminated where applicable. At the end of the

consolidation process, the notes to the financial statements are prepared in accordance with IFRS and the BWG/UGB.

All control measures constitute part of the day-to-day business processes and are used to prevent, detect and correct any

potential errors or inconsistencies in the financial reporting. Control measures range from process controls of the consolidation

steps, to account reconciliation, to the managerial review of the results for the period.

The consolidated financial statements and management report are reviewed by the Audit Committee of the Supervisory Board

and are also presented to the full Supervisory Board for its information.

Information and communication

The consolidated financial statements are prepared using Group-wide standardized data requirements. The accounting and

valuation standards are defined and explained in the RBI Group Accounts Manual and must be applied when preparing the

financial statements. Detailed instructions for the Group units on measuring credit risk and similar issues are provided in the

Group directives. The relevant units are kept abreast of any changes to the instructions and standards through regular training

courses.

Each year the Annual Report contains the consolidated results in the form of a complete set of consolidated financial

statements. In addition, the Group management report contains comments on the consolidated results in accordance with the

statutory requirements.

Throughout the year, consolidated monthly reports are produced for the RBI Management Board. The published statutory

interim reports conform to the provisions of IAS 34 and are produced on a quarterly basis. Before publication, the consolidated

financial statements are presented to senior managers and Management Board members for final approval and then

submitted to the Supervisory Board’s Audit Committee. Analyses pertaining to the consolidated financial statements are also

provided for management, as are forecast Group figures at regular intervals. The financial and capital planning process,

undertaken by the department Group Planning, Reporting & Analysis, includes a three-year Group budget.

Group management report23

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Monitoring

Financial reporting is a primary focus of the ICS framework, whereby financial reporting processes are subject to risk-based

prioritization and control examinations with results regularly reported to the Management Board and the Supervisory Board for

evaluation. Additionally, the Audit Committee is required to monitor the financial reporting process. The Management Board is

responsible for ongoing company-wide monitoring. The internal control system is based on three lines of defense.

The first line of defense consists of individual departments, whereby department heads are responsible for monitoring their

business areas and ensuring that an appropriate control environment is established. The departments conduct plausibility

checks and control activities on a regular basis, in accordance with the documented processes.

The second line of defense is made up of specialist areas focused on specific topics. These include, for example, Compliance,

Data Quality Governance, Operational Risk Controlling, and Security & Business Continuity Management. Their primary aim is to

support specialist areas with their control processes, to review the carrying out of controls, and to introduce leading practices

within the organization.

Internal audits are the third line of defense in the monitoring process. Responsibility for auditing lies with Group Internal Audit

and the respective internal audit departments of the Group units. All internal auditing activities are subject to the Group Audit

Standards, which are based on the Austrian Financial Market Authority’s minimum internal auditing requirements and

international best practices. Group Internal Audit’s internal rules also apply (notably the Audit Charter). Group Audit regularly

and independently verifies compliance with the internal rules within the RBI Group units. The head of Group Internal Audit

reports directly to the Management Board, with additional reporting obligations to the Chairman of the Supervisory Board and

members of the Audit Committee of the Supervisory Board.

24Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Capital, share, voting, and

control rights

The following disclosures satisfy the provisions of § 243a (1) of the Austrian Commercial Code (UGB):

(1) As at 31 December 2023, the company’s share capital amounted to € 1,003,265,844.05 and was divided into 328,939,621

voting common bearer shares. As at 31 December 2023, 573,938 (31 December 2022: 510,450) of those were own shares, and

consequently 328,365,683 shares were outstanding at the reporting date.

Please see note (29) Equity and non-controlling interests for further disclosures.

(2) The Articles of Association contain no restrictions concerning voting rights or the transfer of shares. The regional Raiffeisen

banks and direct and indirect subsidiaries of the regional Raiffeisen banks are parties to a syndicate contract (syndicate

agreement) regarding RBI AG. The terms of this syndicate agreement include not only a block voting agreement and

preemption rights, but also a prohibition on sales of the RBI shares held by the regional Raiffeisen banks (with few exceptions) ,

if the sale would reduce the regional Raiffeisen banks’ aggregate shareholding in RBI AG (direct and/or indirect) to less than 40

per cent of the share capital plus one share.

(3) Raiffeisenlandesbank Niederösterreich-Wien AG holds directly and indirectly total around 24.83 per cent of the share capital

of the company. By virtue of the syndicate agreement regarding RBI AG, the regional Raiffeisen banks and their direct and

indirect subsidiaries as parties acting in concert as defined in § 1 (6) of the Austrian Takeover Act (ÜbG). The regional Raiffeisen

banks hold a total of around 61.00 per cent of the voting rights. The remaining shares of RBI AG are held in free float, with no

other direct or indirect shareholdings amounting to 10 per cent or more known to the Management Board.

(4) The Articles of Association do not contain any special rights of control associated with holding shares. According to the

syndicate agreement for RBI AG, the regional Raiffeisen banks can nominate nine members of the RBI AG Supervisory Board. In

addition to the members nominated by the regional Raiffeisen banks, the RBI AG Supervisory Board should also include three

independent representatives of free-float shareholders who are not attributable to the Austrian Raiffeisen Banking Group.

(5) There is no control of voting rights arising from interests held by employees in the share capital.

(6) Pursuant to the Articles of Association, a person who is aged 68 years or older may not be appointed as a member of the

Management Board or be reappointed for another term in office. The rule for the Supervisory Board is that a person who is

aged 75 years or older may not be elected as a member of the Supervisory Board or be re-elected for another term in office.

Moreover, no person who already holds eight supervisory board mandates in publicly traded companies may be a member of

the Supervisory Board. Holding a position as chairman of the supervisory board of a publicly traded company would count

twice for this purpose. The Annual General Meeting may choose to waive this restriction through a simple majority of votes if

permitted by law. Any candidate who has more mandates for, or chairman positions on, supervisory boards in publicly traded

companies must disclose this to the Annual General Meeting. There are no further regulations regarding the appointment or

dismissal of members of the Management Board and the Supervisory Board beyond the provisions of the relevant laws. The

Articles of Association stipulate that the resolutions of the Annual General Meeting are, provided that there are no mandatory

statutory provisions to the contrary, adopted by a simple majority of the votes cast. Where the law requires a capital majority

in addition to the voting majority, resolutions are adopted by a simple majority of the share capital represented in the votes. As

a result of this provision, members of the Supervisory Board may be dis-missed prematurely by a simple majority. The

Supervisory Board is authorized to adopt amendments to the Articles of Association that only affect the respective wording.

This right may be delegated to committees. Furthermore, there are no regulations regarding amendments to the company

Articles of Association beyond the provisions of the relevant laws.

(7) Pursuant to § 169 of the Austrian Stock Corporation Act (AktG), the Management Board has been authorized since the

Annual General Meeting of 13 June 2019 to increase the share capital with the approval of the Supervisory Board – in one or

more tranches – by up to € 501,632,920.50 through the issuance of up to 164,469,810 new voting common bearer shares in

exchange for contributions in cash and/or in kind (including by way of the right of indirect subscription by a bank pursuant to §

153 (6) of the AktG) by 2 August 2024 at the latest and to fix the offering price and terms of the issue with the approval of the

Supervisory Board. The Management Board is further authorized to exclude shareholders’ subscription rights with the approval

of the Supervisory Board (i) if the capital increase is carried out in exchange for contributions in kind, or (ii) if the capital

increase is carried out in exchange for contributions in cash and the shares issued under the exclusion of subscription rights do

not exceed 10 per cent of the company’s share capital (exclusion of subscription rights). The (i) utilization of authorized capital

with exclusion of the statutory subscription right in the event of a capital increase in return for a contribution in cash, and the

(ii) implementation of the conditional capital resolved upon in the Annual General Meeting on 20 October 2020 in order to grant

conversion or subscription rights to convertible bond creditors may not exceed 10 per cent in total of the share capital of the

Group management report25

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

company. The utilization of the authorized capital in the form of a capital increase in return for a contribution in kind is not

covered by this restriction. No use has been made to date of the authority granted in June 2019 to utilize the authorized

capital.

The share capital is conditionally increased (conditional capital) pursuant to § 159 (2) 1 of the AktG by up to € 100,326,584 by

issuing of up to 32,893,962 ordinary bearer shares. The conditional capital increase will only be implemented to the extent that

use is made of an irrevocable right of conversion into or subscription to shares which the company grants to the creditors

holding convertible bonds issued on the basis of the resolution passed at the Annual General Meeting on 20 October 2020, or in

the event of having to fulfil a conversion obligation set out in the convertible bonds’ terms of issuance. In both cases, the

Management Board does not decide to allocate own shares. The issue price and the conversion ratio are to be calculated in

accordance with recognized quantitative financial methodologies and the price of the company’s shares in a recognized

pricing procedure (calculation basis of the issuance price); the issue price may not be below the proportionate amount of the

share capital. The newly issued shares from the conditional capital increase are entitled to a dividend equivalent to that of the

shares traded on the stock exchange at the time of issuance. The Management Board is authorized, with the approval of the

Supervisory Board, to determine the further details of the implementation of the conditional capital increase.

The Management Board was further authorized pursuant to § 174 (2) of the AktG by the Annual General Meeting on 20 October

2020, within 5 years from the date of the resolution, i.e. until 19 October 2025, with the consent of the Supervisory Board, to

issue also in several tranches, convertible bonds with rights to convert into or subscribe to shares of the company or

convertible bonds with conversion obligations (contingent convertible bonds pursuant to § 26 of the Banking Act), including

convertible bonds that meet the requirements for Additional Tier 1 capital instruments pursuant to Regulation (EU) No.

575/2013 of the European Parliament and the Council of 26 June 2013 on supervisory requirements for credit institutions and

investment firms, as amended, with full exclusion of shareholders’ subscription rights. The authorization includes the issuance

of convertible bonds in a total nominal amount of up to € 1,000,000,000 with rights to convert into or subscribe to up to

32,893,962 ordinary bearer shares of the company with a proportionate amount of the share capital up to € 100,326,584. The

issue price and the conversion ratio are to be calculated in accordance with recognized quantitative financial methodologies

and the price of the company shares in a recognized pricing procedure (calculation basis of the issuance price); the issue price

of the convertible bonds may not be below the proportionate amount of the share capital. In this respect, the Management

Board is authorized to determine all further issuance and structural features as well as the issuance terms and conditions of

the convertible bonds, in particular the interest rate, issue price, term of validity and denomination, provisions protecting

against dilution, conversion period, conversion rights and obligations, conversion ratio and conversion price. The convertible

bonds may also be issued – observing the limit of the corresponding equivalent value in euros – in the currency of the United

States of America and in the currency of any other Organization for Economic Cooperation and Development (OECD) member

state. The convertible bonds may also be issued by a company which Raiffeisen Bank International AG owns 100 per cent of,

directly or indirectly. For this event, the Management Board is authorized to provide, with the consent of the Supervisory Board,

a guarantee for the convertible bonds on behalf of the company and to grant the holders of the convertible bonds conversion

rights into ordinary bearer shares of Raiffeisen Bank International AG and, if a conversion obligation is stipulated in the

convertible bonds’ issuance terms, to enable the obligation of conversion into ordinary bearer shares of Raiffeisen Bank

International AG to be fulfilled; with the exclusion of the rights of shareholders to subscribe to the convertible bonds.There

have been no convertible bonds issued to date.

The Annual General Meeting held on 31 March 2022 authorized the Management Board pursuant to § 65 (1) 8, § 65 (1a) and § 65

(1b) of the AktG to purchase own shares and to retire them if appropriate without requiring any further prior resolutions to be

passed by the Annual General Meeting, though with the approval of the purchase by the Supervisory Board can also be

effected off-exchange under the exclusion of the shareholders’ pro rata tender right. Own shares, whether already purchased

or to be purchased, may not collectively exceed 10 per cent of the company’s share capital. The authorization to purchase own

shares expires 30 months after the date of the Annual General Meeting resolution, i.e. until 30 September 2024. The acquisition

price for repurchasing the shares may be no lower than € 3.05 per share and no higher than 10 per cent above the average

unweighted closing price over the 10 trading days prior to exercising this authorization. The authorization may be exercised in

full or in part or also in several partial amounts, for one or more purposes – with the exception of securities trading – by the

company, by a subsidiary (§ 189a (7) of the UGB) or by third parties for the account of the company or a subsidiary.

26Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

The Management Board was further authorized, pursuant to § 65 (1b) of the AktG, to decide, with the approval of the

Supervisory Board, on the sale of own shares by means other than the stock exchange or a public tender, to the full or partial

exclusion of shareholders’ subscription rights, and to stipulate the terms of sale. Shareholders’ subscription rights may only be

excluded if the own shares are used to pay for a contribution in kind, to acquire enterprises, businesses, operations or stakes in

one or several companies in Austria or abroad. Furthermore, shareholders’ subscription rights may be excluded in the event

that convertible bonds are issued in future, in order that (own) shares may be issued to such convertible bond creditors that

have exercised their right of conversion into or subscription to shares in the company, and also in the event of a conversion

obligation stipulated in the convertible bonds’ issuance conditions in order to fulfil this conversion obligation. This authorization

may be exercised in whole, in part or in several partial amounts for one or more purposes by the company, a subsidiary (§ 189a

7 UGB) or by third parties for the account of the company or a subsidiary and remains in force for five years from the date of

this resolution, i.e. until 31 March 2027. Since that time, there were no own shares purchased based on this authorization from

March 2022.

The Annual General Meeting of 31 March 2022 also authorized the Management Board, under the provisions of § 65 (1) 7 of the

AktG, to purchase own shares for the purpose of securities trading, which may also be conducted off-market, during a period

of 30 months from the date of the resolution (i.e. until 30 September 2024), provided that the trading portfolio of shares

purchased for this purpose does not at the end of any given day exceed 5 per cent of the company's respective share capital.

The consideration for each share to be acquired must not be less than half the closing price at the Vienna Stock Exchange on

the last day of trading preceding the acquisition and must not exceed twice the closing price at the Vienna Stock Exchange on

the last day of trading preceding the acquisition. This authorization may be exercised in full or in part or also in several partial

amounts by the company, by a subsidiary (§ 189a (7) UGB) or by third parties acting for the account of the company or a

subsidiary.

(8) The following material agreements exist, to which the company is a party, and which take effect, change, or come to an

end upon a change of control in the company as a result of a takeover bid:

· RBI AG is insured under a Group-wide D&O policy. In the event of a merger with another legal entity, the insurance

policy would automatically cease at the end of the insurance period in which the merger took effect. In such cases,

insurance cover only exists for claims for damages arising from breaches of obligations that occurred before the

merger, which are reported to the insurer prior to the termination of RBI AG’s Group-wide D&O insurance cover.

· RBI AG is a member of the Professional Association of Raiffeisen Banks. Upon a change in control of RBI AG which

results in the attainment of control by shareholders outside of the Raiffeisen Banking Group Austria, membership of

the Professional Association of Raiffeisen Banks, as well as that of the Raiffeisen-IPS pursuant to Art. 113 (7) of the

CRR, the Österreichische Raiffeisen-Sicherungseinrichtung eGen and of the Raiffeisen Customer Guarantee Scheme

Austria may be terminated. RBI AG also serves as the central institution of the Raiffeisen Banking Group at a national

level. Upon a change in control of RBI AG, related contracts (central institution of the liquidity group pursuant to § 27a

of the BWG may end or change.

· The company’s refinancing agreements and agreements concerning third-party financing for subsidiaries, which are

guaranteed by the company, stipulate in some cases that the lenders can demand early repayment of the financing

in the event of a change in control.

(9) There are no indemnification agreements between the company and its Management Board and Supervisory Board

members or employees that would take effect in the event of a public takeover bid.

Group management report27

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Risk management

For information on risk management, please refer to the risk report in the consolidated financial statements.

· Corporate Governance

Further information can be found in the Corporate Governance Report chapter of the Annual Report, as well as on the RBI

website (www.rbinternational.com → Investors → Corporate Governance & Remuneration).

· Consolidated non-financial

report

Pursuant to the Sustainability and Diversity Improvement Act (NaDiVeG), the consolidated non-financial statement, which has

to be prepared in accordance with § 267a of the Austrian Commercial Code (UGB), is issued as an independent non-financial

report (Sustainability Report). The report containing detailed information on sustainability management developments, will be

published online at www.rbinternational.com → Sustainability & ESG → Sustainability Reports and also contains the disclosure

for the parent company in accordance with § 243a of the UGB.

· Human Resources

The Group People & Organisational Innovation division (P&OI) combines the areas of Human Resources and Organisational

Development & Innovation. Combining these areas into a single division enables the group to forge an integrated approach to

employee aspects, leadership, culture and organizational development. This makes P&OI a key partner in the implementation

of RBI’s strategy and goals. The division prioritizes the efficient execution of personnel processes, encompassing tasks such as

data administration, contract preparation or recruitment. In addition, the division is responsible for personnel development,

career management, leadership development as well as professional education and training. In the area of organizational

development, the division extends support for restructurings and transformations within the group by leveraging its expertise

in specialized fields, such as change management and organizational design, while spearheading targeted initiatives in the

area of operational innovation.

Current labor market trends show increased turnover rates worldwide and a greater willingness to change jobs since the

COVID-19 pandemic. On the other hand, the challenges stemming from the number of retirees leaving the workforce, evolving

work preferences of Generations Y and Z, along with ongoing technological and regulatory changes, require existing employees

to constantly adapt to new conditions. Furthermore, the number of retirees exiting the workforce, coupled with the evolving

expectations and demands of Generations Y and Z, exert a significant influence on companies and the extent to which they

are viewed as employers of choice. In 2023, RBI was honored multiple times as an employer of choice, including being named in

the LinkedIn Top Employers 2023 and the We Are Developers top tech companies to work for. To maintain this position in the

future, we must understand the expectations and demands of both current employees and applicants and strategically

position the company accordingly.

28Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

In cooperation with the Vienna University of Economics and Business, the Career Dimensions @ RBI project was conducted in

2023 to comprehensively explore the career expectations of RBI employees and assess how well their expectations align with

their actual experiences at RBI. The findings reveal that factors such as financial security, a healthy work-life balance,

opportunities for continuous training and development as well as positive work relationships play a pivotal role in shaping the

level of satisfaction employees experience in the course of their careers, while also influencing their level of motivation and

commitment to their jobs. Drawing on these insights, RBI has initiated several programs to fulfill our key objectives:

Remote work within the EU: Due in part to the international nature of RBI’s workforce, the desire to work abroad is growing. In

July 2023, RBI became the first bank in Austria to enable its employees to work remotely in other EU countries on a temporary

basis.

Learning organization: As learning and continuous development contribute significantly to career satisfaction, RBI aims for the

seamless integration of lifelong learning and collaborative knowledge-sharing into the company culture and practices, with a

focus on:

· Promoting a culture of learning, thereby repositioning learning as a priority within the company culture

· Developing a competency in and a flexible approach to leaning

· Achieving a higher level of automation and simplification through the use of new technologies

· Producing a portfolio of relevant learning content

· Devising uniform standards and quality criteria for learning formats and content (in terms of their approach to

didactics, learning psychology and technology)

Team development: The retention of employees is influenced by various factors, including the quality of work relationships, the

level of job and career satisfaction, and personal performance. To enhance retention, teams receive development support

through a series of workshops, with a special focus on fostering mutual trust, open communication, and effective collaboration

methods.

Management development: Managers receive support to optimize their role and guide their teams through periods of

uncertainty and change, while giving due consideration to the individual needs and expectations of their team members. The

training concentrated on bolstering individual resilience, fostering a common understanding of managerial expectations, and

incorporating peer coaching and communication techniques.

Transformation support: An internal team specializing in change management and change communication was formed to

provide optimal support for a wide array of transformations, ranging from minor reorganizations to significant overhauls. The

goal is to properly equip managers and employees for the transformation process, guide them through the process, garner

their commitment to the change, and provide support to individuals and teams throughout the change journey.

AI – opportunities for the future: Artificial Intelligence (AI) holds the potential to revolutionize the way people work and enhance

overall efficiency. Employees are encouraged to explore AI and consider how it could be used at RBI. Since October 2023,

employees of RBI AG have been able to access a version of ChatGPT tailored specifically to RBI. Diverse learning formats,

including eLearning, are offered to deepen employees’ comprehension of AI and machine learning and discover the possibilities

of this new technology while gaining insights into its limitations and potential challenges.

Personnel development

As at 31 December 2023, RBI had 44,887 employees (full-time

equivalents), which was 473 more than at the end of 2022. The

largest increases were recorded in Russia (plus 405), in head

office (plus 148) and in Hungary (plus 91). The largest decrease

occurred in Serbia (minus 236).

Group management report29

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Outlook

Economic outlook

After a year of stagnating economic growth, the economy is expected to return to a moderate growth trajectory in 2024.

However, the economic upturn will probably only be moderate given the continuing high interest rates. The economy is

expected to be supported by private consumption, which is benefiting from rebounding real wages. The industrial sector

should exit its recessionary environment in the course of 2024. Significant increases in the price of fossil fuels due to military

developments are a risk factor but not expected. A quick end to the war in Ukraine currently seems improbable. However,

absent a further substantial military escalation, the war seems unlikely to have any additional negative implications for the

economy in the euro area or the CE/SEE countries. Inflation will continue to fall in 2024 but not at the same pace as in 2023. The

US Federal Reserve and the ECB are nevertheless likely to embark on a series of interest rate cuts over the course of the year,

although they will proceed cautiously. Interest rates will therefore be significantly higher in 2024 than in previous years. One

potential risk is that individual sectors of the financial system will struggle to cope with persistently higher interest rates.

Central Europe

Real wages in Central Europe (CE) are expected to rise as inflation continues to fall in 2024 despite a temporary increase in

inflation due to the expiration of inflation-dampening measures. This should in turn help revive consumer demand, which

should receive additional support from falling interest rates. Economic growth in the region is thus expected to be significantly

higher in 2024 as a whole (2.7 per cent) than in the previous year (0.1 per cent). The top growth drivers are forecast to be

Hungary (3.0 per cent), not least due to investments in the automotive and battery industry and the creation of new production

capacity, and Poland (3.1 per cent). Poland is likely to receive a boost from NGEU funds as a result of the election and should

receive economic tailwinds from the recovery of Germany’s industrial sector.

Southeastern Europe

Alongside resurgent consumer demand across Europe, Southeastern Europe (SEE), especially the Western Balkans, will benefit

from the EU’s recently unveiled growth plan for the Western Balkans. GDP growth is expected to accelerate to 2.8 per cent in

2024 in this environment. Together with existing cash inflows from NGEU funds and the financial framework as well as the

effects of nearshoring/friendshoring, the region should be able to benefit from its locational advantages (low labor costs and

geographic location). The Western Balkan countries of Albania (3.5 per cent) and Kosovo (3.9 per cent) are predicted to have the

highest economic growth in 2024.

Eastern Europe

In Eastern Europe, growth will once again be the strongest in Ukraine, where GDP is forecast to increase 4.9 per cent in 2024,

driven by strong growth in private consumption and investment. Rising exports and inflows of external funds should support

the economy as well. The Russian economy should record positive GDP growth in 2024 (1.5 per cent) despite the sanctions,

military mobilization, unfavorable investment environment and economic isolation. However, its monetary policy has

temporarily tightened in response to increasing inflationary pressure, some of which was prompted by the depreciation of the

Russian ruble. In Belarus, limited domestic resources, growing competition from Chinese companies in the Russian market,

ongoing EU/US sanctions and base effects will slow GDP growth in 2024 (2.0 per cent).

Austria

Following the 2023 recession, the Austrian economy is likely to return to a moderate growth trajectory in the first half of 2024.

Real wage growth is expected to be clearly positive in 2024, which should support private consumption. Industrial companies

should be finished with reducing their overflowing inventories by the spring, which should have a positive impact on new orders

and ultimately on industrial production. However, the upturn is expected to be only moderate, with GDP growth of just 0.2 per

cent expected for 2024 as a whole. Inflation will continue to drop in 2024, albeit at a much slower pace. Still, the inflation

differential to the euro area is likely to be noticeably lower in 2024 than in 2023.

30Group management report

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Banking sector in Austria

2023 was affected by regulatory decisions made in 2022 on mortgage lending standards for households and by the dramatic

change in interest rates precipitated by the shift in the ECB’s interest rate stance. Following the change in the ECB’s interest

rates, lending to both private households and companies is expected to remain significantly subdued in 2024. This is mirrored in

the growth forecasts for the entire Austrian economy, which assume only a moderate upturn. Given the interest rate structure

of outstanding retail and corporate loans, which contain a significant proportion of variable-rate-only loans, risks costs are

expected to increase moderately in 2024 since higher interest rates will likely adversely affect both private households and

companies. The steep increases in net interest income that the banking sector posted in 2022 and 2023 should begin to

normalize in 2024. This is attributable to a progressive tightening of deposit conditions in the sector, especially for demand

deposits, thereby exerting greater pressure on interest margins. Capital market refinancing costs also remain higher due to the

changed interest rate environment across all bond classes. Nevertheless, the Austrian banking sector feels fundamentally well

positioned to master the challenges ahead.

CEE banking sector

The upcoming monetary easing in CE/SEE core markets that fall outside the euro area will weigh on earnings for banks in the

region. In contrast, the relative delay in the ECB cycle should continue to support interest margins for economies that are

located in the euro area and tied to the euro. The weak economy could ultimately raise the risks to asset quality and

moderately increase loan loss provisions, which the core earnings capacity should still be able to accommodate. On the cost

side, special taxation and selected policy support programs for borrowers will likely remain in place (albeit probably in a

weakened form), while EU-based banks will have to start refinancing MREL bonds. Regarding lending, the ongoing economic

uncertainty may continue to discourage lending to the corporate sector while the retail market could bounce back faster.

However, this will require an easing of financial conditions and a further recovery in real wages. On the regulatory front, ESG

will remain high on the agenda and will see further implementation in the regulatory framework, with EU regulators setting the

tone for the entire CEE region.

Outlook for RBI - Guidance 2024

The following guidance refers to RBI excluding Russia and Belarus, whereas the corresponding figures in brackets refer to the

existing footprint. RBI will continue to progress potential transactions which would result in the sale or spin-off of

Raiffeisenbank Russia and deconsolidation of Raiffeisenbank Russia from RBI.

In 2024, net interest income is expected around € 4.0 billion (around € 5.1 billion) and net fee and commission income around

€ 1.8 billion (around € 2.7 billion).

We expect customer loan growth to increase by around 6 per cent (around 5 per cent).

We expect general administrative expenses around € 3.3 billion (around € 4.0 billion), resulting in a cost/income ratio of around

52 per cent (around 47 per cent).

The provisioning ratio – before use of overlays – is expected to be around 50 basis points (around 60 basis points).

The consolidated return on equity is expected to be around 11 per cent (around 12 per cent) in 2024.

At year-end 2024 we expect a CET1 ratio of around 14.6 per cent* (around 17.8 per cent).

Any decision on dividends will be based on the capital position of the Group excluding Russia.

Medium term return on equity and payout ratio targets are suspended due to current uncertainties in Eastern Europe.

*In a ‘P/B Zero‘ Russia deconsolidation scenario, before benefit from STRABAG dividend-in-kind.

Group management report31

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Segment and country

analysis

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Segment reporting at RBI is based on the current organizational structure pursuant to IFRS 8. A cash generating unit within the

Group is a country. For further information on segmentation, please refer to the chapter segment reporting in the consolidated

financial statements as well as the RBI website (www.rbinternational.com → Investors → Results & Reports).

Central Europe


in € million	2023	2022	Change	Q4/2023	Q3/2023	Change
Net interest income	1,590	1,341	18.6%	428	409	4.4%
Dividend income	12	3	383.9%	4	2	96.9%
Current income from investments in associates	5	4	29.0%	1	1	(6.3)%
Net fee and commission income	578	565	2.3%	152	138	9.6%
Net trading income and fair value result	(16)	0	>500.0%	2	5	(57.2)%
Net gains/losses from hedge accounting	(8)	(5)	72.2%	(8)	3	–
Other net operating income	30	39	(23.8)%	10	2	460.4%
Operating income	2,191	1,947	12.6%	589	561	5.0%
General administrative expenses	(1,009)	(909)	11.0%	(271)	(252)	7.7%
Operating result	1,182	1,037	14.0%	318	309	2.8%
Other result	(887)	(512)	73.2%	(279)	(175)	59.2%
Governmental measures and compulsory contributions	(132)	(137)	(3.8)%	(2)	(3)	(39.3)%
Impairment losses on financial assets	(27)	(12)	122.6%	(6)	16	–
Profit/loss before tax	135	375	(64.0)%	32	148	(78.4)%
Income taxes	(192)	(153)	25.6%	(66)	(48)	37.2%
Profit/loss after tax	(57)	222	–	(34)	99	–

Return on equity before tax	3.1%	9.7%	(6.7) PP	2.9%	13.3%	(10.4) PP
Return on equity after tax	–	5.8%	–	–	9.0%	–
Net interest margin (average interest-bearing assets)	2.49%	2.29%	0.20 PP	2.69%	2.57%	0.13 PP
Cost/income ratio	46.1%	46.7%	(0.7) PP	46.0%	44.9%	1.1 PP

The year-on-year decrease in profit after tax mainly reflected an increase of € 368 million in expenses for credit-linked

litigation and for annulments of loan agreements in Poland. This development resulted from a significant increase in litigation,

higher loss ratios and losses from annulments of loan agreements resulting from a decision of the European Court of Justice in

June. The increase of € 244 million in operating income was primarily attributable to the positive trend in net interest income

as a result of higher market interest rates in Hungary (up € 169 million) and Slovakia (up: € 83 million). The Czech Republic

reported a decrease of € 10 million, as rising interest expenses for customer deposits from households and for newly issued

MREL-eligible debt securities clearly exceeded the increase in interest income from repo business and customer loans. General

administrative expenses increased € 100 million, in Hungary (up € 56 million) as a result of higher staff expenses and

transaction taxes, in Slovakia (up € 29 million) also as a result of higher staff expenses, and in Poland (up € 25 million) mainly

due to increased legal and consulting expenses. Risk costs increased € 15 million as a result of higher allocations in the Czech

Republic (up € 47 million), while improved general conditions in Hungary and Slovakia led to lower risk costs. The increase in

income taxes was attributable to the improved result in Slovakia and the introduction of a windfall tax in the Czech Republic

(€ 26 million).

Segment and country analysis33

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023


	Poland		Slovakia
in € million	2023	2022	2023	2022
Net interest income	19	12	404	322
Dividend income	0	0	0	0
Current income from investments in associates	0	0	5	4
Net fee and commission income	0	1	193	185
Net trading income and fair value result	2	2	14	11
Net gains/losses from hedge accounting	0	0	0	0
Other net operating income	14	(1)	(1)	13
Operating income	36	15	615	534
General administrative expenses	(67)	(43)	(271)	(242)
Operating result	(32)	(28)	344	291
Other result	(873)	(505)	(1)	0
Governmental measures and compulsory contributions	(4)	(31)	(7)	(11)
Impairment losses on financial assets	41	46	(30)	(44)
Profit/loss before tax	(868)	(518)	305	235
Income taxes	0	0	(64)	(45)
Profit/loss after tax	(868)	(518)	242	191


	Czech Republic		Hungary
in € million	2023	2022	2023	2022
Net interest income	642	652	525	356
Dividend income	8	0	4	2
Net fee and commission income	183	197	202	183
Net trading income and fair value result	2	(10)	(34)	(3)
Net gains/losses from hedge accounting	(4)	(4)	(4)	0
Other net operating income	25	26	(8)	1
Operating income	857	860	684	539
General administrative expenses	(391)	(400)	(280)	(224)
Operating result	466	460	404	315
Other result	0	9	(13)	(16)
Governmental measures and compulsory contributions	(23)	(22)	(97)	(73)
Impairment losses on financial assets	(41)	6	2	(20)
Profit/loss before tax	401	452	297	205
Income taxes	(96)	(86)	(33)	(22)
Profit/loss after tax	306	366	264	183

34Segment and country analysis

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Southeastern Europe


in € million	2023	2022	Change	Q4/2023	Q3/2023	Change
Net interest income	1,296	943	37.4%	343	336	2.3%
Dividend income	4	8	(48.8)%	0	3	(87.3)%
Net fee and commission income	456	449	1.5%	124	118	5.3%
Net trading income and fair value result	31	(1)	–	22	3	>500.0%
Net gains/losses from hedge accounting	0	0	51.4%	0	0	(57.6)%
Other net operating income	1	10	(85.9)%	(11)	8	–
Operating income	1,789	1,409	27.0%	479	467	2.6%
General administrative expenses	(752)	(699)	7.7%	(226)	(175)	28.9%
Operating result	1,037	711	45.9%	253	292	(13.1)%
Other result	(31)	(13)	144.7%	(24)	0	>500.0%
Governmental measures and compulsory contributions	(39)	(42)	(7.1)%	(8)	(6)	30.0%
Impairment losses on financial assets	(6)	(70)	(91.1)%	(25)	(21)	17.2%
Profit/loss before tax	961	586	63.9%	196	264	(25.7)%
Income taxes	(155)	(83)	85.9%	(33)	(39)	(14.1)%
Profit/loss after tax from continuing operations	806	503	60.3%	162	225	(27.7)%
Gains/losses from discontinued operations	0	46	–	0	0	–
Profit/loss after tax	806	548	47.0%	162	225	(27.7)%

Return on equity before tax	30.8%	18.9%	12.0 PP	25.2%	33.6%	(8.4) PP
Return on equity after tax	25.9%	17.6%	8.2 PP	20.9%	28.6%	(7.8) PP
Net interest margin (average interest-bearing assets)	4.26%	3.46%	0.80 PP	4.34%	4.35%	(0.01) PP
Cost/income ratio	42.1%	49.6%	(7.5) PP	47.1%	37.5%	9.6 PP

In the previous year’s period, the profit for the period of the Bulgarian group units held for sale was disclosed under gains/

losses from discontinued operations. The result of deconsolidation of € 398 million was allocated to the Corporate Center

segment.

The increase in profit after tax from continuing operations was mainly attributable to significantly higher net interest income.

The main drivers of the growth in net interest income were higher interest rates and higher loan volumes. Net interest income

rose € 353 million or 37 per cent. Serbia accounted for € 124 million, primarily as a result of higher interest income due to the

increase in the reference rate and from the acquisition of Crédit Agricole Srbija AD in April 2022. Strong growth in net interest

income was also reported in Romania (€ 90 million or 18 per cent) and in Croatia (€ 64 million or 55 per cent). Net trading

income and fair value result turned from minus € 1 million in the previous year’s period to plus € 31 million. This was attributable

above all to Romania (up € 17 million) due to gains, or lower losses, on loans and debt securities measured at fair value and a

positive result from the revaluation of foreign currency positions. These effects also led to an increase of € 11 million in Croatia.

General administrative expenses were up € 54 million. The biggest increases were reported in staff expenses (€ 30 million),

mainly driven by inflation-related salary rises. Other administrative expenses increased € 12 million largely as a result of higher

IT and office space expenses. Other result was down € 18 million, most of which related to Serbia. This was caused by

modification losses in credit business, which was affected by the national central bank’s decision to impose a temporary

limitation of the nominal interest rate for mortgage loans with variable rates and an amount disbursed of up to € 200

thousand. Risk costs improved markedly with an allocation of € 6 million in the reporting period compared to allocations of

€ 70 million in the previous year’s period. This positive trend was evident in nearly all of the segment’s countries. Romania and

Croatia reported the biggest declines in risk costs – above all for loans to households. Income taxes were up € 72 million to

€ 155 million, which mostly reflected higher earnings.

Segment and country analysis35

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023


	Albania		Bosnia and Herzegovina		Kosovo
in € million	2023	2022	2023	2022	2023	2022
Net interest income	114	72	86	64	66	55
Dividend income	0	1	0	6	0	0
Net fee and commission income	20	19	54	56	17	17
Net trading income and fair value result	(2)	0	2	3	1	0
Other net operating income	(1)	0	(3)	1	6	5
Operating income	131	92	139	130	91	77
General administrative expenses	(53)	(45)	(66)	(63)	(41)	(37)
Operating result	78	47	74	67	50	40
Other result	(2)	(2)	0	(1)	0	0
Governmental measures and compulsory contributions	(7)	(6)	(6)	(5)	(2)	(2)
Impairment losses on financial assets	2	(2)	(2)	(6)	(13)	(5)
Profit/loss before tax	71	38	66	56	36	33
Income taxes	(11)	(6)	(3)	(3)	(4)	(4)
Profit/loss after tax	60	32	63	52	31	29


	Croatia		Romania		Serbia
in € million	2023	2022	2023	2022	2023	2022
Net interest income	181	116	579	489	270	147
Dividend income	0	0	3	0	0	0
Net fee and commission income	73	87	184	180	108	91
Net trading income and fair value result	6	(5)	9	(8)	14	8
Other net operating income	(5)	(1)	1	(1)	3	6
Operating income	256	197	778	661	395	252
General administrative expenses	(125)	(127)	(346)	(310)	(122)	(117)
Operating result	131	71	432	350	273	135
Other result	(12)	(6)	(5)	(5)	(13)	1
Governmental measures and compulsory contributions	(2)	(4)	(10)	(14)	(12)	(10)
Impairment losses on financial assets	12	(9)	6	(30)	(12)	(19)
Profit/loss before tax	130	52	423	301	236	107
Income taxes	(25)	(9)	(77)	(47)	(34)	(15)
Profit/loss after tax	105	43	346	254	202	92

36Segment and country analysis

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Eastern Europe


in € million	2023	2022	Change	Q4/2023	Q3/2023	Change
Net interest income	1,915	2,025	(5.4)%	509	462	10.1%
Dividend income	0	0	25.6%	0	0	–
Current income from investments in associates	3	6	(54.7)%	0	1	(76.1)%
Net fee and commission income	1,364	2,207	(38.2)%	239	253	(5.5)%
Net trading income and fair value result	192	471	(59.1)%	14	53	(73.8)%
Net gains/losses from hedge accounting	(2)	(29)	(92.7)%	0	(1)	–
Other net operating income	(32)	(56)	(42.7)%	1	(2)	–
Operating income	3,441	4,624	(25.6)%	763	767	(0.5)%
General administrative expenses	(983)	(954)	3.0%	(234)	(183)	27.7%
Operating result	2,458	3,670	(33.0)%	529	584	(9.4)%
Other result	(10)	(6)	71.8%	(4)	(2)	131.5%
Governmental measures and compulsory contributions	(55)	(66)	(17.6)%	(12)	(13)	(4.0)%
Impairment losses on financial assets	(191)	(743)	(74.3)%	34	48	(29.1)%
Profit/loss before tax	2,203	2,855	(22.8)%	547	618	(11.4)%
Income taxes	(628)	(619)	1.4%	(238)	(173)	37.8%
Profit/loss after tax	1,575	2,236	(29.6)%	309	445	(30.5)%
				0	0
Return on equity before tax	57.0%	88.1%	(31.2) PP	56.6%	64.0%	(7.4) PP
Return on equity after tax	40.7%	69.0%	(28.3) PP	32.0%	46.1%	(14.1) PP
Net interest margin (average interest-bearing assets)	6.84%	6.37%	0.47 PP	7.99%	6.99%	1.00 PP
Cost/income ratio	28.6%	20.6%	7.9 PP	30.7%	23.9%	6.8 PP

Net interest income was down € 110 million to € 1,915 million. In Russia, net interest income fell € 116 million, caused by a

partially currency-related decline in loan volumes of 34 per cent. In Belarus, net interest income decreased € 36 million due to

falling market interest rates and the related lower margins, while in Ukraine higher interest income from sovereign certificates

of deposit, money market business and sovereign bonds led to a volume-driven rise of € 43 million in net interest income. Net

fee and commission income declined as a result of currency devaluations and continued to be influenced by the geopolitical

situation. The decrease was especially seen in Russia and reflected lower volumes following the introduction of internal

transaction limits and lower margins in foreign currency business, which led to a fall of € 576 million. Net fee and commission

income from clearing, settlement and payment services was also down € 184 million due to lower volumes, while net income

from securities business declined € 99 million as a result of lower fees. Net trading income and fair value result decreased € 278

million primarily in Russia, above all due to a lower volume of customer transactions with foreign currencies and the related

decline in the trader margin. Risk costs in the reporting period amounted to € 191 million (previous year’s period: € 743 million),

of which € 95 million was recognized in Russia and € 94 million in Ukraine. The allocations for Stage 1 and Stage 2 totaled € 42

million in Russia (primarily non-financial corporations) and € 70 million in Ukraine (mainly governments and non-financial

corporations). The year-on-year increase in income taxes was mainly attributable to the positive earnings development in

Ukraine and the introduction of a new windfall tax. In Russia, the decline in profit resulted in a lower tax expense, which was

partly offset by the introduction of a new windfall tax (€ 47 million).

Segment and country analysis37

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023


	Belarus		Russia		Ukraine
in € million	2023	2022	2023	2022	2023	2022
Net interest income	86	123	1,411	1,527	418	375
Dividend income	0	0	0	0	0	0
Current income from investments in associates	0	0	3	6	0	0
Net fee and commission income	128	112	1,152	2,008	84	87
Net trading income and fair value result	25	37	135	369	33	65
Net gains/losses from hedge accounting	0	0	(2)	(29)	0	0
Other net operating income	(10)	(15)	(19)	(37)	(2)	(3)
Operating income	229	257	2,679	3,844	532	524
General administrative expenses	(74)	(76)	(729)	(696)	(180)	(182)
Operating result	155	181	1,950	3,148	353	341
Other result	(1)	(2)	(8)	(7)	(1)	4
Governmental measures and compulsory contributions	(2)	(3)	(42)	(54)	(11)	(10)
Impairment losses on financial assets	(2)	(20)	(95)	(471)	(94)	(253)
Profit/loss before tax	151	156	1,805	2,616	247	82
Income taxes	(39)	(43)	(464)	(559)	(125)	(17)
Profit/loss after tax	112	113	1,341	2,058	121	65

38Segment and country analysis

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Group Corporates & Markets


in € million	2023	2022	Change	Q4/2023	Q3/2023	Change
Net interest income	967	733	32.0%	256	248	3.2%
Dividend income	5	12	(61.9)%	0	2	(81.6)%
Current income from investments in associates	14	6	134.4%	4	4	(7.9)%
Net fee and commission income	578	617	(6.2)%	150	142	6.1%
Net trading income and fair value result	163	141	15.3%	21	48	(55.1)%
Net gains/losses from hedge accounting	(5)	(17)	(67.7)%	1	1	10.0%
Other net operating income	108	110	(1.6)%	26	19	36.7%
Operating income	1,831	1,602	14.3%	458	462	(1.0)%
General administrative expenses	(882)	(765)	15.3%	(262)	(203)	29.1%
Operating result	948	837	13.3%	196	259	(24.5)%
Other result	6	3	116.7%	(2)	7	–
Governmental measures and compulsory contributions	(44)	(54)	(17.4)%	(10)	(8)	24.3%
Impairment losses on financial assets	(177)	(122)	45.3%	(151)	(35)	331.9%
Profit/loss before tax	733	664	10.4%	33	223	(85.3)%
Income taxes	(172)	(148)	16.5%	(15)	(48)	(68.7)%
Profit/loss after tax	561	517	8.6%	18	175	(89.8)%

Return on equity before tax	19.0%	17.2%	1.8 PP	3.4%	23.2%	(19.8) PP
Return on equity after tax	14.5%	13.4%	1.1 PP	1.8%	18.2%	(16.4) PP
Net interest margin (average interest-bearing assets)	1.53%	1.19%	0.34 PP	1.64%	1.55%	0.09 PP
Cost/income ratio	48.2%	47.8%	0.4 PP	57.2%	43.9%	13.3 PP

The year-on-year increase in profit after tax was driven mainly by the rise of € 235 million in net interest income. The rise in net

interest income was mostly due to higher interest margins from customer deposits (cash management, money market

deposits, building society business). In contrast, net fee and commission income fell markedly in foreign currency business with

corporate customers after income was especially strong in the previous year. Income from trade finance, lending as well as

clearing, settlement and payment services was also down. General administrative expenses increased € 117 million, primarily as

a result of a rise in other administrative expenses, especially IT and communications expenses, and higher staff expenses

(largely due to regular salaries and a higher headcount) at head office. In the reporting year, impairment losses on financial

assets of € 177 million were considerably higher than in the previous year’s period (€ 122 million). Allocations in Stage 3 for real

estate loans increased at head office, while net releases were recognized in Stage 1 and Stage 2.

Segment and country analysis39

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Corporate Center


in € million	2023	2022	Change	Q4/2023	Q3/2023	Change
Net interest income	(96)	(52)	84.6%	(45)	(17)	169.4%
Dividend income	758	387	96.1%	288	43	>500.0%
Current income from investments in associates	63	48	31.1%	8	14	(44.0)%
Net fee and commission income	71	51	40.8%	15	19	(21.3)%
Net trading income and fair value result	(202)	9	–	(91)	(18)	393.6%
Net gains/losses from hedge accounting	(6)	2	–	(6)	2	–
Other net operating income	159	103	54.2%	60	31	94.5%
Operating income	748	547	36.6%	230	74	210.5%
General administrative expenses	(483)	(395)	22.2%	(122)	(106)	14.3%
Operating result	265	152	73.8%	109	(32)	–
Other result	19	(139)	–	(2)	32	–
Governmental measures and compulsory contributions	(13)	(38)	(65.0)%	8	8	2.6%
Impairment losses on financial assets	13	(19)	–	2	1	114.9%
Profit/loss before tax	283	(43)	–	117	8	>500.0%
Income taxes	155	144	7.7%	12	39	(68.3)%
Profit/loss after tax from continuing operations	438	101	334.4%	130	47	174.9%
Gains/losses from discontinued operations	0	398	–	0	0	–
Profit/loss after tax	438	498	(12.1)%	130	47	174.9%

Dividend income – largely higher intra-group dividends – resulted in an increase of € 372 million. In the previous-year reporting

period, a loss was reported in the other result due to the derecognition of intangible assets of € 29 million at head office. The

expense for governmental measures and compulsory contributions fell € 25 million to € 13 million mainly as a result of lower

contributions to the bank resolution funds and lower bank levies at head office. Net releases of € 13 million were recognized for

impairment losses on financial assets at head office in the reporting period (previous year period: net allocation of € 19 million).

The other result amounted to € 19 million (previous year’s period: minus € 139 million). The measurement of investments in

associates led to reversals of impairment of € 38 million in the reporting period. In contrast, in the comparable period of the

previous year, impairment losses of € 37 million on investments in associates and € 30 million on investments in subsidiaries

were recognized. In the previous year, € 68 million related to impairments of goodwill at a Czech (€ 60 million) and Serbian (€ 8

million) group unit.

In contrast to these positive effects, net trading income and fair value result was down € 210 million. The certificate business

at head office generated high valuation gains above all due to the steep rise in own credit spreads from certificate issues

measured at fair value in the previous year. However, credit spreads declined some 35 basis points in the current year. As a

result, the risk-related valuation result decreased year-on-year to minus € 49 million. In addition, the Treasury result fell € 43

million as a result of valuation effects. The increase of € 88 million in general administrative expenses reflected higher staff

expenses mainly due to higher regular salaries and a rise in the headcount as well as higher IT and consulting expenses at head

office. Net interest income was down € 44 million largely as a result of higher refinancing costs at head office.

In the previous year’s period, gains/losses from discontinued operations included the deconsolidation result of the Bulgarian

group units.

40Segment and country analysis

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Consolidated financial

statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Company

Raiffeisen Bank International AG (RBI AG) is registered in the commercial register of the Commercial Court of Vienna under FN

122119m. Its address is Am Stadtpark 9, 1030 Vienna.

RBI regards Austria, where it is a leading corporate and investment bank, as well as Central and Eastern Europe (CEE) as its

home market. Subsidiary banks cover 12 markets in the region. In addition, the Group includes numerous other financial service

providers active in areas such as leasing, asset management, factoring and M&A. RBI not only offers Austrian and international

companies a broad range of products in corporate and investment banking, but also a comprehensive coverage in CEE.

Through an extensive branch network, local companies of all sizes as well as private customers are supplied with high quality

financial products. RBI maintains representative offices and service branches in selected Asian and Western European locations

to support its business activities. In total, around 45,000 RBI employees serve 18.6 million customers from more than 1,500

business outlets, the vast majority of which are in CEE.

Since the company’s shares are traded on a regulated market as defined in § 1 (2) of the Austrian Stock Market Act (BörseG)

(prime market of the Vienna Stock Exchange) and numerous RBI AG issues are listed on a regulated market in the EU, RBI AG is

required by § 59a of the Austrian Banking Act (BWG) to prepare consolidated financial statements in accordance with the

International Financial Reporting Standards (IFRSs). RBI has no majority shareholder. The eight regional Raiffeisen banks are

core shareholders that collectively hold approximately 60.6 per cent of the shares, with the remaining shares in free float.

As a credit institution within the meaning of § 1 of the Austrian Banking Act, RBI AG is subject to regulatory supervision by the

Financial Market Authority located at Otto-Wagner-Platz 5, A-1090 Vienna (www.fma.gv.at) and the European Central Bank

located at Sonnemannstraße 22, D-60314 Frankfurt am Main (www.bankingsupervision.europa.eu).

The consolidated financial statements are lodged with the Companies Register in accordance with Austrian disclosure

regulations and published through the electronic disclosure and information platform (EVI). They were signed by the

Management Board on 12 February 2024 and subsequently submitted for the notice of the Supervisory Board. As part of the

annual financial report as defined in § 124 of the Austrian Stock Market Act (BörseG), the consolidated financial report is also

prepared and published in the unified electronic reporting format (ESEF format).

The disclosures required under Article 434 of EU Regulation No 575/2013 on prudential requirements for credit institutions

(Capital Requirements Regulation, CRR) are published on the internet on RBI’s website at www.rbinternational.com → Investors

→ Results & Reports.


ESEF Information
Name of ultimate parent of group	Raiffeisen Bank International AG
Name of reporting entity	Raiffeisen Bank International AG
Legal form of entity	AG
Principal place of business	1030 Vienna
Address of entity's registered office	Am Stadtpark 9, 1030 Vienna
Domicile of entity	Austria
Country of incorporation	Austria
Description of nature of entity's operations and principal activities
RBI regards Austria, where it is a leading corporate and investment bank, as well as Central and Eastern Europe (CEE) as its home market. 12 markets in the region are covered by subsidiary banks, the Group also comprises numerous other financial services providers, for instance in the field of leasing, asset management, factoring and M&A. RBI not only offers Austrian and international companies a broad range of products in corporate and investment banking, but also a comprehensive coverage in CEE. Through an extensive branch network, local companies of all sizes as well as private customers are supplied with high-quality financial products. RBI maintains representative offices and service branches in selected Asian and Western European locations to support its business activities.

42 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Statement of comprehensive

income

Income statement


in € million	Notes	2023	2022
Net interest income	[1]	5,683	5,053
Interest income according to effective interest method		8,293	6,681
Interest income other		2,313	577
Interest expenses		(4,923)	(2,205)
Dividend income	[2]	35	64
Current income from investments in associates	[3]	85	64
Net fee and commission income	[4]	3,042	3,878
Fee and commission income		4,066	4,835
Fee and commission expenses		(1,025)	(957)
Net trading income and fair value result	[5]	186	663
Net gains/losses from hedge accounting	[5]	(28)	(41)
Other net operating income	[6]	62	29
Operating income		9,065	9,710
Staff expenses		(2,209)	(2,010)
Other administrative expenses		(1,224)	(1,081)
Depreciation		(475)	(461)
General administrative expenses	[7]	(3,908)	(3,552)
Operating result		5,158	6,158
Other result	[8]	(906)	(667)
Governmental measures and compulsory contributions	[9]	(284)	(337)
Impairment losses on financial assets	[10]	(393)	(949)
Profit/loss before tax		3,576	4,203
Income taxes	[11]	(997)	(859)
Profit/loss after tax from continuing operations		2,578	3,344
Gains/losses from discontinued operations		0	453
Profit/loss after tax		2,578	3,797
Profit attributable to non-controlling interests	[29]	(192)	(170)
Consolidated profit/loss		2,386	3,627

Consolidated financial statements43

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Other comprehensive income and total

comprehensive income


in € million	Notes	2023	2022
Profit/loss after tax		2,578	3,797
Items which are not reclassified to profit or loss		0	53
Remeasurements of defined benefit plans	[27]	(2)	34
Fair value changes of equity instruments	[17]	(1)	(59)
Fair value changes due to changes in credit risk of financial liabilities	[19]	6	61
Share of other comprehensive income from companies valued at equity	[24]	(2)	25
Deferred taxes on items which are not reclassified to profit or loss	[11]	(1)	(7)
Items that may be reclassified subsequently to profit or loss		(1,060)	(409)
Exchange differences		(1,168)	(45)
Hedge of net investments in foreign operations	[22]	37	(39)
Adaptations to the cash flow hedge reserve	[22]	5	(45)
Fair value changes of financial assets	[17]	72	(110)
Share of other comprehensive income from companies valued at equity	[24]	6	(202)
Deferred taxes on items which may be reclassified to profit or loss	[11]	(11)	33
Other comprehensive income		(1,060)	(356)
Total comprehensive income		1,518	3,441
Profit attributable to non-controlling interests	[29]	(161)	(147)
hereof income statement	[29]	(192)	(170)
hereof other comprehensive income		31	24
Profit/loss attributable to owners of the parent		1,357	3,295

Earnings per share


in € million	2023	2022
Consolidated profit/loss	2,386	3,627
Dividend claim on additional tier 1	(109)	(92)
Profit/loss attributable to ordinary shares	2,277	3,534
Average number of ordinary shares outstanding in million	328	329
Earnings per share in €	6.93	10.76

As no conversion rights or options were outstanding, no dilution of earnings per share occurred. The dividend on additional

tier 1 capital is calculated; the effective payment is based on the decision of the Management Board at the respective payment

date.

44 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Statement of financial

position

Assets


in € million	Notes	2023	2022
Cash, balances at central banks and other demand deposits	[12]	43,234	53,683
Financial assets - amortized cost	[13]	139,302	137,431
Financial assets - fair value through other comprehensive income	[17, 23]	2,992	3,203
Non-trading financial assets - mandatorily fair value through profit/loss	[18, 23]	949	757
Financial assets - designated fair value through profit/loss	[19, 23]	185	84
Financial assets - held for trading	[20, 23]	5,783	6,411
Hedge accounting	[22]	1,160	1,608
Fair value adjustments of the hedged items in portfolio hedge of interest rate risk	[22]	(365)	(947)
Investments in subsidiaries and associates	[24]	820	713
Tangible fixed assets	[25]	1,672	1,684
Intangible fixed assets	[25]	970	903
Current tax assets	[11]	69	100
Deferred tax assets	[11]	218	269
Other assets	[26]	1,253	1,159
Total		198,241	207,057

Equity and liabilities


in € million	Notes	2023	2022
Financial liabilities - amortized cost	[15]	164,711	175,142
Financial liabilities - designated fair value through profit/loss	[19, 23]	1,088	950
Financial liabilities - held for trading	[21, 23]	8,463	8,453
Hedge accounting	[22]	1,466	2,054
Fair value adjustments of the hedged items in portfolio hedge of interest rate risk	[22]	(514)	(1,217)
Provisions for liabilities and charges	[27]	1,644	1,479
Current tax liabilities	[11]	242	181
Deferred tax liabilities	[11]	43	36
Other liabilities	[28]	1,248	1,215
Equity	[29]	19,849	18,764
Consolidated equity		17,009	16,027
Non-controlling interests		1,231	1,127
Additional tier 1		1,610	1,610
Total		198,241	207,057

Consolidated financial statements45

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Statement of changes in

equity


in € million	Subscribed capital	Capital reserves	Retained earnings	Cumulative other comprehensive income	Consolidated equity	Non- controlling interests	Additional tier 1	Total
Equity as at 1/1/2022	1,002	4,992	10,121	(3,272)	12,843	1,010	1,622	15,475
Capital increases/ decreases	0	0	0	0	0	0	0	0
Allocation dividend - AT1	0	0	(92)	0	(92)	0	92	0
Dividend payments	0	0	0	0	0	(26)	(92)	(119)
Own shares	(1)	(2)	0	0	(3)	0	(12)	(14)
Other changes	0	0	(19)	4	(15)	(4)	0	(19)
Total comprehensive income	0	0	3,627	(332)	3,295	147	0	3,441
Equity as at 31/12/2022	1,002	4,990	13,637	(3,601)	16,027	1,127	1,610	18,764
Impact of adopting IFRS 17	0	0	(47)	50	3	0	0	2
Equity as at 1/1/2023	1,002	4,990	13,590	(3,551)	16,030	1,126	1,610	18,767
Capital increases/ decreases	0	0	0	0	0	0	0	0
Allocation dividend - AT1	0	0	(109)	0	(109)	0	109	0
Dividend payments	0	0	(263)	0	(263)	(57)	(109)	(428)
Own shares	0	(1)	0	0	(1)	0	(1)	(2)
Other changes	0	0	(5)	0	(5)	0	0	(5)
Total comprehensive income	0	0	2,386	(1,029)	1,357	161	0	1,518
Equity as at 31/12/2023	1,002	4,988	15,600	(4,580)	17,009	1,231	1,610	19,849

46 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Statement of cash flows


in € million	Notes	2023	2022
Cash, balances at central banks and other demand deposits as at 1/1	[12]	53,683	38,557
Operating activities:
Profit/loss before tax		3,576	4,203
Adjustments for the reconciliation of profit/loss after tax to the cash flow from operating activities:
Depreciation, amortization, impairment and reversal of impairment on non-financial assets	[7, 8]	500	549
Net provisioning for liabilities and charges and impairment losses on financial assets	[6, 10, 27]	1,281	1,446
Gains/losses from the measurement and derecognition of assets and liabilities	[5, 8]	110	(430)
Current income from investments in associates	[3]	(85)	(64)
Other adjustments (net)¹		(5,516)	(3,899)
Subtotal		(134)	1,806
Changes in assets and liabilities arising from operating activities after corrections for non-cash positions:
Financial assets - amortized cost	[13]	(101)	(124)
Financial assets - fair value through other comprehensive income	[17, 23]	343	1,217
Non-trading financial assets - mandatorily fair value through profit/loss	[18, 23]	(9)	185
Financial assets - designated fair value through profit/loss	[19, 23]	(101)	184
Financial assets - held for trading	[20, 23]	(1,452)	853
Other assets	[26]	(32)	102
Financial liabilities - amortized cost	[15]	(6,224)	13,118
Financial liabilities - designated fair value through profit/loss	[19, 23]	181	(110)
Financial liabilities - held for trading	[21, 23]	1,303	9
Provisions for liabilities and charges	[27]	(475)	(210)
Other liabilities	[28]	(173)	33
Interest received	[1]	9,762	6,770
Interest paid	[1]	(4,086)	(2,049)
Dividends received	[2]	64	82
Income taxes paid	[11]	(834)	(896)
Net cash from operating activities		(1,967)	20,969
Investing activities:
Cash and cash equivalents from changes in scope of consolidation due to materiality		(6)	(9)
Payments for purchase of:
Investment securities and shares	[13, 16, 18, 24]	(9,171)	(6,692)
Tangible and intangible fixed assets	[25]	(592)	(484)
Subsidiaries		0	79
Proceeds from sale of:
Investment securities and shares	[13, 16, 18, 24]	2,971	2,451
Tangible and intangible fixed assets	[25]	176	155
Subsidiaries	[8]	0	31
Net cash from investing activities		(6,622)	(4,469)
Financing activities:
Capital decreases		(2)	(14)
Inflows subordinated financial liabilities	[15, 19]	0	520
Outflows subordinated financial liabilities	[15, 19]	(582)	(749)
Dividend payments		(429)	(119)
Cash flows for leases		(105)	(68)
Inflows from changes in non-controlling interests		0	0
Net cash from financing activities		(1,118)	(429)
Effect of exchange rate changes		(741)	(945)
Cash, balances at central banks and other demand deposits as at 30/9	[12]	43,234	53,683
1 Other (net) adjustments mainly include the deduction of net interest income and dividend income; the corresponding cash flows are shown under the items interest received, interest paid and dividends received.

Consolidated financial statements47

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Cash flows from operating activities, investing activities, and financing activities are presented in the cash flow statement in a

manner that best reflects RBI’s business operations. Cash flows from operating activities represent cash flows from the

significant revenue-generating activities of the company. The determination of cash flows from operating activities is done

using the indirect method, where the profit before taxes from the income statement is adjusted for non-cash items and

expanded by the cash flow changes in assets and liabilities. Additionally, expense and income items attributable to the

investment or financing activities are deducted. As a financial institution, RBI classifies paid interest, received interest, and

dividends as cash flows from operating activities.

The cash inflows and outflows for investment securities shown in the cash flow from investing activities include securities held

for long-term investment purposes, while those for shares include unconsolidated subsidiaries and associated companies.

Further information regarding cash, balances at central banks and other demand deposits can be found in note (12) Cash,

balances at central banks and other demand deposits. Details regarding the changes in subordinated financial liabilities

presented in the cash flow from financing activities can be found under note (15) Financial liabilities - amortized cost.

For RBI as a credit institution group, the informativeness of the cash flow statement is considered to be low. The cash flow

statement is not a tool for liquidity or financial planning. Additionally, it is not used as a steering instrument by the senior

management.

48 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Segment reporting

Segment classification

Segmentation principles

As a rule, internal management reporting at RBI is based on the current organizational structure. This matrix structure means

that each member of the Management Board is responsible both for individual countries and for specific business activities. A

cash generating unit (CGU) within the Group is a country. The presentation of the countries includes the operating units of RBI

in the respective countries (in addition to subsidiary banks, e.g. also leasing companies). Accordingly, the RBI management

bodies – Management Board and Supervisory Board – make key decisions that determine the resources allocated to any given

segment based on its financial strength and profitability, which is why these reporting criteria are a material component in the

decision-making process. The segments are also presented accordingly in compliance with IFRS 8. When assigning countries to

the individual reportable segments, in addition to long-term economic similarities such as equity risk premiums, potential

market growth and net interest margins, the expected risk and return levels are also taken into account when allocating

resources. According to IFRS 8.12, it is also required that the following economic characteristics are taken into account when

composing the reportable segments. The countries are combined into a reportable segment if the products and services

offered are the same. In addition to the uniform production processes and sales channels, the target groups such as corporate

customers, private customers and institutional customers are also similar in the individual segments. Banking regulations in

each country are mainly monitored by central banks. In all countries, the central bank is responsible for formulating and

implementing monetary policy, maintaining financial stability, and regulating the banking sector.The reconciliation contains

mainly the amounts resulting from the elimination of intra-group results and consolidation between the segments.

In order to achieve the maximum possible transparency and in the interest of clearer lines of reporting, five segments were

defined in accordance with the IFRS 8 thresholds. IFRS 8 establishes a 10 per cent threshold for the key figures of operating

income, profit after tax and segment assets.

Central Europe

This segment encompasses the most advanced banking markets in Central and Eastern Europe, namely the EU members,

Czech Republic, Hungary, Poland and Slovakia. In Poland, RBI is present with a reduced portfolio of retail foreign currency

mortgage loans. In Slovakia, RBI is active in the corporate and retail customer business, leasing, asset management and

building society business. In retail business, Tatra banka is pursuing a multi-brand strategy. In the Czech Republic, RBI operates

not only the traditional banking business with corporate and retail customers, but also real estate leasing and building society

business. In Hungary, the Group provides services to retail and corporate customers. The focus is based on corporate

customers and affluent retail customers.

Southeastern Europe

The Southeastern Europe segment comprises Albania, Bosnia and Herzegovina, Croatia, Kosovo, Romania, and Serbia. In these

markets, RBI is represented by banks and leasing companies, as well as own capital management and asset management

companies and pension funds in some markets. In Albania, financial services are offered across all business areas. In Kosovo,

RBI also offers a comprehensive product range. In Bosnia and Herzegovina, the emphasis is on small and medium-sized

enterprises, while also including a wide range of products for retail customers. In Croatia, the focus is on large and medium-

sized corporate customers and on retail customers (including pension funds business). In Romania, a broad range of financial

services is offered via a tightly knit branch network. In Serbia, the market is serviced by a universal bank and leasing

companies.

Consolidated financial statements49

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Eastern Europe

This segment comprises Belarus, Russia, and Ukraine. In Belarus, RBI is represented by a bank, a leasing company and an

insurance company. Raiffeisenbank Russia services both corporate and retail customers. Furthermore, RBI is active in Russia in

the issuance and in the leasing business. In Ukraine, RBI is represented by a bank and provides a full range of financial services

via a tightly knit local branch network.

Group Corporates & Markets

The Group Corporates & Markets segment covers operating business booked in Austria. This primarily comprises financing

business with Austrian and international corporate customers serviced from Vienna, Financial Institutions & Sovereigns, the

trading of equity instruments and capital market financing, and business with the institutions of the Raiffeisen Banking Group

(RBG). This segment also covers the capital market-based customer and proprietary business in Austria. Besides RBI AG, this

also includes financial services outsourced to subsidiaries, such as Vienna-based entities like Raiffeisen Digital Bank AG (digital

retail banking activities), Kathrein Privatbank Aktiengesellschaft, Raiffeisen Leasing Group, Raiffeisen Factor Bank AG,

Raiffeisen Bausparkasse Gesellschaft m.b.H., Valida Group (pension fund business) and Raiffeisen Kapitalanlage-Gesellschaft

mit beschränkter Haftung. In addition, companies valued at equity that are active in the financial services sector are allocated

to this segment: card complete Service Bank AG, Vienna, NOTARTREUHANDBANK AG, Vienna, Oesterreichische Kontrollbank AG,

Vienna, EMCOM Beteiligungs GmbH, Vienna, Posojilnica Bank eGen, Klagenfurt.

Corporate Center

The Corporate Center segment encompasses services in various areas provided by head office and joint service providers that

serve to implement the Group’s overall strategy and that are allocated to this segment to ensure comparability. Therefore, this

segment includes the following areas: Liquidity management and balance sheet structure management, equity participation

management, the banking operations carried out by head office for financing Group units, the Austrian and international

transaction and services business for financial services providers, as well as other companies outside the financial service

provider business that are not directly assigned to another segment e.g. real estate projects. Companies valued at equity that

are not active in the financial services sector are also assigned to this segment such as UNIQA Insurance Group AG, Vienna,

Raiffeisen Informatik GmbH & Co KG, Vienna, and LEIPNIK-LUNDENBURGER INVEST Beteiligungs Aktiengesellschaft, Vienna

(holding company with participations in the flour, mill, and vending segments).

Assessment of segment profit/loss

The segment reporting according to IFRS 8 shows the segment performance based on internal management reporting,

supplemented with the reconciliation of the segment results to the consolidated financial statements. In principle, RBI’s

management reporting is based on IFRS. Therefore, no differences occur in the recognition and measurement principles

between segment reporting and consolidated financial statements.

The governance of each segment is based on key indicators relating to profitability, efficiency, constraint and business mix

parameters. The target values of these key indicators are determined according to the specific market environment and

adapted when necessary.

Profitability

Profitability is measured by the return on equity (ROE) and return on risk-adjusted capital (RORAC) based on the internal

management systems. The return on equity shows the profitability of a CGU and is calculated as the ratio of profit/loss after

deduction of non-controlling interests to average consolidated equity employed. The return on equity reflects the yield of the

capital employed of each segment. The calculation of the RORAC incorporates risk-adjusted capital, which reflects the capital

necessary in case of possible unexpected losses. In RBI, this capital requirement is calculated within the economic capital model

for credit, market, and operational risk. This ratio shows the yield on the risk-adjusted equity (economic capital), but it is not an

indicator pursuant to IFRS. Within the different countries and business lines the actual RORAC generated is compared with the

respective predetermined minimal value (RORAC hurdle), which reflects appropriate market yield expectations.

Efficiency

The cost/income ratio represents the cost efficiency of the segment. The cost/income ratio shows general administrative

expenses in relation to operating income, which is the sum of net interest income, dividend income, current income from

investments in associates, net fee and commission income, net trading income and fair value result, net gains/losses from

hedge accounting and other net operating income.

50 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Constraints

In accordance with the Basel III framework, specific legal regulations are to be considered. The proportion of common equity

tier 1 capital to total risk-weighted assets (common equity tier 1 ratio) is for example an important indicator of whether the

underlying capital is adequate for the business volume. Industry sector specifics lead to different risk weights within the

calculation of risk-weighted assets according to CRR. These factors are crucial for the calculation of the regulatory minimum

total capital requirements. As part of the annual Supervisory Review and Evaluation Process (SREP), the ECB stipulates in a

notification that additional CET1 capital must be held in order to cover those risks which are not considered or are insufficiently

considered in Pillar I. Moreover, the efficient use of the available capital is calculated internally, whereby the actual usage is

compared to the theoretically available risk coverage capital. The long-term liquidity ratios are also restrictive and are defined

in accordance with the regulatory requirements. The minimum requirements for total capital and eligible liabilities (MREL)

result in restrictions on bank distributions (maximum distributable amount).

Business mix

The following key performance indicators are relevant in ensuring a reasonable and sustainable business structure, whereby

the composition of the result and the underlying portfolio parameters are of significance. The structure of the primary funding

basis for loans and advances to customers is measured by using the loan/deposit ratio. The net interest margin is calculated

based on average interest-bearing assets.

The presentation of segment performance is based on the income statement and geared to the reporting structure internally

used. Income and expenses are attributed primarily to the country and secondary to business area in which they are

generated. The segment reporting is thus shown by country and region, respectively. The segment result is shown up to the

profit/loss after deduction of non-controlling interests.

The segment assets are represented by the total assets and the risk-weighted assets. The reconciliation includes mainly the

amounts resulting from the elimination of intra-group results and consolidation between the segments. The income statement

is supplemented with financial ratios conventionally used within the industry to evaluate performance. The values shown in the

segment reporting are for the most part taken from the IFRS individual financial statements, which are also used for the

compilation of the consolidated financial statements. At head office, profit center results are taken from the internal

management income statement.

Consolidated financial statements51

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Segment reporting


2023	Central Europe	Southeastern Europe	Eastern Europe	Group Corporates & Markets
in € million	Central Europe	Southeastern Europe	Eastern Europe	Group Corporates & Markets
Net interest income	1,590	1,296	1,915	967
Dividend income	12	4	0	5
Current income from investments in associates	5	0	3	14
Net fee and commission income	578	456	1,364	578
Net trading income and fair value result	(16)	31	192	163
Net gains/losses from hedge accounting	(8)	0	(2)	(5)
Other net operating income	30	1	(32)	108
Operating income	2,191	1,789	3,441	1,831
General administrative expenses	(1,009)	(752)	(983)	(882)
Operating result	1,182	1,037	2,458	948
Other result	(887)	(31)	(10)	6
Governmental measures and compulsory contributions	(132)	(39)	(55)	(44)
Impairment losses on financial assets	(27)	(6)	(191)	(177)
Profit/loss before tax	135	961	2,203	733
Income taxes	(192)	(155)	(628)	(172)
Profit/loss after tax from continuing operations	(57)	806	1,575	561
Gains/losses from discontinued operations	0	0	0	0
Profit/loss after tax	(57)	806	1,575	561
Profit attributable to non-controlling interests	(128)	0	(52)	(13)
Profit/loss after deduction of non-controlling interests	(185)	805	1,522	549

Return on equity before tax	3.1 %	30.8 %	57.0 %	19.0 %
Return on equity after tax	–	25.9 %	40.7 %	14.5 %
Net interest margin (average interest-bearing assets)	2.49 %	4.26 %	6.84 %	1.53 %
Cost/income ratio	46.06 %	42.1 %	28.6 %	48.2 %
Loan/deposit ratio	82.33 %	68.0 %	40.8 %	172.0 %
Provisioning ratio (average loans to customers)	0.06 %	0.03 %	1.57 %	0.47 %
NPE ratio	1.2 %	1.8 %	2.1 %	3.0 %
NPE coverage ratio	58.4 %	66.6 %	73.6 %	35.6 %
Assets	65,006	34,035	27,611	60,131
Total risk-weighted assets (RWA)	24,631	16,379	20,481	25,938
Equity	4,321	3,819	5,464	4,509
Loans to customers	37,596	18,594	7,967	35,958
Deposits from customers	47,702	26,680	20,159	28,836
Business outlets	339	667	490	23
Employees as at reporting date (full-time equivalents)	9,778	12,535	16,885	3,536
Customers in million	4.0	5.0	7.1	2.5

52 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023


2023	Corporate Center	Reconciliation	Total
in € million	Corporate Center	Reconciliation	Total
Net interest income	(96)	10	5,683
Dividend income	758	(744)	35
Current income from investments in associates	63	0	85
Net fee and commission income	71	(7)	3,042
Net trading income and fair value result	(202)	18	186
Net gains/losses from hedge accounting	(6)	(6)	(28)
Other net operating income	159	(205)	62
Operating income	748	(934)	9,065
General administrative expenses	(483)	201	(3,908)
Operating result	265	(732)	5,158
Other result	19	(3)	(906)
Governmental measures and compulsory contributions	(13)	0	(284)
Impairment losses on financial assets	13	(4)	(393)
Profit/loss before tax	283	(739)	3,576
Income taxes	155	(5)	(997)
Profit/loss after tax from continuing operations	438	(744)	2,578
Gains/losses from discontinued operations	0	0	0
Profit/loss after tax	438	(744)	2,578
Profit attributable to non-controlling interests	0	1	(192)
Profit/loss after deduction of non-controlling interests	438	(743)	2,386

Return on equity before tax	–	–	19.8 %
Return on equity after tax	–	–	14.3 %
Net interest margin (average interest-bearing assets)	–	–	2.87 %
Cost/income ratio	–	–	43.1 %
Loan/deposit ratio	–	–	83.8 %
Provisioning ratio (average loans to customers)	–	–	0.34 %
NPE ratio	–	–	1.9 %
NPE coverage ratio	–	–	51.7 %
Assets	36,485	(25,028)	198,241
Total risk-weighted assets (RWA)	17,578	(11,344)	93,664
Equity	8,436	(6,698)	19,849
Loans to customers	989	(1,671)	99,434
Deposits from customers	766	(4,790)	119,353
Business outlets	–	–	1,519
Employees as at reporting date (full-time equivalents)	2,153	–	44,887
Customers in million	0.0	–	18.6

Consolidated financial statements53

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023


2022	Central Europe	Southeastern Europe	Eastern Europe	Group Corporates & Markets
in € million	Central Europe	Southeastern Europe	Eastern Europe	Group Corporates & Markets
Net interest income	1,341	943	2,025	733
Dividend income	3	8	0	12
Current income from investments in associates	4	0	6	6
Net fee and commission income	565	449	2,207	617
Net trading income and fair value result	0	(1)	471	141
Net gains/losses from hedge accounting	(5)	0	(29)	(17)
Other net operating income	39	10	(56)	110
Operating income	1,947	1,409	4,624	1,602
General administrative expenses	(909)	(699)	(954)	(765)
Operating result	1,037	711	3,670	837
Other result	(512)	(13)	(6)	3
Governmental measures and compulsory contributions	(137)	(42)	(66)	(54)
Impairment losses on financial assets	(12)	(70)	(743)	(122)
Profit/loss before tax	375	586	2,855	664
Income taxes	(153)	(83)	(619)	(148)
Profit/loss after tax from continuing operations	222	503	2,236	517
Gains/losses from discontinued operations	0	46	0	0
Profit/loss after tax	222	548	2,236	517
Profit attributable to non-controlling interests	(56)	0	(36)	(16)
Profit/loss after deduction of non-controlling interests	166	548	2,200	501

Return on equity before tax	9.7 %	18.9 %	88.1 %	17.2 %
Return on equity after tax	5.8 %	17.6 %	69.0 %	13.4 %
Net interest margin (average interest-bearing assets)	2.29 %	3.46 %	6.37 %	1.19 %
Cost/income ratio	46.7 %	49.6 %	20.6 %	47.8 %
Loan/deposit ratio	85.6 %	70.4 %	44.0 %	146.2 %
Provisioning ratio (average loans to customers)	0.02 %	0.42 %	3.90 %	0.32 %
NPE ratio	1.4 %	2.0 %	2.3 %	1.8 %
NPE coverage ratio	59.7 %	70.2 %	65.1 %	47.1 %
Assets	62,130	31,352	33,817	62,627
Total risk-weighted assets (RWA)	25,448	16,397	23,282	26,902
Equity	4,128	3,388	5,053	4,265
Loans to customers	37,707	17,839	11,340	37,115
Deposits from customers	45,700	25,253	25,847	31,631
Business outlets	343	729	569	23
Employees as at reporting date (full-time equivalents)	9,775	12,697	16,550	3,343
Customers in million1	3.7	4.9	7.0	2.4
1 Adjustment of the previous year's figures due to the inclusion of customers from the credit card business

54 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023


2022	Corporate Center	Reconciliation	Total
in € million	Corporate Center	Reconciliation	Total
Net interest income	(52)	62	5,053
Dividend income	387	(345)	64
Current income from investments in associates	48	0	64
Net fee and commission income	51	(11)	3,878
Net trading income and fair value result	9	44	663
Net gains/losses from hedge accounting	2	7	(41)
Other net operating income	103	(177)	29
Operating income	547	(420)	9,710
General administrative expenses	(395)	170	(3,552)
Operating result	152	(250)	6,158
Other result	(139)	(1)	(667)
Governmental measures and compulsory contributions	(38)	0	(337)
Impairment losses on financial assets	(19)	17	(949)
Profit/loss before tax	(43)	(234)	4,203
Income taxes	144	0	(859)
Profit/loss after tax from continuing operations	101	(234)	3,344
Gains/losses from discontinued operations	398	10	453
Profit/loss after tax	498	(224)	3,797
Profit attributable to non-controlling interests	0	(62)	(170)
Profit/loss after deduction of non-controlling interests	498	(286)	3,627

Return on equity before tax	–	–	26.6 %
Return on equity after tax	–	–	24.1 %
Net interest margin (average interest-bearing assets)	–	–	2.59 %
Cost/income ratio	–	–	36.6 %
Loan/deposit ratio	–	–	82.4 %
Provisioning ratio (average loans to customers)	–	–	0.73 %
NPE ratio	–	–	1.6 %
NPE coverage ratio	–	–	59.0 %
Assets	44,774	(27,642)	207,057
Total risk-weighted assets (RWA)	15,008	(9,357)	97,680
Equity	8,542	(6,612)	18,764
Loans to customers	1,016	(1,788)	103,230
Deposits from customers	1,043	(4,374)	125,099
Business outlets	–	–	1,664
Employees as at reporting date (full-time equivalents)	2,049	–	44,414
Customers in million1	0.0	–	18.1
1 Adjustment of the previous year's figures due to the inclusion of customers from the credit card business

Consolidated financial statements55

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

· Notes

Principles underlying the consolidated financial

statements

Principles of preparation

The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS)

published by the International Accounting Standards Board (IASB) and the international accounting standards adopted by the

EU on the basis of IAS Regulation (EC) 1606/2002 including the applicable interpretations of the International Financial reporting

Interpretations Committee (IFRIC/SIC). Standards and interpretations not yet applicable that have been published and

endorsed by the EU are outlined in the section standards and interpretations not yet applicable (already endorsed by the EU).

The consolidated financial statements also meet the requirements of § 245a of the Austrian Commercial Code (UGB) and § 59a

of the Austrian Banking Act (BWG) regarding exempting consolidated financial statements that comply with internationally

accepted accounting principles.

A financial asset is recognized when it is probable that the future economic benefits will flow to the company and the

acquisition or production costs, or another value can be reliably measured. A financial liability is recognized when it is probable

that an outflow of resources embodying economic benefits will result from the settlement of the obligation and the amount at

which the settlement will take place can be measured reliably. An exception are certain financial instruments which are

recognized at fair value at the reporting date. Provided that the underlying contracts do not fall within the scope of IFRS 9 or

IFRS 16, revenue is recognized if the conditions of IFRS 15 are met and if it is probable that the economic benefits will flow to the

Group and the amount of revenue can be measured reliably. These consolidated financial statements have been prepared on a

going concern.

The consolidated financial statements are based on the reporting packages of all fully consolidated Group members, which are

prepared according to IFRS rules and uniform Group standards. All material subsidiaries prepare their annual financial

statements as at and for the year ended 31 December. Some IFRS disclosures made outside the notes form an integral part of

the consolidated financial statements. These are mainly explanations on net income from segments, which are included in the

notes on segment reporting. Detailed notes on IFRS 7 are included under note (42) Credit risk, note (43) Market risk and note (44)

Liquidity management. This information is presented in accordance with IFRS 8 Operating Segments and IFRS 7 Financial

Instruments Disclosures respectively.

Classification and measurement of financial assets and financial liabilities

A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument

of another entity. On initial recognition, financial instruments are to be measured at fair value, which generally corresponds to

the transaction price at the time of acquisition or issue. If the Group unit determines that the fair value on initial recognition

differs from the transaction price, but this fair value measurement is not evidenced by a valuation technique that uses only

data from observable markets, then the carrying amount of the financial asset or financial liability on initial recognition is

adjusted to defer the difference between the fair value measurement and the transaction price. The deferred difference is

subsequently recognized as a gain or loss only to the extent that it arises from change in a factor (including time) that market

participants would consider in setting the price. According to IFRS 13, the fair value is defined as the exit price. For subsequent

measurement, financial instruments are recognized in the statement of financial position according to the respective

measurement category pursuant to IFRS 9, either at (amortized) cost or at fair value.

The classification of financial assets under IFRS 9 is firstly based on the business model under which the assets are managed,

and secondly on the cash flow characteristics of the assets. For RBI, this results in five classification categories for financial

assets:

· Financial assets measured at amortized cost (AC)

· Financial assets measured at fair value through other comprehensive income (FVOCI)

· Financial assets mandatorily measured at fair value through profit or loss (FVTPL)

· Financial assets designated fair value through profit or loss (FVTPL)

· Financial assets held for trading (HFT).

56 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Financial liabilities are generally recognized according to IFRS 9 at (amortized) cost (financial liabilities – amortized cost)

applying the effective interest method unless they are measured at fair value. This includes financial liabilities that are held for

trading (financial liabilities – held for trading) and designated as FVTPL (financial liabilities – designated fair value through

profit/loss). Changes in the fair value of liabilities designated at fair value through profit or loss which are caused by changes in

RBI’s own default risk are to be shown in other comprehensive income.

In accordance with IFRS 9, embedded derivatives are not separated from the host contract of a financial asset. Instead,

financial assets are classified in accordance with the business model and their contractual characteristics as explained in the

section business model assessment and in the section analysis of contractual cash flow characteristics. When recognizing

financial liabilities, embedded derivatives are only separated from the host instrument and separately accounted for as

derivatives if their economic characteristics and risks are not closely related to the economic characteristics and risks of the

host contract, the embedded derivative meets the definition of a derivative and the hybrid financial instrument is not

associated with a financial liability item that is held for trading or designated at fair value through profit or loss.

Further details on the classification and measurement of financial assets and financial liabilities can be found in the notes of

the respective items of the income statement and the statement of financial position.

Reclassification of financial assets

Reclassification is only possible for financial assets, not for financial liabilities. In RBI, a change in the measurement category is

only possible if there is a change in the business model used to manage a financial asset. Such changes are expected to occur

very rarely, are determined by the management following external or internal changes and must not only be significant for the

entity’s operations but also be capable of being proven to external parties. If these conditions apply, then the reclassification is

mandatory. If such a reclassification is necessary, this must be changed prospectively from the date of reclassification and

approved by the RBI Management Board.

Business model assessment

RBI reviews the objective of the business model under which a financial asset is managed at a portfolio level because this best

reflects the way the business is managed, and information is provided to management. The following factors are considered

as evidence when assessing which business model is relevant:

· How the performance of the business model (and the financial assets held within that business model) is assessed

and reported to the entity’s key management personnel

· The risks that affect the performance of the business model (and the financial assets held within that business

model) and the way those risks are managed

· How managers of the business are compensated – e.g. whether the compensation is based on the fair value of the

assets managed or the contractual cash flows collected

· The frequency, value, and timing of sales in prior periods, the reasons for such sales, and expectations about future

sales activity

· Whether sales activity and the collection of contractual cash flows are each integral or incidental to the business

model (hold-to-collect versus hold-and-sell business model).

Financial assets that are held for trading and those that are managed and whose performance is evaluated on a fair value

basis will be measured at fair value through profit or loss (FVTPL).

A business model’s objective can be to hold financial assets to collect contractual cash flows even when some sales of financial

assets have occurred or are expected to occur. For RBI, the following sales may be consistent with the hold-to collect business

model:

· The sales are due to an increase in the credit risk of a financial asset.

· The sales are infrequent (even if significant) or are insignificant individually and in aggregate (even if frequent).

· The sales take place close to the maturity of the financial asset and the proceeds from the sales approximate the

collection of the remaining contractual cash flows.

The number of sales in RBI is small, and like the volume of the sales out of the hold-to-collect business model, monitored over

time to have a documentation basis that respective sales are consistent with the hold-to-collect business model. The

judgement is made under reference to the rules of IFRS 9 which foresee that those sales out of the hold-to-collect business

model may be permissive in cases where the occur infrequently (even if significant in value) or insignificant in value both

individually and in aggregate (even if frequent).

Consolidated financial statements57

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Analysis of contractual cash flow characteristics

If RBI has decided that the business model of a specific portfolio is to hold the financial assets to collect the contractual cash

flows (or to both collect contractual cash flows and sell financial assets), it must assess whether the contractual terms of the

financial assets allocated to this portfolio result on specific dates in cash flows that are solely payments of principal and

interest on the principal amount outstanding. For this purpose, interest is defined as consideration for the time value of money

and for the credit risk associated with the principal amount outstanding during a particular period and for other basic lending

risks and costs, as well as a profit margin. This assessment will be carried out on an instrument-by-instrument basis on the

date of initial recognition of the financial asset.

In assessing whether the contractual cash flows are solely payments of principal and interest, RBI considers the contractual

terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the

timing or amount of contractual cash flows in such a way that this condition is no longer met. RBI considers amongst other

things:

· Prepayment or extension terms

· Leverage agreements

· Claim is limited to specified assets or cash flows

· Contractually linked instruments.

IFRS 9 includes regulations for prepayment features with negative compensation. Negative compensation arises where the

contractual terms permit the borrower to prepay the instrument before its contractual maturity, but the prepayment amount

could be less than unpaid amounts of principal and interest. However, to qualify for amortized cost measurement, the negative

compensation must be a reasonable compensation for early termination of the contract.

Modification of the time value of money and the benchmark test

The time value of money is the element of interest that provides consideration for only the passage of time. It does not take

other risks (credit, liquidity etc.) or costs (administrative etc.) associated with holding a financial asset into account. In some

cases, the time value of money element is modified (referred to as imperfect). This would be the case, for example, if a

financial asset’s interest rate is periodically adjusted but the frequency of the interest rate adjustment does not match the

tenor of the interest rate. In this case units must assess the modification as to whether the contractual cash flows represent

solely payments of principal and interest, i.e. the modification term may not significantly alter the cash flows from a perfect

benchmark instrument.

RBI has developed a quantitative benchmark test to assess whether the cash flow condition has been met. This test

determines whether the undiscounted modified contractual cash flows differ significantly from the undiscounted cash flows of

a benchmark instrument. The benchmark instrument is equivalent to the tested asset in all respects except for the modified

interest components. At the time when the transaction is initially entered, the quantitative benchmark test is performed using

1,000 forward-looking simulations of future market interest rates over the life of the financial asset. The test assumes a

normal distribution of interest rates using the single-factor Hull-White model when simulating the scenarios. To pass the

quantitative benchmark test, the financial asset being tested must not exceed two significance thresholds. The significance

thresholds are established as the quotient of the simulated cash flows from the modified interest rate components and the

benchmark instrument. The quotient must not exceed 10 per cent over a reporting period (three months) or 5 per cent over the

entire life of the financial asset being tested. If one of these two significance thresholds is exceeded, the financial asset will

have failed the benchmark test and must be measured at fair value through profit or loss.

A benchmark test is applied for the following main contractual features that can potentially modify the time value of money:

· Reset rate frequency does not match interest tenor

· Lagging indicator

· Smoothing clause

· Grace period

· Secondary market yield reference (UDRB: Average government bond yields weighted by outstanding amounts).

58 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Relationships between items of the statement of financial position and

measurement criteria


	Measurement
Assets/liabilities	Fair value	Amortized cost
Asset classes
Cash, balances at central banks and other demand deposits		x
Financial assets - amortized cost		x
hereof loans from finance lease		x
Financial assets - fair value through other comprehensive income	x
Non-trading financial assets - mandatorily fair value through profit/loss	x
Financial assets - designated fair value through profit/loss	x
Financial assets - held for trading	x
Hedge accounting	x
Liability classes
Financial liabilities - amortized cost		x
hereof liabilities from finance lease		x
Financial liabilities - designated fair value through profit/loss	x
Financial liabilities - held for trading	x
Hedge accounting	x

Key sources of estimation uncertainty and critical accounting judgments

If estimates or assessments are necessary for accounting and measuring according to IAS/IFRS, they are made in accordance

with the respective standards. They are based on past experiences and other factors, such as planning and expectations or

forecasts of future events that appear likely, based on current judgement. The estimates and underlying assumptions are

reviewed on an ongoing basis. Alterations to estimates that affect only one period will be considered only in that period. If the

following reporting periods are also affected, the alterations will be taken into consideration in the current and following

periods. The assumptions, estimates and accounting judgment mainly related to expected credit losses, the fair value and

impairment calculation of financial instruments, deferred tax assets, provisions for pensions and similar obligations, provisions

for litigation as well as the goodwill impairment test and immaterial assets capitalized during initial consolidation. The actual

values can deviate from the estimated values.

Additionally, in the light of the geopolitical situation RBI is exposed to increased risks related to foreign currency translation.

Details can be found in the chapter exchange differences.

Impairment in the lending business

RBI ascertains on a forward-looking basis the expected credit losses (ECL) associated with its debt instrument assets carried at

amortized cost and fair value through other comprehensive income and with the exposure arising from loan commitments,

leasing receivables and financial guarantee contracts. The calculation of expected credit losses (ECL) requires the use of

estimates that may not necessarily match actual results. In order to determine the amount of the impairment, significant

credit risk parameters such as PD (Probability of Default), LGD (Loss Given Default) and EAD (Exposure at Default) as well as

forward-looking information (economic forecasts) are to be estimated by management. The expected credit losses are

adjusted at each reporting date. IFRS 9 requires the assessment if a significant increase in credit risk exists, without providing

detailed guidance. Consequently, specific rules for the assessment have been defined, which consist of both qualitative

information and quantitative thresholds. The methods for determining the amount of the impairment are explained in the

section impairment general (IFRS 9). Quantitative information and sensitivity analyses are presented in the notes under (31).

Judgement is required when calculating expected credit losses, especially when considering risks that are not adequately

reflected in the models, such as overlays and other risk factors for sanction and geopolitical risks.

Consolidated financial statements59

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Fair value of financial instruments

Fair value is the price received for the sale of an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date. This applies regardless of whether the price can be directly observed or has been

estimated on the basis of a measurement method. In determining the fair value of an asset or liability, the Group considers

certain features of the asset or liability (e.g. condition and location of the asset, or restrictions in the sale and use of an asset)

if market participants would also consider such features in determining the price for the acquisition of the respective asset or

for the transfer of the liability at the measurement date. Where the market for a financial instrument is not active, fair value is

established using a valuation technique or pricing model. For valuation methods and models, estimates are generally used

depending on the complexity of the instrument and the availability of market-based data. The input parameters for these

models are derived from observable market data where possible, nevertheless non-observable market data are required in

many cases. Under certain circumstances, valuation adjustments are necessary to account for other factors such as model risk,

liquidity risk or credit risk. The valuation models are described in the notes in the section on classification and measurement of

financial assets and financial liabilities. In addition, the fair values of financial instruments are disclosed in the notes under (23)

Fair value of financial instruments.

Provisions for litigation

Provisions are recognized when the Group has a present obligation from a past event, where it is likely that it will be obliged to

settle, and an estimate of the amount is possible. The level of provisions is the best possible estimate of expected outflow of

economic benefits at the reporting date while considering the risks and uncertainties underlying the commitment to fulfill the

obligation. Risks and uncertainties are taken into consideration when making estimates. In some cases, lawsuits are filed by a

number of retail customers. The measurement of the provision in such cases is based on a statistical approach. These

approaches consider both static data, where relevant, and expert opinions, especially in connection with the lawsuits and

losses expected in the future. Additional details are available under (46) Pending legal issues.

Provision for pensions and similar obligations

The cost of the defined benefit pension plan is determined using an actuarial valuation. The actuarial valuation involves

making assumptions about future salary increases, mortality rates and future pension increases. Considerable accounting

judgement is to be exercised in this connection in determining the criteria. Mercer´s interest rate recommendation is used to

determine the discount rate from which expected returns are derived. The main criteria for the selection of such corporate

bonds are the issuance volumes of the bonds, the quality of the bonds and the identification of outliers, which are not

considered. Assumptions and estimates used for the long-term defined benefit obligation calculations are described in the

section on pension obligations and other termination benefits. Quantitative information on long-term employee provisions is

disclosed in the notes under (27) Provisions.

Deferred tax assets

Deferred tax assets are recognized only to the extent that it is probable that in the future sufficient taxable profit will be

available against which those tax loss carry forwards, tax credits or deductible temporary differences can be utilized. A

planning period of five years is used to this purpose. Such a period allows for a reliable estimate of the tax result based on

planning. This assessment requires significant judgments and assumptions to be made by management. In determining the

deferred tax assets, the management uses historical tax capacity and profitability information and, if relevant, forecasted

operating results based upon approved business plans, including a review of the eligible carry-forward period.

Analysis of contractual cash flow characteristics

In addition to the business model test, a test of a financial asset’s cash flows is also necessary to allocate it to the

measurement categories at amortized cost or at fair value through other comprehensive income. In order to pass the

contractual cash flow characteristics test, the asset’s contractual cash flows must consist solely of payments of principal and

interest on the principal amount outstanding. This analysis of whether contractual cash flows of financial assets consist solely

of interest and principal payments involves critical judgments. At RBI, these judgments are mainly applied to loans with

mismatched interest components, considering the individual contractual features of financial assets. In order to be able to

assess whether a financial asset passes the cash flow characteristics test, a benchmark test is necessary in some

circumstances to evaluate a changed element for the time value of money.

60 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Goodwill impairment test

All goodwill is tested each year with respect to its future economic benefits based on cash-generating units. An impairment

test is conducted as of the reporting date if indications of possible impairment arise during the financial year. In the course of

the impairment test, significant judgments, assumptions and estimates are required, in particular with regard to the timing

and amount of future expected cash flows and the discount rate. For additional information, see (8) Other result and (25)

Tangible fixed assets and intangible fixed assets.

Impairment testing of companies valued at equity

The carrying amounts of companies valued at equity must be tested for impairment if there are objective indications of

impairment. At the end of each reporting period, an assessment is made as to whether there is any indication that the carrying

amount of an investment exceeds its recoverable amount. IAS 36 contains a list of internal and external indicators that are

considered as indications of impairment. If an indication arises that an entity valued at equity may be impaired, the

recoverable amount of the asset is calculated. The significant judgments and estimates in connection with the impairment

test relate particularly to the discount rate, the planning assumptions, and the future expected cash flows. Details can be

found under (24) Investments in subsidiaries and associates.

Application of new and revised standards

Unless otherwise stated, the application of the following standards and interpretations is not currently expected to have any

material impact on RBI.

Amendments to IAS 1 (Disclosure of Accounting Policies; effective date: 1 January 2023)

Starting from 1 January 2023 only material accounting policies are to be disclosed in the notes. The amendments to this

standard consist majorly of changes in wording, which should lead to more clarity and unity in application.

Amendments to IAS 8 (Definition of Accounting Estimates; effective date: 1 January

2023)

The aim of this amendment is to clarify the distinction between changes in accounting policies (retrospective changes) and

changes in accounting estimates (prospective changes). An accounting estimation is always based on a valuation uncertainty

of financial balances in the financial statements. Changes in measurement techniques to calculate an estimate represent

changes in accounting estimates, if they do not result from the correction of prior period errors.

Amendments to IAS 12 (Deferred Tax arising from a Single Transaction; effective date:

1 January 2023)

The main change in deferred tax related to assets and liabilities arising from a single transaction is to narrow the scope of the

initial recognition exemption provided in IAS 12.15(b) and IAS 12.24. Accordingly, the initial recognition exemption does not apply

to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. This is also

explained in the newly inserted paragraph IAS 12.22A.

Amendment to IAS 12 (International Tax Reform - Pillar 2 Model Rules, effective date:

1 January 2023)

This amendment is intended to create a temporary exception for the recognition of deferred taxes if they arise from income

taxes in connection with the Pillar 2 model rules. It also introduces targeted disclosure requirements to help investors better

understand the impact of supplementary taxes on the company resulting from the reform, in particular before the country-

specific legislation implementing the minimum taxation comes into force. RBI has applied this exception for the first time

during the current financial year. For details please refer to note (11) Taxes.

IFRS 17 (Insurance Contracts; effective date: 1 January 2023)

IFRS 17 covers recognition and measurement, presentation and disclosure of insurance contracts. The aim of IFRS 17 consists of

provision of relevant information by the financial statement preparing companies and thus a credible presentation of

insurance contracts. This information should be the basis for users of financial statements to accurately evaluate the impact

of insurance contracts on the financial position, financial performance and cash flows of companies. On adopting of IFRS 17,

RBI’s equity increased by € 2 million as at 1 January 2023.

Consolidated financial statements61

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Standards and interpretations not yet applicable (already endorsed by the

EU)

The following new or amended standards and interpretations, which have been adopted, but are not yet mandatory, have not

been applied early. Unless otherwise stated, the application of the following standards and interpretations is currently not

expected to have any material impact on RBI.

Amendment to IAS 1 (Classification of liabilities as current or non-current; effective

date: 1 January 2024)

The amendments to IAS 1 are intended to clarify the criteria for classifying liabilities as current or non-current. In future, only

rights that exist at the end of the reporting period are to be decisive for the classification of a liability. In addition,

supplementary guidelines for the interpretation of the criteria of the right to defer settlement of the liability by at least twelve

months as well as explanatory notes on the fulfillment criteria were added.

Amendment to IAS 1 (Non-current liabilities with covenants; effective date: 1 January

2024)

The amendments to IAS 1 clarify with regard to the classification of liabilities as current or non-current that only covenants

that an entity must fulfil on or before the reporting date affect this classification. However, an entity must disclose

information in the notes that enables users of financial statements to understand the risk that non-current liabilities with

covenants could become repayable within twelve months.

Amendment to IFRS 16 (Lease Liability in a Sale and Leaseback Transaction; effective

date: 1 January 2024)

The amendment contains requirements for the subsequent measurement of leases in the context of a sale and leaseback (SLB)

for seller-lessees. This is primarily intended to standardize the subsequent measurement of lease liabilities to prevent

inappropriate profit realization. In principle, the amendment means that the payments expected at the beginning of the term

are to be considered in the subsequent measurement of lease liabilities as part of an SLB. In each period, the lease liability is

reduced by the expected payments and the difference to the actual payments is recognized in profit or loss statement.

Standards and interpretations not yet applicable (not yet endorsed by the

EU)

Amendment to IAS 7 and IFRS 7 (Supplier Finance Arrangements; effective date:

1 January 2024)

The amendment aims to improve transparency with regard to the effects of supplier financing arrangements on an entity's

liabilities, cash flows and liquidity risk. For this purpose, existing disclosure requirements are supplemented by additional and

mandatory qualitative and quantitative disclosures.

Amendment to IAS 21 (Non-exchangeability of foreign currencies; effective date:

1 January 2025)

The amendment clarifies how an entity should assess whether a currency is exchangeable into another currency. Additionally,

the amendment clarifies the determination of the exchange rate to be used and the required disclosures in the notes if the

previous assessment has determined that the exchangeability of a currency is not given.

62 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Exchange differences

The consolidated financial statements of RBI were prepared in euro which is the functional currency of RBI AG. The functional

currency is the currency of the principal economic environment in which the company operates. Each entity within the Group

determines its own functional currency taking all factors listed in IAS 21 into account. All financial statements of fully

consolidated companies prepared in a functional currency other than euro were translated into the reporting currency euro

employing the modified closing rate method in accordance with IAS 21. Equity was translated at its historical exchange rates

while all other assets, liabilities and the notes were translated at the prevailing foreign exchange rates as at the reporting

date. Differences arising from the translation of equity (historical exchange rates) are offset against retained earnings.

The income statement items were translated at the average exchange rates during the year calculated on the basis of

monthend rates. Differences arising between the exchange rate as at the reporting date and the average exchange rate

applied in the income statement were offset against equity (cumulative other comprehensive income).

Accumulated exchange differences are reclassified from the item exchange differences shown in other comprehensive income

to the income statement under net income from deconsolidation, in the event of a disposal of a foreign business operation

which leads to loss of control, joint management or significant influence over this business operation. In the case of one

subsidiary headquartered in the euro area, the Russian ruble is the reporting currency for measurement purposes given the

economic substance of the underlying transactions.


	2023		2022
	As at	Average	As at	Average
Rates in units per €	31/12	1/1-31/12	31/12	1/1-31/12
Albanian lek (ALL)	103.880	108.872	114.230	118.870
Belarusian-ruble (BYN)	3.536	3.242	2.916	2.755
Bosnian marka (BAM)	1.956	1.956	1.956	1.956
Bulgarian lev (BGN)	1.956	1.956	1.956	1.956
Croatian kuna (HRK)	—	—	7.535	7.538
Polish zloty (PLN)	4.340	4.535	4.681	4.680
Romanian leu (RON)	4.976	4.951	4.950	4.935
Russian ruble (RUB)	99.137	91.770	77.789	72.644
Serbian dinar (RSD)	117.174	117.251	117.322	117.476
Czech koruna (CZK)	24.724	23.982	24.116	24.562
Ukrainian hryvnia (UAH)	42.208	39.706	38.951	34.146
Hungarian forint (HUF)	382.800	382.135	400.870	391.271
US dollar (USD)	1.105	1.082	1.067	1.056

In the context of the geopolitical situation, RBI is exposed to increased risks related to foreign currency translations. The ECB

stopped publishing an official EUR/RUB exchange rate in March 2022 and an actual and factually achievable exchange rate (e.g.

provided by Refinitiv or Electronic Broking Service (EBS): off-shore rate) established itself in addition to the theoretical, official

exchange rate (rate determined by the Russian central bank on the basis of data from the Moscow Stock Exchange: on-shore

rate).

RBI is exposed to these risks particularly in the translation of monetary items denominated in a foreign currency and in the

translation of fully consolidated foreign business operations. According to IAS 21, the respective closing rate is to be used when

translating monetary items into the functional currency. The closing rate is in turn defined as the exchange rate that would

apply if the transaction were executed immediately. In particular, it must be taken into account whether an officially quoted

price is available on the closing date and whether it is available for immediate settlement. If multiple exchange rates are

available, the exchange rate at which the future cash flows from the transaction could have been settled on the balance sheet

date is to be used in accordance with IAS 21.26. In summary, RBI has concluded that this rate would have been to the most part

the off-shore rate, which is therefore used in the currency translation as at 31 December 2023. RBI does not hold any material

positions in Belarusian ruble and Ukrainian hryvnia outside of these two countries.

RBI has subsidiaries that report in a functional currency other than the Group’s presentation currency. The translation of fully

consolidated foreign operations into the reporting currency of RBI must be carried out in accordance with IAS 21.39:

· At the closing rate at the reporting date (assets and liabilities)

· At the exchange rate at the time of the respective transactions or, for practical reasons, at an appropriate average

rate (income and expenses).

For this purpose, as with the translation of foreign currency transactions, the determination of suitable exchange rates is

necessary. Usually, the exchange rate used for this purpose is the one that would be applied when converting dividends from

the foreign business operation or for any capital repatriations. Due to the government restrictions introduced in Russia, RBI

assumes that cash inflows from foreign business operations in Russia could not be converted at the official exchange rate of

the Russian central bank or that of the Moscow Stock Exchange as at the balance sheet date, rather, the actual and factually

Consolidated financial statements63

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

achievable rate would be applied. In transactions with international banks, the off-shore rate is usually used for this purpose;

accordingly, the foreign business operation in Russia was translated at this rate on the balance sheet date. As at 31 December

2023, the EUR/RUB exchange rate used by RBI (off-shore rate) was 99.14 and that of the Russian Central Bank (on-shore rate)

was 99.19. For the Belarusian ruble and the Ukrainian hryvnia, the rates published by the respective central bank continued to

be considered suitable rates by RBI. However, due to the small size of the foreign operations in these countries (see chapter risk

report), RBI is only exposed to a limited risk regarding foreign currency translation.

RBI addresses the challenging conditions in the geopolitical environment and the resulting changes in the currency markets

with ongoing monitoring of the estimates and assumptions presented here. In connection with similar circumstances, the IFRIC

explicitly pointed out in its meeting on September 2018 (IFRIC Update 09-18) that companies in such a market environment

must examine on an ongoing basis and on each balance sheet date whether the exchange rate used represents the correct

rate in accordance with IAS 21.

Consolidated group


	Fully consolidated
Number of units	2023	2022
As at beginning of period	192	204
Included for the first time in the financial period	8	7
Merged in the financial period	(2)	(4)
Excluded in the financial period	(6)	(15)
As at end of period	192	192
Domicile in Austria	113	108
Domicile abroad	79	84
Banks	18	19
Financial institutions	111	118
Companies rendering bank-related ancillary services	11	10
Financial holding companies	6	5
Other	46	40

Included units


Company, domicile (country)	Share	Included as of	Reason
Companies rendering bank-related ancillary services
RBI Retail Innovation GmbH, Vienna (AT)	100.0%	1/1	Materiality
Limited Liability Company RB-Digital, Moscow (RU)	100.0%	13/7	Foundation
Other companies
Neu-Marx Holding Eins GmbH & Co KG, Vienna (AT)	100.0%	1/1	Materiality
Neu-Marx Holding Zwei GmbH & Co KG, Vienna (AT)	100.0%	1/1	Materiality
Neu-Marx Immobilien Eins GmbH & Co KG, Vienna (AT)	100.0%	1/1	Materiality
Neu-Marx Immobilien Zwei GmbH & Co KG, Vienna (AT)	100.0%	1/1	Materiality
INFRA MI 1 Immobilien Gesellschaft mbH, Vienna (AT)	100.0%	1/1	Materiality
Raiffeisen WohnBau Zwei GmbH, Vienna (AT)	100.0%	1/1	Materiality

Excluded units


Company, domicile (country)	Share	Excluded as of	Reason
Banks
RBA Banka a.d., Novi Sad (former Crédit Agricole Srbija AD) (RS)	100.0 %	30/4	Merger
Financial institutions
DOROS Raiffeisen-Immobilien-Leasing GmbH, Vienna (AT)	100.0 %	1/10	Sale
Equa Sales & Distribution s.r.o., Praha (CZ)	75.0 %	1/5	Materiality
Health Resort RBI Immobilien-Leasing GmbH, Vienna (AT)	75.0 %	1/12	Sale
Orestes Immobilienleasing GmbH & Co. Projekt Wiesbaden KG, Kriftel (DE)	6.0 %	1/2	Materiality
Ostarrichi Immobilienleasing GmbH & Co. Projekt Langenbach KG, Kriftel (DE)	100.0 %	1/3	Materiality
Raiffeisen consulting d.o.o., Zagreb (HR)	100.0 %	1/12	Merger
Raiffeisen-Leasing Litauen UAB, Vilnius (LT)	92.3 %	1/7	Sale

64 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Consequences and analysis of the armed conflict between Russia and

Ukraine

Going Concern

The RBI Board of Management has prepared the consolidated financial statements as at 31 December 2023 on a going concern

basis as they do not intend to liquidate RBI and based on current available information this is considered a realistic intention.

Planning continues to indicate that RBI has the required economic resources to be able to meet ongoing regulatory

requirements as well as being able to fund business and liquidity needs (liquidity and funding profile, including forecasts of

internal liquidity metrics and regulatory liquidity coverage ratios). The most recent internally generated stress testing scenarios

for liquidity and capital requirements have shown that RBI has adequate resources to withstand reasonably possible downside

scenarios. Additionally, RBI has robust systems in place to mitigate the operational disruption of doing business in a warzone

including the threat of cyberattacks.

The RBI Board of Management has concluded that there are no material uncertainties that could cast significant doubt over

their ability to continue as a going concern for at least a year from the date of approval, 12 February 2024, of the annual report

to be issued.

Control event

The economic and political environment due to the war may indicate changes in the ability of an investor to control

subsidiaries according to IFRS 10 in the affected areas. For RBI, especially Ukraine, Russia and Belarus can be counted among

the affected areas.

In assessing control, RBI`s examination includes if it is exposed, or has rights, to variable returns from its involvement with the

investee and has the ability to affect those returns through its power over the investee according to the requirements of IFRS

10. If voting rights are relevant, RBI has control over an entity in which it directly or indirectly holds more than 50 per cent of the

voting rights, except when there are indicators that another investee has the ability to determine unilaterally the relevant

activities of the entity. RBI assesses evidence of control in cases in which it does not hold the majority of voting rights but has

the ability to unilaterally govern the relevant activities of the entity. This ability may occur in cases in which RBI has the ability

to control the relevant activities due to the extent and distribution of voting rights of the investees. If facts and circumstances

indicate that there are changes to one or more elements of control, a reassessment whether control over the investee still

exists is done.

When examining the facts and circumstances RBI carefully considers whether there have been changes that may significantly

limit its ability to exercise the rights or governance provisions with respect to a subsidiary due to the war or the sanctions

imposed. RBI has concluded that no changes are necessary in the assessment of control and that control was not lost over the

subsidiaries in the affected areas.

Pro forma representation of the profit and loss statement and balance sheet

excluding Russia

The tables below show the pro-forma profit and loss as well as the balance sheet for RBI excluding Russian operations. Due to

the capital controls imposed by Russia the higher levels of regulatory capital in Russia can not be used for regulatory capital

purposes in the rest of the group. The pro-forma CET 1 ratio excluding Russian operations under the assumption that the

deconsolidation takes place with a price book value of zero would amount to 14.6 per cent compared to 17.3 per cent including

Russian operations.

Consolidated financial statements65

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023


	RBI		Contribution Russia1		RBI excluding Russia
in € million	2023	2022	2023	2022	2023	2022
Net interest income	5,683	5,053	1,314	1,528	4,369	3,525
Dividend income	35	64	0	0	35	64
Current income from investments in associates	85	64	3	6	82	58
Net fee and commission income	3,042	3,878	1,182	2,023	1,859	1,855
Net trading income and fair value result	186	663	131	372	55	291
Net gains/losses from hedge accounting	(28)	(41)	(2)	(29)	(26)	(12)
Other net operating income	62	29	(25)	(37)	87	66
Operating income	9,065	9,710	2,603	3,863	6,462	5,847
Staff expenses	(2,209)	(2,010)	(580)	(533)	(1,629)	(1,477)
Other administrative expenses	(1,224)	(1,081)	(95)	(106)	(1,129)	(976)
Depreciation	(475)	(461)	(41)	(50)	(434)	(411)
General administrative expenses	(3,908)	(3,552)	(715)	(688)	(3,192)	(2,864)
Operating result	5,158	6,158	1,888	3,175	3,270	2,983
Other result	(906)	(667)	(8)	(7)	(898)	(660)
Governmental measures and compulsory contributions	(284)	(337)	(42)	(54)	(242)	(284)
Impairment losses on financial assets	(393)	(949)	(95)	(471)	(298)	(479)
Profit/loss before tax	3,576	4,203	1,743	2,643	1,832	1,560
Income taxes	(997)	(859)	(464)	(559)	(533)	(300)
Profit/loss after tax from continuing operations	2,578	3,344	1,279	2,084	1,299	1,260
Gains/losses from discontinued operations	0	453	0	0	0	453
Profit/loss after tax	2,578	3,797	1,279	2,084	1,299	1,713
Profit attributable to non-controlling interests	(192)	(170)	0	0	(192)	(170)
Consolidated profit/loss	2,386	3,627	1,279	2,084	1,107	1,542
1 The contribution of Russia is defined as contribution to the Group and therefore deviates from the country results presented in the country view.


	RBI		Contribution Russia		RBI excluding Russia
Assets in € million	2023	2022	2023	2022	2023	2022
Cash, balances at central banks and other demand deposits	43,234	53,683	6,695	8,613	36,540	45,070
Financial assets - amortized cost	139,302	137,431	10,305	12,980	128,998	124,451
Financial assets - fair value through other comprehensive income	2,992	3,203	3	2	2,988	3,200
Non-trading financial assets - mandatorily fair value through profit/loss	949	757	1	1	948	756
Financial assets - designated fair value through profit/loss	185	84	0	0	185	84
Financial assets - held for trading	5,783	6,411	48	54	5,735	6,357
Hedge accounting	1,160	1,608	10	8	1,150	1,600
Fair value adjustments of the hedged items in portfolio hedge of interest rate risk	(365)	(947)	(65)	(185)	(300)	(762)
Investments in subsidiaries and associates	820	713	1	1	819	712
Tangible fixed assets	1,672	1,684	185	154	1,486	1,530
Intangible fixed assets	970	903	70	54	900	849
Current tax assets	69	100	5	10	64	90
Deferred tax assets	218	269	111	141	107	128
Other assets	1,253	1,159	102	107	1,151	1,052
Total	198,241	207,057	17,471	21,938	180,769	185,119

66 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023


	RBI		Contribution Russia		RBI excluding Russia
Equity and liabilities in € million	2023	2022	2023	2022	2023	2022
Financial liabilities - amortized cost	164,711	175,142	12,656	17,425	152,054	157,717
Financial liabilities - designated fair value through profit/loss	1,088	950	1	1	1,088	949
Financial liabilities - held for trading	8,463	8,453	24	(23)	8,439	8,476
Hedge accounting	1,466	2,054	39	0	1,426	2,054
Fair value adjustments of the hedged items in portfolio hedge of interest rate risk	(514)	(1,217)	(45)	(63)	(469)	(1,154)
Provisions for liabilities and charges	1,644	1,479	248	223	1,396	1,255
Current tax liabilities	242	181	35	77	207	104
Deferred tax liabilities	43	36	6	9	37	27
Other liabilities	1,248	1,215	57	151	1,192	1,064
Equity	19,849	18,764	4,450	4,138	15,400	14,626
Consolidated equity	17,009	16,027	4,450	4,138	12,559	11,889
Non-controlling interests	1,231	1,127	0	0	1,231	1,127
Additional tier 1	1,610	1,610	0	0	1,610	1,610
Total	198,241	207,057	17,471	21,938	180,769	185,119

Concentration risk

Since the outbreak of war in Ukraine, RBI`s activities in Russia, Ukraine, and Belarus have been exposed to increased risk. The

heightened risk is driven by several factors such as the destruction of livelihoods and infrastructure in Ukraine as well as the

loss and blockading of ports, sanctions imposed on Russia, uncertainty about the length of the war and price instability and

economic contraction in Eastern Europe. The exposure to Russia, Ukraine and Belarus is presented in the tables below.

The first table shows the split of the net carrying amount of loans and advances and debt securities based on IFRS

measurement categories as well as the nominal of the off-balance exposure after impairments. The second table shows the

concentration risk on counterparty level, whereby derivatives of the trading book are shown separately. Both tables are based

on the country segmentation in accordance with IFRS 8.


	2023				2022
in € million	Russia	Ukraine	Belarus	Total	Russia	Ukraine	Belarus	Total
Financial assets - amortized cost	12,431	3,049	871	16,351	15,937	3,041	1,174	20,153
Financial assets - fair value through other comprehensive income	3	400	1	404	2	119	131	253
Non-trading financial assets - mandatorily fair value through profit/loss	3	0	0	3	2	0	0	2
Financial assets - designated fair value through profit/loss	0	0	0	0	0	0	0	0
Financial assets - held for trading	70	178	0	249	304	164	5	473
On-balance	12,508	3,628	872	17,008	16,245	3,325	1,310	20,880
Loan commitments, financial guarantees and other commitments	2,587	807	391	3,785	3,294	770	369	4,433
Total	15,095	4,435	1,263	20,793	19,539	4,095	1,679	25,313


	2023				2022
in € million	Russia	Ukraine	Belarus	Total	Russia	Ukraine	Belarus	Total
Derivatives	62	4	0	66	244	8	0	252
Central banks	250	823	0	1,073	732	774	0	1,506
General governments	188	1,229	133	1,550	212	655	262	1,130
Banks	5,855	269	46	6,169	5,758	260	320	6,337
Other financial corporations	210	56	10	275	642	52	1	694
Non-financial corporations	3,380	1,121	466	4,968	4,799	1,433	467	6,699
Households	2,564	126	216	2,906	3,859	142	260	4,261
On-balance	12,508	3,628	872	17,008	16,245	3,325	1,310	20,880
Loan commitments, financial guarantees and other commitments	2,587	807	391	3,785	3,294	770	369	4,433
Total	15,095	4,435	1,263	20,793	19,539	4,095	1,679	25,313

Consolidated financial statements67

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Valuation of collateral in Ukraine

In Ukraine, there were many difficulties in determining the market value of collateral since the beginning of the war. These are

on the one hand physical restrictions in some regions on the ability to conduct visual inspections and determine the potential

level of damage and on the other hand the uncertainty about market development and transactions. For these reasons in

occupied regions non-eligible status was applied and in regions with high risk of hostility or occupation significantly increased

discounts were applied. For other areas of Ukraine there are ongoing on-site-visits and the valuation of real estate was fully

restored. The Ukraine economy is adapting to military conditions.

Impairment test for tangible and intangible fixed assets

Due to the war between Russia and the Ukraine, tangible and intangible fixed assets in both countries were examined for

indicators that could lead to an impairment in accordance with IAS 36.

In Ukraine, the tangible fixed assets located in the occupied territories were written off to zero in previous year. All other

tangible fixed assets were assessed individually and adjusted if damage occurred. This resulted in impairments less than € 1

million in the reporting year 2023 (previous year’s period: € 6 million).

Due to changes in market prices, interest rates, rental prices and vacant properties, as a result of the geopolitical situation and

a more detailed appraisal the impairment test for tangible fixed assets in Russia resulted in impairment losses of around € 16

million (previous year’s period € 1 million). The impairment test for intangible fixed assets resulted in impairment losses lower

than € 1 million (previous year’s period: € 6 million).

For the effects on the models for calculating impairments in accordance with IFRS 9, please refer to note (31) Expected credit

losses.

68 Consolidated financial statements

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

Notes to the income statement

(1) Net interest income

Interest and interest-like income mainly includes interest income on financial assets such as loans, fixed-interest securities, as

well as interest and interest-like income from the trading portfolio. Interest expenses and interest-like expenses mainly include

interest paid on deposits, debt securities issued and subordinated capital. Interest income and interest expenses are accrued in

the reporting period. Negative interest from asset items is shown in interest expenses; negative interest from liability items is

shown in interest income.


in € million	2023	2022
Interest income according to effective interest method	8,293	6,681
Financial assets - fair value through other comprehensive income	135	109
Financial assets - amortized cost	8,158	6,572
Interest income other	2,313	577
Financial assets - held for trading	311	182
Non-trading financial assets - mandatorily fair value through profit/loss	33	28
Financial assets - designated fair value through profit/loss	6	7
Derivatives – hedge accounting, interest rate risk	449	85
Other assets	1,512	156
Interest income on financial liabilities	1	119
Interest expenses	(4,923)	(2,205)
Financial liabilities - amortized cost	(3,717)	(1,791)
Financial liabilities - held for trading	(325)	(9)
Financial liabilities - designated fair value through profit/loss	(39)	(32)
Derivatives – hedge accounting, interest rate risk	(815)	(302)
Other liabilities	(16)	(10)
Interest expenses on financial assets	(11)	(60)
Total	5,683	5,053


in € million	2023	2022
Net interest income	5,683	5,053
Average interest-bearing assets	198,044	194,789
Net interest margin	2.87 %	2.59 %

Net interest income includes interest income of € 486 million (previous year’s period: € 325 million) from marked-to-market

financial assets and interest expenses of € 364 million (previous year’s period: € 42 million) from marked-to-market financial

liabilities.

The € 631 million increase in net interest income to € 5,683 million was largely driven by interest rates. Due to the liquidity

position in the reporting period, rising market interest rates in numerous Group countries led to a sharper increase in interest

income than in interest expense. The increases amounted to € 169 million in Hungary, € 90 million in Romania, € 83 million in

Slovakia, € 64 million in Croatia and € 42 million in Albania. Raiffeisen Bausparkasse Österreich Gesellschaft m.b.H reported an

increase of € 42 million due to upward repricing of variable-rate loans and increased interest income from derivatives. In

Serbia, net interest income rose € 124 million as a result of higher interest income from loans for non-financial corporations

and households and also partly due to the integration of Crédit Agricole Srbija AD. Volume-related higher interest income from

government certificates of deposit, from money market transactions and from government bonds led to an increase of € 43

million in net interest income in Ukraine. Net interest income in Russia, on the other hand, fell € 116 million, due to a partially

currency-related 34 per cent decline in loan volume. In Belarus, net interest income fell € 36 million due to falling market

interest rates and the resulting lower margins. Net interest income also fell € 10 million in the Czech Republic, as increasing

interest expenses for customer deposits from households and for newly issued MREL-eligible debt securities significantly

exceeded the increase in interest income from repo business and customer loans. The net interest margin improved 28 basis

points to 2.87 per cent, with the largest increases of 192 basis points in Serbia, 144 basis points in Albania and 109 basis points

in Hungary.

Consolidated financial statements69

· Raiffeisen Bank International | Member of RBI Group | Financial Year 2023

(2) Dividend income

Dividends from equities, subsidiaries not fully consolidated, strategic investments and associates not valued at equity are

recognized under dividend income. Dividends are recognized through profit/loss if RBI’s legal entitlement to payment has

materialized.


in € million	2023	2022
Financial assets - held for trading	1	1
Non-trading financial assets - mandatorily fair value through profit/loss	2	9
Financial assets - fair value through other comprehensive income	8	9
Investments in subsidiaries and associates	24	45
Total	35	64

(3) Current income from investments in associates


in € million	2023	2022
Current income from investments in associates	85	64

(4) Net fee and commission income

RBI applies the five-step revenue recognition model in IFRS 15 - Revenues from contracts with customers - for the recognition

of commission income when the contractual performance obligation to the customer has been satisfied. In cases where

contractual arrangements are part of a financial instrument under IFRS 9 the instruments are initially recognized at fair value

before applying IFRS 15. This is sometimes the case with loan commitments for which, depending on utilization, a portion of the

fee must be disclosed as part of the effective interest rate method in net interest income in accordance with IFRS 9 or in net

fee and commission income in accordance with IFRS 15 if not utilized .

In RBI, fee income is primarily generated from services provided at a fixed price over a certain period, such as card and current

account services or on a transactional basis at a point-in-time such as foreign exchange and payment services. In the case of

asset management fees income is normally variable and depends on factors such as the volume of assets under management

as well as performance of the underlying assets. Variable fees are recognized when all uncertainties, e.g., discounts or rebates,

are resolved and amounts are known.

If transactions are processed directly on behalf of the customer, the fees are reported on a gross basis. If, on the other hand,

RBI acts as an agent, the fees are shown net of payments to third parties.

Fees for foreign exchange and payment services are recognized in RBI at the time the service was rendered to the customer.

Fees that accrue over a certain period are recognized predominantly on a straight-line basis over the term of the contract.

In some cases, RBI offers a package of services (bundled services). These services may contain multiple performance

obligations which are usually distinguishable performance obligations, such as current account services, and the transaction

price is allocated to the individual performance obligation.

RBI has no financing agreements and no material assets or liabilities from long-term contracts in connection with IFRS 15. The

bank has not capitalized any expenses related to long-term contracts with customers which are covered by IFRS 15. Fee

expenses are expensed as the services are received.


in € million	2023	2022
Clearing, settlement and payment services	1,134	1,212
Loan and guarantee business	221	253
Securities	148	241
Asset management	253	266
Custody and fiduciary business	84	98
Customer resources distributed but not managed	60	63
Foreign exchange business	1,018	1,644
Other	124	102
Total	3,042	3,878

70 Consolidated financial statements