Welcome to the Raiffeisen Bank International Q3 2026 results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star, one, and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star, one, and one again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Höllerer. Please go ahead.
Good afternoon, ladies and gentlemen, and welcome to our Q3 results presentation. Before we jump into the numbers and recent business developments, I would like to update you on our strategy review. In the past three months, we have defined the strategic pillars and assembled a portfolio of initiatives which will transform the bank and reset our financial ambition. We are now planning and preparing each of these initiatives for implementation. In corporate and investment banking, we intend to become the leading house bank in our region. This means better cross-selling and, in particular, focus on more efficient use of RWAs. We will prioritize growth in the more profitable segments and be very disciplined with our hurdle rates. In retail, our digital offering has made remarkable progress in recent years, and we will continue to build on this. We will deepen customer relationships and improve engagement and monetization.
I see enormous potential in both CEE and wealth management, and I expect these to contribute significantly to our growth engine. Across all our business lines, we are focused on the quality of our growth. I believe that the strategy and initiatives which are being finalized will do just that. Improving our profitability is one of our highest priorities. It is very important that our financial ambitions be met with initiatives which we can control, irrespective of the market conditions or interest rates. Cost discipline and capital allocation will serve us in any environment. Growth will, of course, be part of the story, and here I see two drivers. First, there remains significant untapped potential in our region, and we are well prepared to benefit from this. Second, we will have capital to deploy, and we are ready to absorb faster growth.
Let me be clear, I expect our financial ambitions to be achieved through our own self-help. Growth and market momentum will come on top. On February 10 next year, we will present to you our updated strategy and financial targets for 2030 on the occasion of our Capital Markets Day. This will be held in Vienna, and we look forward to welcoming you here. Let me now briefly update you on the two acquisitions which we have been working towards. First of which is Garanti in Romania. I am happy to announce, and we still did this today, that the transaction was successfully completed. We expect to become third-largest bank in Romania. We will now work on the integration of the new businesses, and we aim to merge it into Raiffeisen Bank Romania in the second half of next year.
Whereas 2027 will be impacted by some restructuring and integration costs, from 2028 onwards, we expect to see substantial contributions in Romania from this transaction. The acquisition of Addiko is also moving ahead. First of all, we have now reached the end of the additional tender period, and we have reached participation of nearly 95%. This may still increase in the coming days as more tender instructions are received. We are finalizing the regulatory approval process, and the dialogue with the respective authorities has been very constructive. We continue to assume that this transaction will complete still this year, once we have received all the required approvals. At the same time, we now deem the carve-out to be unlikely, and this does not change our appetite for these transactions. If the carve-out does not go ahead, we will look forward to including all of Addiko's subsidiaries in RBI Group.
This means in Serbia, the inclusion of Addiko Serbia consolidates our top 3 market position and reconfirms our commitment to the market. In Bosnia, we already have a market-leading franchise, and we welcome the addition of Addiko's two subsidiaries there. Moreover, we will also now enter Montenegro. Financially, this will improve both our CET1 ratio and ROE. In both cases, we can now assume that all subsidiaries remain part of the group, and we can recognize the full benefit of the goodwill. The full acquisition of Addiko has an impact of around 30 basis points on our CET1 ratio, excluding Russia, down from an expected minus 50 basis points when we still assumed the carve-out would succeed. The one-time gain from the badwill on all of Addiko will also go through P&L and have a one-time positive effect of around 310 basis points on our ROE this year.
Moving to my next slide, where our rundown in Russia continues to progress nicely. Loans to customers are down to EUR 2.2 billion, and in particular corporate loans, which are down to less than EUR 700 million. Our commitment to running down the bank is unchanged, and you should expect to see steady progress here in coming quarters. Equally important, we have made good progress in our claim against Rasperia. We now have a final verdict against Rasperia, and the damages that we have suffered have been recognized by civil court. In the next step, we will approach the Austrian Financial Market Authority and request the lifting of the freeze on Rasperia's Austrian assets. We cannot comment on the timing of FMA's decisions, but we believe we have a very strong case backed by European sanction legislation and by the final verdict by the already mentioned Austrian civil court.
We expect to sell the STRABAG shares directly from Rasperia's account and will not take them onto our balance sheet. Please understand that I will not comment further on the timing or strategy of this liquidation. We will next update the market as soon as we have a positive decision from FMA. Let us now take a look at the results year to date for the core of the group, excluding Russia. Consolidated profit stands at around EUR 1.1 billion, up 10% year-on-year. Loans to customers are up around 8% year to date, with strong momentum in retail in particular. Our CET1 ratio, assuming a worst case in Russia, remains strong at 15.4%. Finally, profitability remains in line with our guidance prior to the Addiko windfall, around 10%, and around 12.5% excluding the legacy issues. Kamila will comment later on in more detail on the result.
Before we jump to the outlook, I would like to share with you a few highlights from Raiffeisen Research CEE Banking Sector Report for 2026. If you are not familiar with this publication or if you have not received it, I strongly recommend to get in touch with us, and we will send you a copy. GDP growth rates continue to improve across our region, and the convergence trend towards Western Europe remains strong. We also expect loan growth to remain strong, close to 10% in nominal terms in both 2026 and 2027. Both of these trends are very supportive for our business, and as I mentioned a moment ago, we are very ready to grow. The banking sector itself remains in excellent shape, with remarkable asset quality and structurally higher ROAs compared to euro area banks.
Finally, we see that households' market investments are under 20% of GDP, compared to nearly twice that in Western Europe. This is another tailwind for our business, and wealth management is key to our retail strategy. On the next two slides, I want to briefly comment on, you can see the individual country GDP outlook. CEE is expected to remain on the right path, and we see further improvements in CEE, as well as in Austria and the broader euro area. Inflation expectations for next year and key rates forecast in our main markets you can see also on slide 11. I won't speak much there, and you will anyway find more details from our CEE Banking Sector Report. This brings me finally to the outlook for 2026.
We now include both Garanti and Addiko, very important to add, always on the assumption that Addiko approvals have been obtained still in the last quarter this year, and with an assumed participation in Addiko of nearly 95%. The net interest income is now expected above EUR 4.5 billion, and fee income confirmed around EUR 2.2 billion. OPEX are now expected about EUR 50 million higher, which with rounding brings us close to EUR 3.9 billion. Risk cost guidance is unchanged with up to 35 basis points. Including Addiko, we can now guide for an ROE of around 13%, and if you also exclude the one-offs, we are around 16%. Please note that this includes the one-time gain from acquiring Addiko for less than the book value of equity. Loan growth should remain positive in Q4, and we expect to finish the year up around 9% organically.
Including the consolidation of the two transactions, our loans to customers will increase by nearly 14% this year. Finally, CET1 ratio is expected around 14.5% excluding Russia, which versus today's 15.4% is largely explained by the impact of the both acquisitions. Thanks for your attention, and I may now hand over to Kamila.
Thank you, Michael. Good afternoon, ladies and gentlemen. Thank you for your interest today. I am happy to report another steady quarter across all of our operating trends. Starting with NII, we can report a record EUR 1.16 billion this quarter. This equals to almost 4.5% growth quarter-on-quarter. Fee income is up around 1.5% quarter-on-quarter, and across both of these key revenue lines, we expect further decent growth into the year end. OPEX reflects legal and advisory fees relating to Rasperia case. Excluding this one-off, costs would actually have been down in this quarter. I have just learned from Michael that our guidance into the year end has been increased by around EUR 50 million. This is largely driven by Addiko-related expenses and integration costs, which was not considered in our previous forecast. Let's look at this in more details on the following slides.
I move on to slide 15 on NII. NII this quarter benefits from further volume growth in both retail and corporate, but equally from a better euro and Czech koruna key rates, which is our main currencies. These key rates moves also drive the NIM improvement this quarter, mainly on the liability side. Asset margins remain tight, in particular in the retail. Corporate margins have remained broadly stable. Looking at some of our key countries, I would comment on Czech Republic. In the Czech Republic, NII was up 8% in the quarter. We see an improving deposit margin on the liability side, which partially reflects our own decision not to compete as much. Retail margins remain under pressure. However, this is partially compensated by very robust volume trends. These volume trends we see both in consumer loans and in mortgages.
In Romania, margins have stabilized with pressure on the asset side offset by better liability dynamics. Here, the shift from current accounts to term deposits has slowed, and the current accounts have stabilized. Volumes remained supportive, especially in the new mortgage lending, which continues to accelerate. Moving on to the next slide on the fees. Fee income remains very encouraging, visible in all countries and across range of products. We see a general pickup in transactions, positive trends in the corporate business, but also in asset management. Overall, we continue to expect around EUR 2.2 billion of fees in 2026. On slide 17, you see loans to customers. Loans are up 2% quarter-on-quarter with good trends, I mentioned in the Czech Republic and Romania, but equally Slovakia, where mortgages and consumer loans, and also corporate lending are all up 3% in the quarter.
Serbia also stands out in this quarter, where retail loans are up 5% and the corporate loans up 4% this quarter. After nine months, we have around 8% loan growth in the entire group, although this also includes over EUR 1 billion of short-term business, which normally rolls off before year end. Excluding this, our core lending business is up almost 7% in the nine months this year, and we can guide for around 9% organic core lending growth in 2026. We also include two acquisitions Michael already mentioned, Garanti, which closed this morning, and Addiko, which we also assumed for Q4. Our loan book will grow nearly 14% in 2026. Finally, if we compare these two market trends, we are growing in line with our peers in corporate segment in most markets, and even well ahead in Hungary.
On the retail side, I am also pleased that we are growing above the market rates in all of our key markets. As we look ahead at the possible uses of excess capital, I am encouraged by our organic market share gains. Moving on to deposits on slide 18. Deposits from customers are up 2% in the quarter. In retail, taking into account FX effects, deposits from households increased 1% quarter-on-quarter in Czechia and Hungary. In Romania and Serbia, deposits were up 2% each quarter-on-quarter in local currency. Liquidity ratios remain very comfortable across the entire group. On the following slides, we move on to the capital. With a stable development this quarter, both good on profitability side, but also on the lending growth. On slide 20, our CET1 ratio, assuming a worst-case scenario in Russia and the assumption behind this ratio.
On slide 21, you see our CET1 outlook into the year-end. We are working on securitization of retail loans, which are expected to close in Q4. This will provide us some further relief ahead of some maturities early next year. The biggest impact in Q4 is, of course, two acquisitions equal to around 90 basis points of CET1. At around 14.5%, we will be in line with our 14.5 mid-term target level. Briefly on slide 22, our SREP ratios and requirements. Let me move on to the next slide on the MREL, and generally funding plans. We can report very comfortable MREL ratios in the resolution group Austria, but also across all of our resolution groups. In Romania, we pre-funded MREL impacts of Garanti and with a senior non-preferred note back in August, which explains unusually high buffer there as of Q3.
Looking ahead to 2027, our subsidiaries will be busy. We expect benchmark transactions out of Czech Republic, Slovakia, Hungary, as well as in Romania. In head office, we have a Tier 2 up for call in September of the next year, and we will take a closer look in Q1, and we will probably issue at least one senior preferred note. Moving on to my last slide on Poland. We continue to guide for litigation provisions of around EUR 220 million in 2026. As in previous years, provisioning is not linear. In Q3, provisions declined by EUR 251 million, mainly due to lower Swiss franc inflows, and we would expect another slow quarter in Q4. We continue to see good progress in our settlement programs, and overall provision requirements will continue to drop in 2027. Ladies and gentlemen, thank you for your attention, and now hand over to Hannes for a risk update.
Thank you, Kamila. Good afternoon, ladies and gentlemen. Thank you for joining us this afternoon, and sorry for my bad voice. Allow me to briefly update you on risk trends this quarter, starting with a few numbers. In the third quarter, we have booked EUR 49 million of provisions, and year-to-date, it is EUR 159 million of provisions, also equal to 19 basis points. Our NPL ratio reaches a record low at 1.5% with a Stage 3 coverage ratio of 48.6%. Our stock of overlays remains healthy, around EUR 330 million, and we do not expect any material updates into the year-end. For me, all this is confirming a benign asset quality. Risk cost guidance for the full year of 2026 is around 35 basis points.
Before you ask, I assume you will, the decision to keep the guidance well above the current run rate is based on three factors. The broader macro outlook remains challenging, and the reasons are well known to you. I believe this deserves a little bit of caution. The retail run rate is around EUR 50 million per quarter, and we can already expect a few minor cases in the corporate book in Vienna. Finally, as said by Michael and Kamila, we also included here the first-time consolidation effect of both Garanti and Addiko. Let me move on to my next slide. Risk costs and IFRS provisioning for the Q3 are mainly driven by the releases to the macro model explained by an improving environment in Hungary, among others, and EUR 63 million of Stage 3 allocation, which is part of the regular course of business.
I move on to the next page, Q3 2026 risk-weighted assets development. You could say uneventful, mainly driven by corporate loan growth, and to some extent, retail as well. Looking ahead to next year, we expect around EUR 1 billion of risk-weighted assets increases coming from model reviews and updates. We expect some inflation to our large corporate IRB model in Vienna, and while it is too early to quantify, I am confident that this will be comfortably digested in our capital and growth plans. This already brings me to my last page. NPL ratios remain low across the group, and I am sure you have recognized in Vienna, we continued to make good progress in our workout portfolio with NPL volume down by 11% in the quarter. Ladies and gentlemen, thank you very much, and we are now more than happy to take your questions.
Thank you. If you would like to ask a question, you will need to press star, one, and one on your telephone and wait for your name to be announced. To withdraw your question, you can press star, one, and one again. Please stand by while we compile the Q&A queue. Thank you. We will take our first question. This is from the line of Máté Nemes from UBS. Please go ahead.
Yes. Good afternoon, and thanks for taking my questions. I have three of them, please. Firstly, I wanted to follow up on your comments on the guidance change. I was wondering if you could give us a clear bridge for the change in full-year 2026 guidance, specifically which elements reflect underlying operating performance and which reflect changes in rates or other macro assumptions, and what are the one-time effects in the guidance? Specifically, I am thinking about NII and OPEX. I think in OPEX you mentioned a roughly EUR 50 million change. But if you could clarify that similarly on NII. The second question is on the two acquisitions. On Garanti BBVA and Addiko, could you quantify the expected impact of each transaction in terms of uplift on ROE beyond the initial restructuring period or integration period by perhaps in 2028? What would be the ROE uplift coming from the transactions?
The last question is on the risk side. Hannes, you mentioned that you would expect a few default cases in the corporate book in Vienna in the fourth quarter. If you could clarify if there is any unifying theme across those. Secondly, you mentioned Stage 3 provisions, or you wrote Stage 3 provisions of EUR 63 million in the third quarter and referred to mainly households in Czech, Slovakia, and Romania. If you could give us a bit more color, is that consumer lending? Where are those Stage 3 provisions coming from? Thank you.
Thank you, Máté Nemes . Let me take your first question on the guidance of the change and decomposition. In our guidance, organic NII improvement is approximately EUR 70 million, and this is coming from euro and Czech koruna rates and the better volumes. Addiko adds approximately EUR 20 million. When it comes to Garanti, it was already included in Q2 guidance, so here you would not see the change from our guidance coming from that. On the OPEX side, excluding Rasperia one-offs, we see approximately EUR 50 million increase in the guidance, largely due to Addiko and Addiko integration costs. However, with rounding, it takes us from EUR 3.8 billion to EUR 3.9 billion, so that's a rounding effect. Garanti, as I said, was already included in the previous guidance. Return on equity is largely reflecting expected badwill from Addiko, which alone contributes approximately 310 basis points, one-off increase in ROE.
Excluding Addiko, our guidance slightly better than Q2, with a core ROE of approximately 10% or 13% adjusted for Poland and Rasperia legal costs. I hope that provides the answer to the first question.
It does.
Thank you.
I will take over the second question, the expected impact out of the two transactions. I will focus on the profit accretion in this respect. For Garanti, we expect a profit accretion of EUR 90 million in 2028, increasing to EUR 130 million by 2030. This should see Romania earning over EUR 400 million after tax in the coming years. On Addiko, we need to first now complete the voluntary takeover. Once this is done, we will take a closer look at the different businesses in order to provide a better guidance to you, as we had the most recent developments to take into account. Please give us here more time. Thank you.
Máté, thank you also for your question and giving me the opportunity to give a little bit more insight to the risk cost thinking for the year end. The first one is, as I said, it is the broader macro outlook, which remains challenging. You could say this is the disclaimer because we have seen so many surprises. Let me also talk about things where we are pretty clear. EUR 50 million of run rate on the retail, this is what we have seen in the last quarters. I think this is pretty clear to confirm it here. The second one is the corporate book in Vienna, because you touched it. We all have seen that interest rates are being up, and this means that on cash flow basis, I need to adjust here and there the one LLP.
Think about some EUR 15 million-EUR 20 million, but this is about it. The third one is the guidance is also including our first-time consolidation effect from both Garanti. Here we are talking round about EUR 20 million, EUR 22 million, and also Addiko around about EUR 50 million to EUR 60 million. Hopefully this helps to have a better insight and a better understanding. Thanks.
It certainly does. Thank you. If I may just one follow-up on the second question on the ROE uplifts coming from Garanti BBVA. Given the numbers you mentioned, we have EUR 90 million in 2028. Is it fair to state that this lifts ROE for the group ex-Russia by at least 100 basis points alone?
I think this, I would say it that way. We have now 2027 at the year of integration, and we will have a look at this now in one year, roughly one year on this. But given our ambitions on the way forward on the ROE, I would ask you to wait for our Capital Markets Day in February, where we bring in general our way forward on the ROE, and we'll go here more in details, if this is fine for you.
Absolutely, that's fair. Thank you very much.
Thank you.
Thank you. We will now take the next question. This is from Riccardo Rovere from Mediobanca. Please go ahead.
Thanks a lot for taking my two, three questions, if I may. The first one is on capital requirement. We saw that the Austrian national regulator decided to lower the O-SII buffer by 50 basis points also for you. I was wondering whether the 14.5% long-term aspiration does take that into account, or maybe this is going to be replaced with something else. The second question I have is on the integration of the two. Can you exactly explain when those integrations should take place? Garanti is done, so you will consolidate Garanti for, let's say, a couple of months from this morning, if I'm not mistaken, in the P&L. The balance sheet will be fully consolidated.
It's not that clear to me on Addiko what is going to happen, given that the transaction is not yet completed, so you keep talking about possible impact also toward the end of 2026. Then, sorry to get back one second, Hannes, on the 35 basis point risk guidance. Does this include one-off, I don't know if one-off or not, but provisions related to the two acquisitions. It's not clear to me. Sorry to ask that.
Okay. Thank you, Riccardo. The sound was a little bit difficult. I hope we understood your questions very well. Referring to the two first capital requirements changes in Austria, the first step happens actually in January 2027, minus 25 basis points, and the second one will follow in January 2028, another 25 basis points. From that perspective, 50 basis points for the group and RBI AG in total. But we view this as quite a positive development, but we won't feel the immediate benefit itself. It would be quite limited because we will not change our medium-term CET1 target from 14.5%. So, we will remain at that level going forward.
Riccardo, sorry.
No, no, fine.
Fine.
Please, go on.
Perhaps coming to your second questions, I hope we understood you correctly about Addiko and the integration of balance sheet, of the profits, and everything. We were today presenting the one-off, so the first step of the transaction. As you know, the transaction has two steps. First, the step in as a shareholder, second step to do the carve-out. As now, given the latest developments, we do not deem the carve-out as realistic, so we are looking to take over and keep the subsidiaries. On these topics, on these figures, on these details, we will have to have another look and a more detailed look. In our next presentations, you can be sure we will then present a more detailed view on these topics.
Sorry for this, but it is really most recent development, and it is very difficult for us now to tell you already reliable figures on this.
Riccardo, I understand, Michael, but just for me to understand, you think you will consolidate Addiko, the whole of it, 100% of it, before the end of this year, before 31st of December. Am I right?
Riccardo, allow me to answer this. We are waiting for the approvals from the regulators, and as you understand, this involves various entities and various regulators
Right
...across the jurisdictions. From that perspective, the consolidation will happen once we receive all the approvals, so that we will be able to close the transaction. But indeed, we will consolidate the entire perimeter of the transaction. Previously, we were expected to consolidate on the part which were intended to be taken over, and the rest to be booked in IFRS 5. Now, we see no reasons to book it currently at IFRS 5, and we will consolidate fully the entire perimeter of the transaction. Therefore, you see the impact.
But in any case, Kamila, you will take some provisions in Q4 related to that, even if you don't control it?
Indeed, at the first-time consolidation, what we do is we are doing opening balance adjustments. So basically, we are evaluating all the assets at the fair value, with application of all of our standards and needs, and the way how we are viewing this, and we will take all the impacts. The capital impact estimations that you see, as well as the uplift on the ROE, include already estimated purchase price adjustments, yes, that we've seen. So, the estimation, we are already running kind of a trial PPA, so purchase price adjustments, and this is our best estimate on the capital impact as well as ROE impact.
Okay.
Does it answer your question?
No.
No?
Sorry, no.
Okay. Allow me to do that one more time.
No, because the goodwill is not insignificant. The badwill will not be insignificant, okay? The badwill could, but it could have an impact already in 2026 profit or not?
We are able to recognize the badwill only upon consolidation, and consolidation can only happen when we close the transaction. The closing of the transaction will follow only upon receipt of all the approvals from all the regulators.
All right. Okay. Okay.
Okay?
And that is financially, yeah. Okay. Okay.
Riccardo, why is not the line if it is quite challenged and difficult? Coming back to the risk cost question from your side, of course, you immediately recognize the topic. To reiterate, my guidance or our guidance of the 35 basis points is on the one inside the unknown because of the broader macroeconomic outlooks, which remains challenging. I was talking about the EUR 50 million run rate on retail, and then hinting to some minor cases in the corporate book here in Vienna, and I was giving as an argument interest rates went up, and because of discounting effect of the cash flows, you would see maybe the one or other LLP a little bit of increase. The last thing I was sharing beforehand was the first-time consolidation effect, where now Kamila was digging so deep into the whole case.
Garanti is closed, so for sure we will have the plus EUR 22 million in an addiko depending on all the needed approvals. If we can consolidate and if we can close the transactions, we would have an impact of up to EUR 60 million. So, pure RBI guidance, the initial guidance we have started with within this year, only the first three bullets are relevant: the macro outlook, the retail run rate, and the minor cases here in the corporate book in Vienna. The fourth one I was giving as a guidance, now we are including a first-time consolidation effect from Garanti plus EUR 22 million in addiko of up to EUR 60 million. Hopefully, this helps, Riccardo.
Thanks, Hannes. Just, and then I will close, I promise. The 20, and eventually the EUR 20 million and the EUR 60 million, are they part of the PPA allocation or the run rate of provisions?
Indeed they are. Indeed they are. Riccardo, possibly a clarification from my side. We are, in our guidance, plan to close the transaction still this year. That is our basic assumption. But of course, from our perspective, this is subject to approvals. From the timing perspective, this is what I wanted to clarify. The PPA that we are showing you includes the risk costs which Hannes just mentioned.
All right. Okay, that is clear. Thank you.
Thank you.
Thank you. We will now take our next question. This is from Krishnendra Dubey from Barclays. Please go ahead.
Thanks for taking my question. Starting with the NII. On the NII, you explained the guidance had like EUR 70 million improvement from core businesses, EUR 20 million from better volumes. You are guiding for EUR 4.5 billion. If I take the implied run rate, it is still suggesting Q3 at that Q4 level, Q4 at Q3 level, broadly, despite you including Addiko and a bit of Garanti as well. Also, could you explain what drove the GC&M increase and how much of it is sustainable, your margin move? Second question is on cost. Thanks for explaining the cost. My ask is pretty simple, I guess. If you could just give us the cost excluding one-off, all the Rasperia claim, the M&A impact, and everything, what is the underlying cost that you think would be there for this year?
You talked about strong retail volume, you are gaining market share. But the retail margin and the pressure looking into 2027, I know you would not be giving guidance, but where do you see possibility of better growth and highest competitive pressure?
Thank you for all the questions. Let me address them one by one. NII EUR 70 million, it is organic improvement, as I said, primarily driven by euro and Czech koruna rates. And the better volumes. Here, we are seeing a rather good development. If you ask me whether we are conservative, there is a level of conservatism in there, but currently, this is what we are comfortable with guiding you for. When it comes to your second question on the OPEX and the clean OPEX guidance. We are guiding for the EUR 3.8 billion of OPEX, which is, sorry, EUR 3.9 billion of OPEX, which is increased from EUR 3.8 billion previously. This already includes the increase from the Addiko.
So EUR 50 million, and that is why we raised the guidance overall from, if we are excluding the Rasperia one-off, we are growing OPEX at about 8% year-on-year. Here, if you exclude the EUR 50 million of Addiko, it would be slightly below. Sorry, I have to correct myself. It is EUR 3.7 billion to EUR 3.8 billion increase of our guidance on the OPEX side. When it comes to NII margin, something which you have basically asked about how sustainable our NIM going forward, we expect that 2027 NII will benefit from the still volume growth across all of the markets. Here it is probably too early to guide for the volumes, but generally we expect to grow with the market and our region sees quite a substantial growth.
Furthermore, we expect the tailwinds, of course, from the rolling of the fixed rate assets or mortgage loans bonds into a higher rate. Here, liability margins continue to benefit from the current interest rate levels, where we know that on the asset side and lending margins, we are rather cautious going forward.
Can I ask just a follow-up? I guess, sorry, I was on.
Yeah
NIM, I was just referring to GC&M rather. I know you would not be calling out the full number. I was just trying to gauge the GC&M business. Just that was for the margin.
On GC&M, NII at EUR 202 million in Q2, which is up EUR 24 million quarter-on-quarter. Here, NIM improved quarter-on-quarter from 1.11% to 1.25%. It is a continuous effort from our side to be disciplined on the profitable business. This is something which you have heard in the strategy, one of the pillars on increasing profitability and addressing GC&M business. We would continuously see a better improvement on the NIM, on the GC&M. The last question, 2027, where you are asking about our ROE development. First of all, I hope you join us on the Capital Markets Day on 10th of February, where we will walk you through all of our ambitions, including the profitability ambitions.
What we can say today is that one of the key pillars from our side would be a key cost discipline, very much, and a very disciplined also capital allocation, which will be driving our improved ROE in the coming years. That would be our key pillars. We generally remain very positive for our region and the potential for sustained growth in our region.
Sure. Thank you. Can I just sneak in a very small question, just a small follow-up on the NII, on the Hungarian NII? Are there any negative one-offs to be seen in Q4, or like there isn't anything which is like, it's just flat Q1, Q despite loan growth and volume growth, it's just the FX impact? Or, are there any one-offs or anything that we should be aware for Q4, small on the Hungarian side?
I think that there is a cap on the interest rates, so it's prolonged. This is something which you have seen. On NII, more than that, I don't see a significant impact going forward. When it comes to the profitability of our Hungarian business, what needs to be mentioned is that the banking tax was prolonged going forward in 2027, so at the current level. So here, we would not see any improvement in 2027. Also, the corporate income tax for the larger entities have been increased from 9% to 15%. Yes, that's correct. So this would be also some impact on the total effective tax rate in Hungary.
Thank you.
Thank you. As a reminder, if you would like to ask a question, you will need to press star, one, and one on your telephone and wait for your name to be announced. To withdraw your question, you can press star, one, and one again. We have a question from Riccardo Rovere from Mediobanca. Please go ahead.
Thanks. Thanks for this quick follow-up. When it comes to Garanti BBVA and the EUR 90 million profit accretion that you mentioned, could you be in the position to say how much of that is synergies with the current operations you already have in Romania and how much is the underlying business that you are consolidated, please?
Generally, in all our acquisitions, we are taking a rather conservative approach. In most of the cases, we are predominantly counting with the cost synergies, which we consider in our hands, and rather less on the revenue synergies. What we are counting also and with the lower funding costs. That is what is the second component to the revenue accretion.
Okay. Fine. Is out of the EUR 90, I do not know, 1/3 is synergies, one-fifth? I mean, if you want to share with us this number. If you do not, I understand.
Frankly speaking, it is relatively sensitive information.
No problem.
I will tell you that majority of it comes from the OPEX.
No problem. Thanks.
Thank you. As a reminder, if there were any further questions, please press star, one, and one on your telephone and wait for your name to be announced. If you need to cancel your question, you can press star, one, and one again. Next question is from Máté Nemes from UBS. Please go ahead.
Thank you for taking my follow-up question. This is on NII. Specifically, I wanted to ask about the bond portfolio. In NII, you flagged continued expansion of the bond portfolio, and I was just wondering if you could update us on the key attributes of that bond portfolio, i.e., size, duration, and yield. What would you expect for NII contribution come 2027? Thank you.
Thank you for the question. The size of the security book is approximately EUR 49 billion, out of which EUR 41 billion are government bonds. This book we primarily use as a natural hedge to stabilize our NII. Average maturity is approximately 5.2 years, modified duration about five years. Some of these bonds are asset swapped, and of course, yields depend on currency and the countries, and it would be misleading if we provide you average yield. If you refer to our NII sensitivity, it fully reflects the bond portfolio.
Understood. Thank you, Kamila.
Thank you. We have another question from the phone lines. Please stand by. Question from Thomas Unger from Erste Group. Please go ahead.
Yes, hello. Sorry. Good afternoon. Thank you for taking my question. I only have one actually, and this is on the Rasperia claim. I would like to understand the legal ownership and accounting treatment of the EUR 3.15 billion claim. Was the economic entitlement to the recovery already transferred from the Russian subsidiary to the Austrian parent so that the proceeds can be recognized with RBI, excluding Russia? Thank you.
First of all, the claim has been brought by RBI, as well as our Russian subsidiary. We consider this claim to be recognized in RBI upon defreezing of the shares. Here, basically with alignment with our auditor, we decided that freezing of the assets by FMA would provide us with a level of the certainty in order to recognize this asset on our balance sheet. If you would ask us from today perspective, we will recognize it in other income upon, as I said, upon unfreezing of the shares. We are working on the different scenarios. This, I can confirm, we will not send this money to Russia.
No, but it will be recognized as in the view excluding Russia. Is that correct?
No. It will be recognized, yes, in the view excluding Russia, in our core group.
Okay. Thank you.
Thank you.
We have-
Oh, we have one more question on the phone lines if you would like to take that.
Yes, please.
Thank you. This is Riccardo Rovere, Mediobanca. Please go ahead.
Yes, thanks. Thanks for taking my second follow-up. In one of the slides right at the beginning of the presentation, you mentioned your Raiffeisen Research colleagues department seeing 9%-10% loan growth, 2026, 2027. Is that projections, is something that you take into account when it comes to your budgeting and planning, or not?
Generally, CEE Banking Sector Report contains the number of countries, for example, including Poland, which also shows quite a significant growth, so that impacts the overall number that you see here. But in our budgeting and planning, we normally don't look at the regional growth. We look at more detailed planning on country-by-country basis, and we rely on the indications which you will see actually in CEE Banking Sector Report itself on per country basis. This is our source of budgeting and planning and assumptions on the market growth. Overall guidance for 2027, it's too early for us to comment where we go, but we've seen that our region enjoyed quite a substantial growth and remains to be a very attractive pocket of growth. And we have proven our ability to grow with the market in all of our markets, in most of our markets, yeah.
In some areas and in some products, we grow substantially above, yeah. We will continue to do that as part of our strategy.
All right. Perfect. Thank you very much, Kamila.
Thank you. I would now hand over to the speakers to take a question from the webcast.
We have only one question in the chat. It was partially answered when we were answering the question from Erste Bank, but I will read up and maybe some of the additional points will need to be mentioned. What are specific uncertainties still prevent RBI from recognizing the asset gain now that the Austrian court ruling final and legally binding? That refers to the Rasperia accounting treatment on the capital impact. It comes with a second and a third part. From IFRS perspective, do you consider formal FMA approval is absolutely necessary before recognizing the asset, or could the final court ruling already meet IAS 37 requirement that inflow of economic benefit is virtually certain? The final question is, what would be the potential impact of derecognizing this asset again on RBI 2026 net profit equity, and in particular the CET1 ratio, excluding Russia?
To put it in another way, is any such positive effect already reflected in the current capital guidance? To answer these questions, the first two, in the alignment, as I mentioned with our auditor, we have decided that the unfreezing of the assets by FMA will provide us with a level of certainty. Only upon the unfreezing of the assets, we will recognize it on our balance sheet and also on our balance and through effect through P&L actually. On the third question where you're referring to impact from unfreezing, based on the today share price, the net effect through P&L would be around EUR 2.6 billion. This is not included in our guidance nor in our CET1 outlook, and we cannot comment on any timing here of the FMA decision. Thank you for the questions.
Thank you. There are no further questions, so I will now hand back to the speakers for any closing remarks.
Thank you all for your participation in today's call. We are very much looking forward, as I said at the beginning, to our Capital Markets Day in February. Hopefully, we may welcome many of you personally in Vienna. We keep you posted on all the developments, especially on the M&A transactions and also Rasperia, as we said in our presentations. Before the Capital Markets Day, of course, we will present our Q4 results one week before on February 3 next year. Thank you and goodbye.
Goodbye.
Bye.
Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.