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UPDATE 2-Austria bank RBI beats profit forecasts, predicts loan stability

* Q3 net profit at 230 mln euros vs 303 mln previous year

* Q3 net interest income down 11% at 770 mln euros

* Confirms full-year targets (Adds outlook, risk update, background)

BERLIN, Nov 12 (Reuters) - Raiffeisen Bank International (RBI) reported a 24% drop in third-quarter net profit on Thursday, hit by the economic fallout of the coronavirus pandemic, although the result was above forecasts.

The Austrian lender, which does business across central and eastern Europe, confirmed its full-year outlook and said loans to customers were stable in the first nine months in euro terms and were up in most countries in local currencies.

Consolidated net profit in the July-to-September period was 230 million euros ($270 million), beating an average analyst forecast of 215 million euros published on the group’s website.

Net interest income fell 11% to 770 million euros in the period, missing expectations of 815 million.

In Russia, a major market for the bank, that figure was down 21 million euros due to the depreciation of the rouble and rate cuts. Currency fluctuations and rate cuts also weighed on results in the Czech Republic and Ukraine.

Raiffeisen said its total exposure rose by 2.3 billion euros in the quarter to 201 billion, driven by an increase in its corporate and markets businesses.

Bumper trading volumes have also helped other big European banks to produce stronger-than-expected third-quarter earnings.

RBI’s risk weighted assets, the minimum amount of capital that must be held to reduce risk, were down in the quarter by 0.4 billion euros at 80.1 billion, mainly thanks to new corporate business in Austria and Romania.

That could reassure investors that the bank will not need to increase provisions to cover potential loan defaults in the wake of the pandemic.

RBI, one of the biggest lenders in its region, said it still expects loan growth to be moderate, the provisioning ratio to increase to 75 basis points, and the consolidated return on equity to be in the mid-single digits this year. ($1 = 0.8505 euros) (Reporting by Kirsti Knolle; Editing by Riham Alkousaa, Maria Sheahan and Alexander Smith)

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