Europe’s Raiffeisen Bank International, which saw its chief executive resign last week over allegations concerning offshore property investments, has logged a consolidated profit of €157 million ($202 million) for the first quarter of 2013, a slide of 71 per cent from a year before.

The year-on-year change was magnified by one-off effects such as last year’s gains achieved from the sale of bonds and the repurchase of hybrid core capital, worth €272 million.

The quarterly result was also “negatively distorted” by €82 million due to valuation effects on long-term structured notes as well as senior and subordinated liabilities, the European banking group said.

“This valuation result has no effect on regulatory capital or capital ratios. As the credit spreads of RBI decreased significantly recently, the fair value of these liabilities also increased significantly,” the bank said.

"We started the year on good terms. Despite the low interest rate environment and the weak economic cycle, we slightly increased our operating income compared to the first quarter of 2012. We expect the economic cycle to pick up in the second half of the year and therefore we are optimistic to achieve a pleasing result in 2013", said Herbert Stepic, chief executive.

Stepic, as reported last week, has resigned from his post "for personal reasons". The CEO is being investigated by the bank’s compliance department amid media reports that he used an offshore account to manage real estate investments. In a statement, the bank had said: "Herbert Stepic has informed the chairman of the RBI supervisory board, Walter Rothensteiner, that he is offering to resign his position as CEO of Raiffeisen Bank International due to personal reasons. The responsible committees at RBI will promptly consider this proposal. Herbert Stepic will continue in his function of CEO until the committees reach a final decision."

Among other figures, the banking group said its pre-tax profits fell by 63.4 per cent to €251 million (Q1 2012: € 685 million), while profit after tax declined by 69.7 per cent to €174 million (Q1 2012: € 74 million).