Raiffeisen Zentralbank Oesterreich AG, the majority owner of Raiffeisen Bank International AG (RBI), is seeking shareholder permission to fill a 2.5 billion-euro ($3.4 billion) capital gap by selling new shares and other securities.
RZB, which is unlisted and controlled by eight regional Austrian cooperative banks, scheduled a shareholder meeting for Dec. 28 by publishing the invitation in Austria’s official gazette. It could issue as many as 3 million new shares in RZB, or half of the outstanding, and sell non-voting securities known as participation capital, according to the agenda.
RZB, whose main asset is a 79 percent stake in eastern Europe’s third-biggest lender Raiffeisen, needs the extra capital to meet the 9 percent minimum ratio defined by the European Banking Authority. Raiffeisen said Nov. 24 that it and RZB were working on about 20 measures to fill the gap without seeking state aid or selling new shares in the listed business. The measures include reducing assets, retaining earnings and creating capital.
Raiffeisen’s shares rose 3.5 percent to 21.33 euros at the 5:30 p.m. close of trading in Vienna, making the lender the third best performer in the 46-member Bloomberg Europe Banks and Financial Services Index (BEBANKS), which was 0.4 percent lower.
“We believe Raiffeisen has more self-help options than the market realizes,” said Daniele Brupbacher, an analyst at UBS AG with a “neutral” rating on the stock. “Delivering in these areas is positive in my opinion.”
New capital could be created by swapping 500 million euros to 1 billion euros of non-voting capital currently issued by both Raiffeisen and RZB into new stock, Raiffeisen said Nov. 24. The new shares RZB is requesting could be sold against cash or contribution-in-kind, which would make that swap possible under Austrian share law. Raiffeisen hasn’t elaborated on other options to create new capital.
There is no price quote for RZB’s unlisted shares. Hypo NOe Gruppe Bank AG in October sold a 1.17 percent stake in RZB to other RZB shareholders for an undisclosed price. Austrian newspaper Der Standard reported that it agreed to sell the stake for 105 million euros, or 1,470 euros per RZB share.
The new non-voting capital RZB is seeking will be used mainly to buy minority stakes in Raiffeisen’s Hungarian, Czech and Slovak units, RZB said. Several of the regional banks that own RZB also hold minority stakes in those three units. Buying them out will boost RZB’s capital under the Basel Committee on Banking Supervision’s new rules and also help the regional banks’ own capital requirements.
RZB owners including Raiffeisenlandesbank Oberoesterreich AG and Raiffeisenlandesbank Niederoesterreich-Wien AG hold about 30 percent of Hungary’s Raiffeisen Bank Zrt., 49 percent of Czech Raiffeisenbank AS and 34 percent of Tatra Banka AS (TAT) in Slovakia, according to company reports and the Austrian company register.
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