Raiffeisen Bank International AG (RBI), eastern Europe’s second-biggest lender, is in talks to buy out a minority stake in its Croatian unit, Raiffeisenbank Austria dd, held by three of its own shareholders.
Raiffeisen plans to acquire the 25 percent it doesn’t already own in Croatia’s fourth-biggest lender from Raiffeisenbank Zagreb Beteiligungsgesellschaft mbH by the end of the year, Susanne Langer, a spokeswoman for the company, said by telephone yesterday.
New Chief Executive Officer Karl Sevelda plans to make more of the bank’s capital compliant with new European Union regulations that may force lenders to deduct the capital of banks they don’t fully own. Raiffeisen, owned by regional Austrian cooperative banks with declining profits and a lack of access to equity capital markets, has the challenge of bolstering its financial strength without diluting existing investors.
Raiffeisen-Landesbank Steiermark AG owns 60 percent of the holding company, while Raiffeisenlandesbank Oberoesterreich AG and Raiffeisenverband Salzburg regG own 20 percent each, according to the Austrian company register. All three are indirect Raiffeisen owners via Raiffeisen Zentralbank Oesterreich AG. In similar deals, Raiffeisen last year bought out some of its owners’ minority stakes in its Czech, Slovak and Hungarian units.
Raiffeisen’s profit after tax in Croatia dwindled by two thirds to 11 million euros ($14.5 million) in the first half of the year as bad debt expanded to 14 percent of the loan book. Its total assets in the Adriatic country are 5 billion euros.
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