Raiffeisen Bank International AG, 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, which is based in the capital Zagreb, from Raiffeisenbank Zagreb Beteiligungsgesellschaft mbH, Susanne Langer, a spokeswoman for the company, said by telephone yesterday from Vienna. The bank plans to complete the transaction by the end of the year, she said, declining to elaborate on specifics.
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, 78.5 percent-owned by regional Austrian cooperative banks with declining profits and a lack of access to equity capital markets, has the challenge of bolstering finances without diluting majority shareholders.
Raiffeisen-Landesbank Steiermark AG owns 60 percent of the Croatian 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, Raiffeisen said in its half-year report. Its total assets in the Adriatic country are 5 billion euros.
RLB Steiermark classified its stake in the Croatian lender as available for sale in its half-year report published last week and said the stake is valued at 160 million euros. Raiffeisenbank Austria’s equity amounted to 5.53 billion Croatian kuna ($962 million) at the end of 2012, according to its annual report.
RLB Steiermark’s net income dropped 87 percent to 14.1 million euros in the first half of the year as interest income fell sharply and bad debt provisions soared. It predicted full-year earnings wouldn’t match last year’s result. The lender had swung to a net loss of 7.2 million euros in 2012.