Raiffeisen Rothensteiner Sticks to Capital, Dividend Plan

Raiffeisen Bank International AG Chairman Walter Rothensteiner showed no sign of yielding to investor demands to sell shares and lower dividends a week after naming a new chief executive officer at the Austrian lender.

Rothensteiner, CEO of Raiffeisen’s 78.5 percent owner Raiffeisen Zentralbank Oesterreich AG, told reporters in Vienna that RZB was entitled to a “decent” dividend and reiterated he wouldn’t agree to the sale of new shares at a significant discount to the bank’s book value.

“There’s no question there will be a share sale at some point,” Rothensteiner said. “But if the stock is at 25 euros while you can calculate the book value at 35 or 40 euros, you’ll only do it if it’s absolutely necessary, and before that I’ll have to live with being criticized.”

Raiffeisen last week vowed continuity as it named veteran Karl Sevelda as CEO to succeed Herbert Stepic, who resigned amid a probe of his use of offshore accounts. His appointment rekindled expectations the lender may address its capital level, which is among the weakest among European banks if state aid and other phased-out capital is excluded.

Raiffeisen is raising its dividend by 11 percent even as profit declined by a quarter to 725 million euros ($965 million) last year. No analyst predicted the increase, announced in February, with the highest estimate being for an unchanged payout, according to data compiled by Bloomberg. RZB also raised its own payout, most of which goes to the eight regional mutual banks that control it.

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