UPDATE 1-Austrian bankers back Vienna-Warsaw bourse tie-up

Wed Apr 10, 2013 12:11pm EDT

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VIENNA, April 10 (Reuters) - Top Austrian shareholders in the Vienna Stock Exchange welcomed on Wednesday prospects of a tie-up between the Vienna and Warsaw stock exchanges.

The two bourses have discussed merging to create a regional hub for share trading in central and eastern Europe, a source close to the discussions said on Tuesday.

"I think that would make a lot of sense," Raiffeisen Bank International Chief Executive Herbert Stepic told a news conference at the Austrian bank, which has a nearly 7 percent stake in the Vienna Exchange.

He said consolidation among various trading platforms was "a natural development that one should continue to pursue".

Willibald Cernko, chief executive of UniCredit unit Bank Austria, said: "I welcome the Vienna Exchange's basic strategic consideration but think all strategic alternatives should be carefully reviewed before a final determination."

Bank Austria has a 13 percent stake.

Other Vienna bourse shareholders including Vienna Insurance Group and Uniqa declined to comment.

A combination would bring together central and eastern Europe's two biggest exchanges by value of their listed companies.

Erste Group Bank analyst Friedrich Mostboeck said a tie-up made sense, especially if it led to a common trading platform for eastern Europe.

"There is no getting around either the Vienna Exchange or the Warsaw Exchange because Warsaw is a big, liquid market," he said.

The Polish operator, which has maintained a steady stream of new listings over the last few years despite Europe's economic troubles, is home to 438 companies with a total market capitalisation of nearly 700 billion zlotys ($223.5 billion).

CEE Stock Exchange Group, parent of the Vienna Stock Exchange and which also controls the Hungarian, Czech and Slovenian bourses, hosts companies with a combined market value of 129 billion euros ($169 billion) across the four exchanges.

With declining trading volumes putting pressure on profits, and increasing regulation raising costs, the temptation to consolidate is strong. ($1 = 3.1322 Polish zlotys) ($1 = 0.7642 euros) (Reporting by Angelika Gruber and Alexandra Schwarz-Goerlich; Writing by Michael Shields; Editing by Tom Pfeiffer and Anthony Barker)

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