Reuters logo
UPDATE 1-Raiffeisen in no rush to repay state aid -CEO
June 26, 2013 / 9:57 AM / 4 years ago

UPDATE 1-Raiffeisen in no rush to repay state aid -CEO

* CEO says can take time to repay Austrian state aid

* Says net interest margin could be slightly higher in 2013

* Says “definitely” won’t buy any more banks (Adds quotes and background)

VIENNA, June 26 (Reuters) - Raiffeisen Bank International is in no rush to repay Austrian state aid despite rival Erste Group’s push to pay back the capital with the help of a rights issue, RBI Chief Executive Karl Sevelda said on Wednesday.

“We have always said that we have no intention of paying back the funds we received in the near future,” he told shareholders at his first annual meeting as CEO, saying the bank first needed to agree the issue with regulators.

“But we have the option to repay the participation capital in parts or in full any time,” he added, noting the non-voting participation capital counted as core tier 1 capital under international and Austrian rules until the end of 2017.

“In this context, we consider the coupon of 8 percent - there will be an increase from 2014 onwards - reasonable,” he said, although he acknowledged this type of capital will become increasingly unattractive over time.

The Raiffeisen group raised around 2.5 billion euros ($3.3 billion) in non-voting participation capital after the financial crisis broke out, of which 1.75 billion came from the state and the rest from private investors.

Erste Group Bank on Monday said it would repay 1.76 billion euros in participation capital in the third quarter and raise about 660 million euros via a rights issue.

Analysts estimate Raiffeisen needs to raise between 1.5 billion and 1.8 billion euros in capital to meet future regulatory requirements. But it has shown little appetite to sell more shares while its stock trades below what it sees as its true value.

Sevelda, who took over this month from Herbert Stepic when the veteran CEO stepped down over personal investments, said RBI’s net interest margin is set to be steady “or slightly higher” in 2013, reiterating it expected net risk provisions in line with 2012 levels.

The bank had said in May its net interest margin would roughly match last year’s levels.

Sevelda told shareholders that central and eastern Europe’s second-biggest lender would “definitely” not buy any more banks but could acquire small portfolios from other banks that scale back in the region. ($1 = 0.7649 euros) (Reporting by Michael Shields; editing by Georgina Prodhan)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below