April 1, 2014 / 5:00 PM / in 4 years

Raiffeisen fights regulatory capital target -paper

VIENNA, April 1 (Reuters) - Austria’s Raiffeisen Zentralbank is fighting a regulatory decision that the group must have a capital ratio of 13.77 percent by mid-year, newspaper Der Standard reported on Tuesday.

It said the Financial Market Authority (FMA) had set that level for RZB, the unlisted parent of Raiffeisen Bank International (RBI) and one of six Austrian banks to come under direct supervision of the European Central Bank later this year.

The paper said Raiffeisen thought the level - determined by the annual Joint Risk Assessment (JRAD) review - was too high and had filed an appeal with an Austrian administrative court.

The FMA declined comment. A Raiffeisen spokeswoman confirmed the existence of an assessment but declined to comment on any figure. “There is a notice which is not legally binding yet.”

She said the bank had a capital ratio of 14.2 percent under international rules known as Basel 2.5 at the end of 2013. RZB will publish its 2013 results next week.

Raiffeisen is already locked in a dispute with the FMA over RBI’s plans to pay back 2.5 billion euros ($3.45 billion) in non-voting capital it raised during the financial crisis, of which 1.75 billion came from the state.

Despite an RBI share sale that raised 2.78 billion euros in January, the FMA has not yet given a green light for repaying the capital, which costs the group nearly 600,000 euros a day in interest.

RBI Chief Executive Karl Sevelda has said the dispute stemmed from differing views of the risks posed by the political tensions in Ukraine, where Raiffeisen is a top-five bank.

$1 = 0.7249 Euros Reporting by Michael Shields and Georgina Prodhan. Editing by Jane Merriman

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