August 21, 2014 / 2:25 PM / 3 years ago

Fighting in Ukraine could boost Raiffeisen costs

VIENNA, Aug 21 (Reuters) - Combat in eastern Ukraine could force Raiffeisen Bank International to increase its extra provisioning costs for the crisis in that country from 250 million euros ($331.7 million) this year, officials told analysts on Thursday.

The Austrian lender booked half of the extra costs for Ukraine -- mainly driven by depreciation of the local currency -- in the first six months of the year, Chief Risk Officer Johann Strobl said.

“The other negative impact that we have to expect from fighting in the eastern part of Ukraine is very, very difficult to assess. It is too early, but these numbers are not included yet,” he said.

The Kiev government is trying to put down a revolt by pro-Russian separatists in eastern Ukraine.

RBI, emerging Europe’s number-two lender, said earlier its credit exposure in eastern Ukraine was around 470 million euros at the end of June, of which around 140 million was already covered by provisions.

It has 80 branches in the Donestsk and Lugansk regions and determines day by day which to open.

Its total group credit exposure in Ukraine, where it is a top five bank with nearly 3 million customers, was 3.4 billion euros net of provisions at the end of June.

1 US dollar = 0.7537 euro Reporting by Michael Shields; editing by Jane Baird

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