Bloomberg News

RZB Raises 342 Million Euros to Buy Assets From Its Owners

January 03, 2012

(Updates with sellers of assets in last paragraph.)

Dec. 30 (Bloomberg) -- Raiffeisen Zentralbank Oesterreich AG, the majority owner of Raiffeisen Bank International AG, raised 342 million euros ($443 million) from existing shareholders to buy assets in the same amount from them.

RZB, closely held by eight regional cooperative banks, raised the capital by selling non-voting participation capital to some of its shareholders, the Vienna-based lender said in a statement today. It’s buying, for the same amount, 24 percent of Czech Raiffeisenbank AS and 13 percent of Tatra Banka AS, also from some of its shareholders.

“This measure ensures that the RZB Group’s structure is optimized and at the same time improves its capital position according to the provisions of Basel III,” RZB said in the statement. Under rules introduced by the Basel Committee for Banking Supervision, banks can no longer fully consolidate minority stakes held by outside investors in subsidiaries such as Raiffeisenbank and Tatra Banka. Basel III’s introduction has been brought forward by Austrian regulators and will kick in from 2013.

RZB has until the end of June to fill a 2.1 billion-euro capital shortfall determined by the European Banking Authority. While the measure doesn’t help fill the gap directly because the EBA doesn’t recognize the participation capital, the bank will later swap the new capital into common stock. The same swap is planned for 500 million euros to 1 billion euros in participation capital it has issued before.

RZB spokesman Andreas Ecker-Nakamura declined to say which of its shareholders bought how much of the participation capital.

RZB used the funds to make purchases from its two biggest shareholders. Raiffeisenlandesbank NOe-Wien AG sold RZB both its Czech and its Slovak stakes, while Raiffeisenlandesbank Oberoesterreich AG sold its Slovak and kept its Czech stake, Ecker-Nakamura said.

--Editors: Frank Connelly, Stephen Taylor

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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