Bloomberg News

Raiffeisen Highest Since September as Concerns Wane: Vienna Move

February 02, 2012

Jan. 23 (Bloomberg) -- Raiffeisen Bank International AG, eastern Europe’s third-biggest bank, rose to the highest level since September as Credit Suisse AG told clients that concerns of eastern European banks lacking funds are “overdone.”

Raiffeisen joined rallying European banks including Austrian peer Erste Group Bank AG as well as Commerzbank AG and UniCredit SpA. It advanced 12 percent to 23.735 euros at the 5:30 p.m. close in Vienna, the highest level since Sept. 16. Erste, which leads Raiffeisen in eastern Europe following market leader UniCredit, rose to levels last seen in October, climbing 11 percent.

Credit Suisse analyst Hugo Swann said in a note to clients that the European Central Bank’s unlimited 3-year loans to banks made funding for lenders active in eastern Europe less tight and lowered the threat of turmoil because of banks pulling out of the former communist countries.

“We think the LTRO reduces the risk of a disorderly exit from eastern Europe and as such lowers a large risk to the banking sector,” said Swann, who has Raiffeisen among lenders he rates “outperform.” The ECB funding also made costly competition for deposits less probable, he added.

Separately, Goldman Sachs Inc. analyst Heiner Luz told clients in a note today to buy Erste shares because its decline had caused “abnormal” valuation inconsistencies. Erste was also upgraded to “overweight” by Concorde Securities analyst Gabor Kemeny today.

--Editor: Zoe Schneeweiss

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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