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Austerity Program at RBI

Published: July 20, 2012; 19:34 · (Vindobona)

Raiffeisen Bank International´s CEO Herbert Stepic is against a capital increase. The market conditions would be unfavorable.

Austerity Program at RBI / Picture: © Raiffeisen Bank International

RBI currently plans an austerity program. Branches will be shut down, even jobs should be cut. At the end of June, RBI had to reach a 9.0% capital quota. Stepic asserts not to be surprised that the capital requirement is permanent.

In an interview with „Wirtschaftsblatt“, Stepic views the capital requirements by the Austrian Central Bank critically. Two weeks ago, OeNB recommended to increase the equity base. „To be honest, I do not think that this is reasonable. Especially if the market conditions are very unfavorable for a capital increase.“ Stepic said.

„We still face a badly working equity market.“ Furthermore, EBA obliged the banks to increase the core capital quota beyond 9.0%, Stepic emphasizes. And finally, there is the bank tax on a substantial part of the net income, Stepic says.

It would be reasonable to install a banking supervision authority at the European level. But the competences should be shifted to the European Central Bank. This would be better than EBA, Stepic considers.

Regarding the own austerity program, Stepic aims to flatten the expenses. „We not only want no cost increase, but a flat development of costs.“ Thus, the inflation effect should be offset. Job cuts are planned in all countries.

Stepic emphasizes that Russia became a growth driver for RBI. „Russia will become the second backbone for us.“