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Raiffeisen Plans Capital Increase

Published: May 14, 2012; 16:42 · (Vindobona)

The Austrian regional bank RLB Lower Austria – Vienna increases its capital base by € 500m, the chairman Erwin Hameseder says.

Raiffeisen Plans Capital Increase / Picture: © Raiffeisen Bank International

RLB Lower Austria – Vienna (Raiffeisenlandesbank Niederösterreich – Wien), the biggest shareholder of Raiffeisen Zentralbank (RZB), wants to strengthen its equity base. Until 2014, the equity should be raised by € 500m, the new CEO of Raiffeisen Holding Erwin Hameseder said. Details are not certain yet.

Hameseder ist he successor of Christian Konrad. Before, Hameseder was the CEO of RLB Lower Austria – Vienna. Raiffeisen Holding is the industrial holding company of the Raiffeisen sector. Among others, shareholdings in Uniqa, Strabag, NÖM, Kurier or Leipnik-Lundenburger are held.

For the time being, RLB Lower Austria – Vienna is the only segment of the Raiffeisen sector which needs to increase its capital. The insurance company Uniqa plans to complete a capital increase of € 500m in summer. These funds should be used for acquisitions in Eastern Europe and in order to strengthen the equity base. Last year, Uniqa recorded losses of € 326m. Above all, Greek sovereign bonds had to be written down.

However, RZB, which is the top unit of the Raiffeisen sector, has the highest capital shortfall. Until the end of June, RZB has to raise its equity base by € 2.1bn. Still in May, a capital increase of € 840m should be resolved at the annual general meeting. RZB´s major owners are the provincial Raiffeisenlandesbanken. The capital increase should be achieved by a share exchange between the Raiffeisenlandesbanken. Furthermore, a series of internal measures is planned.

The repayment date of the bank aid is still unknown. In 2009, RZB received participation capital of € 1.75bn by the Austrian state. Initially, a capital increase at the stock exchange was considered. Due to the low share price, this plan was dismissed.

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