Raiffeisen Bank International cannot exclude that it will pull out from Hungary and Slovenia, the company has announced on Monday. The bank has clarified what its officials said at a press conference in Bucharest over the weekend, Reuters reported.
Karl Sevelda, RBI’s chief executive told a press conference in Bucharest, Romania on Friday that they are in talks about divesting their Ukrainian arm, Aval, adding that when the time comes a decision will be made in this respect. On Monday, however, the bank announced it would like to clarify its stance on this matter.
RBI said today it has no fixed plan but it is indeed negotiating with several parties to be able to assess the offers and create a foundation for a decision on the price Raiffeisen Bank Aval should be sold at. This clarification was the less vital information disclosed today. What may deserve even more attention is a remark about Slovenia and Hungary.
"Dialogues have been entered into with these parties, in order for the offers to be evaluated and a basis to be established for a decision as to whether and at which price the Raiffeisen Bank Aval could be sold," it said.
"In addition to the Ukraine, markets such as Hungary and Slovenia are currently under special review and a withdrawal from these markets cannot be excluded," Reuters cited RBI as saying in a statement.
Raiffeisen will scale down its business in Slovenia, Hungary and Ukraine, make better use of regulatory allowances to lower capital requirements, and increase the lender’s earnings, before repaying EUR 1.75 billion in state aid in the form of participation capital, Sevelda told journalists.
“We have a core capital ratio of more than 10%," Bloomberg cited Sevelda as saying Nov. 15 in Bucharest in comments embargoed until Sunday. “It’s true that part of that is the participation capital, but we have that participation capital until 2017. That’s another four years. I don’t see any reason for stress toward a capital increase."
Raiffeisen is considering offers it received for its Ukrainian unit Raiffeisen Bank Aval and may sell the business, which will be profitable this year, Sevelda said. Aval isn’t as core to Raiffeisen’s geographic scope as its operations in countries including Hungary and Slovenia, where the bank is cutting its business without considering a complete exit, he said in the Romanian capital city.
“We want to stay in Hungary, you shouldn’t forget we went there in 1987 as the first eastern European market," he said on Friday. “There’s a lot of heart and soul in that. Hungary as a neighboring country certainly has a higher priority."
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