FINANCIALS: Raiffeisen Spreads Wider But Moves Contained

Raiffeisen (RBIAV: A1) spreads are widening this morning (and equity is weaker) but we note two things; firstly, spreads are still tighter on the month and, secondly, much as average index spreads are c.4bp wider, against an average g-spread of 181bp, these moves are relatively contained.

• To recap, RBIAV has had its 100% holding in its Russian subsidiary frozen. The bank was already producing summary accounts “ex-Russia” which showed CET1 c.3pp lower (at c.14%, so still a comfortable margin over minima) and that impact was already captured in spreads, in our view.
• This news is an incremental negative but much moreso for the equity, where there may be some investors hoping for option value from Russia, something that’s been increasingly unlikely since the US government began pressurising RBIAV in the Spring.