MNI BRIEF: Raiffeisen Share Price Fall Overdone - EU Official

A steep fall in the share price of Austrian bank Raiffeisen in response to the conflict in Ukraine has been overdone, a senior European Union official said, adding that Russian exposures do not pose stability risks to eurozone banks.

“We had expected something like this might happen and we did the maths. Even if the entire Raiffeisen subsidiary became worthless, it would only impact Raiffeisen’s equity by about 1.5 percentage points of equity and capitalisation would still be at 11.5%. It would not be pleasant, but it would hardly be a threat to stability,” the official said.

“I think the stock market reaction to Raiffeisen is exaggerated,” pointing also to the cases of Unicredit and Societe Generale, which have lesser exposures to Russia.

Nor have banks been left in a weakened state by the Covid pandemic, he said.

“Covid overhang is no problem at the moment because the economy has been picking up strongly.”