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Raiffeisen; Potential Belarusian Sale Would Derisk Group Marginally

FINANCIALS

Raiffeisen (RBI AV) closing on sale of Belarusian business with minimal capital impact but should be a minor credit positive.


  • RBI is in “advanced negotiations” with Soven 1 Holding (from the UAE) to sell its 87.74% stake in Priorbank JSC in Belarus. RBI would take a EUR225m book value loss-on-sale alongside a EUR450m write-down on historic FX losses. This latter figure does not impact regulatory capital.
  • CET1 may well be impacted by the book value writedown; CET1 capital was EUR16.2bn at Dec-23. CET1 ratio may fall by 24bp, we estimate, to around 16.8% (from 17.0%), but this is dependent on the capital structure within the specific divested entity. Mgmt guidance is for CET1 impact to be “minimal”.
  • In credit terms, lower CET1 is rarely good but this is a very small impact which, on the face of it, appears to remove a significant reputational (if not legal and economic) risk to the group. We note OFAC (the US regulator) is investigating the sale of the Russian business which was announced in Dec-23.
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