ECB pushes Raiffeisen, UniCredit to hold capital for Russia risk, sources say
By Alexandra Schwarz-Goerlich, Valentina Za and John O'Donnell
VIENNA/FRANKFURT/MILAN, Nov 8 (Reuters) -The European Central Bank is pushing Raiffeisen and UniCredit to holdsome capital as a buffer against potential risks stemming from their Russia businesses, two sources with knowledge of the matter said.
The ECB is seeking to address the dangers the two banks still face by operating in a country in which they no longer have effective control of their own activities, one of the people said.
The regulator could adjust the lenders' individual capital demands, which supervisors set yearly to reflect risks which are not covered by broader, industry-wide requirements, the sources said.
Reuters could not establish the size of a potential capital adjustments for the banks. Raiffeisen also faces demands from the ECB for a capital cushion to reflect its exposure to risky commercial real-estate loans, one of the sources said.
Spokespeople for the ECB and UniCredit declined to comment.
A spokesperson for Raiffeisen said that the bank's capital requirements would increase from the start of next year, declining to comment on Reuters' reporting.
A reserve for Russia would be tantamount to an additional cost for continuing to operate in the nation, almost three years after its full-scale invasion of Ukraine. Austria's Raiffeisen Bank International RBIV.VI and Italy's UniCredit CRDI.MI, the biggest foreign banks in Russia, have been very slow to dial back their activities fuelling tensions with the regulator.
Reporting by Alexandra Schwarz-Goerlich, John O'Donnell and Valentina Za; Editing by Elisa Martinuzzi and Tommy Reggiori Wilkes.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
