Exclusive-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 (Reuters) - The European Central Bank is pushing Raiffeisen and UniCredit to hold some 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 and Italy's UniCredit, the biggest foreign banks in Russia, have been very slow to dial back their activities fuelling tensions with the regulator.

Source: Investing.com