The open joint stock company Raiffeisen Bank Aval, which is 96% owned by Raiffeisen International Bank, is to receive a US$160mn subordinated loan facility with a 10-year tenor from Raiffeisen Zentralbank Österreich (RZB). RZB, which in turn owns more than two thirds of Raiffeisen International, strengthens the Tier 2 capital of Raiffeisen Bank Aval by extending this facility, which is accountable as supplementary capital.
On the basis of so-called stress tests (in which various market development scenarios where modelled), the National Bank of Ukraine (NBU) determined a need for additional capital at the 17 largest commercial banks in Ukraine and issued a decree that the appropriate increases be implemented by May 1, 2009.
“The capitalisation of Raiffeisen Bank Aval as compared to other banks in Ukraine is relatively good”, says Volodymyr Lavrenchuk, CEO of Raiffeisen Bank Aval. “Obtaining this facility will improve our capitalisation, enabling stable and secure operations of our bank in the future”, he adds.
“This transaction is further proof of our commitment to and support of our network banks in Central and Eastern Europe”, says Herbert Stepic, deputy chairman of RZB and CEO of Raiffeisen International. “Moreover, it may serve as a sign of our confidence, that notwithstanding the current difficulties, the Ukrainian economy and, with it, the Ukrainian financial system will weather this storm,” he concludes.
Last Updated March 06, 2009
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