Connect with us

Hi, what are you looking for?

Economy

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 banks’ 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 adjustment 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 effectively impose an additional cost for continuing to operate in the country.

Almost three years after Russia’s invasion of Ukraine, Raiffeisen Bank International and UniCredit, the biggest foreign banks in the country, have been slow to dial back their activities fuelling tensions with the regulator.

The ECB earlier this year ordered both to quickly pare back their activities with Russia, including international payments, or face possible penalties.

Raiffeisen has been working to meet ECB demands and reduce its ties to Moscow, including by reducing its processing of euro payments involving Russia, another source with direct knowledge of the matter said.

UniCredit sued the ECB over its order to step back in Russia, which the bank has said collides with Russian and international sanctions laws. In the meantime, the bank cut back payments, loans and deposits in Russia during the third quarter, moving closer to reduction goals it has set for 2025.

This post appeared first on investing.com

    Fill Out & Get More Relevant News


    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    You May Also Like

    Investing

    Fisker (NYSE: FSR) stock price has been one of the best-performing electric vehicle (EV) stocks this week even as Tesla slumped. The shares jumped...

    Investing

    Newmont (NYSE: NEM) reported mixed financial results even as the price of gold approached its all-time high. In all, the company’s earnings per share...

    Investing

    The Fox Corporation (NASDAQ: FOX) stock price has been under pressure as investors come to terms with the abrupt firing of Tucker Carlson. The...

    Investing

    NatWest (LON: NWG) share price rose sharply, helped by the strong results from Barclays. The stock jumped to a high of 274.8p, which was...




    Disclaimer: Oldamericanbroker.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the-company.


    Copyright © 2024 Oldamericanbroker.com