RBI to free up EUR 50 million in additional capital for Ukraine subsidiary

17 December 2022, 12:56 AM
Ukrainian Raiffeisen may additionally capitalize by EUR 50 million (Photo:REUTERS/Leonhard Foeger)

Ukrainian Raiffeisen may additionally capitalize by EUR 50 million (Photo:REUTERS/Leonhard Foeger)

The Multilateral Investment Guarantee Agency (MIGA) plans to provide guarantees for Raiffeisen Bank International AG (RBI) to free up EUR 50 million for its Ukrainian subsidiary, Raiffeisen Bank, Interfax-Ukraine reported on Dec. 16.

"The purpose of MIGA's proposed guarantees is to help RBI mitigate risk on some of its assets, resulting in a reduction in RBI's risk-weighted assets (RWA) on a consolidated basis," the agency said in their statement.

The released RWA is expected to help Raiffeisen Bank maintain lending, thereby supporting employment and economic activity in the country at war.

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According to the agency, RBI has filed a corresponding application to cover the risks of expropriation of funds, which is necessary to cover the required cash reserves for a period of one year and one day.

The agency indicates that the MIGA Board of Directors will review this project on Dec. 20.

The agency also notes that it’s about the use, among other things, of the bank's retained earnings for additional capital.

Raiffeisen Bank continues to operate in Russia. It was reported in September that the sanctioned Russian bank VTB Bank wanted to exchange its European subsidiary for the Russian assets of Raiffeisen.

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