EANS-Adhoc: Raiffeisen Zentralbank Österreich AG / EBA analysis addresses capital needs for RZB Group on the basis of a dramatically raised capital ratio target

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27.10.2011

EBA analysis addresses capital needs for RZB Group on the basis of a
dramatically raised capital ratio target

• RZB welcomes in principle decisions that aim to ensure greater
stability in the eurozone. • More than doubled Core Tier 1 ratio
target of 9 per cent results, according to EBA, in an additional
calculatory capital requirement of EUR 1.9 billion for the RZB Group.
RZB considers this amount to be excessive. For example, EUR 1 billion
in participation capital subscribed by private investors was not
taken into account. • RZB's sub-group RBI was not addressed in the
EBA analysis, but would have a lower additional calculatory capital
requirement. • RZB will take all necessary measures to comply with
the new requirements. From today's perspective, the RZB Group will
not need state support to do so.

Raiffeisen Zentralbank Österreich AG (RZB) in principle welcomes
decisions that aim to guarantee more stability in the eurozone.
However, the additional capital requirement as determined by the
European Banking Authority (EBA) appears to be excessive, also in
comparison with banks in such strongly impacted countries as Germany
or France. Austrian banks are seen having a calculatory capital gap
of EUR 2.9 billion, while the respective figures for France and
Germany are EUR 8.8 billion and EUR 5.2 billion.

The RZB Group has no sovereign exposure in either Greece or Ireland
and only a low volume of sovereign exposure in Italy, Spain and
Portugal. Moreover, the EBA did not take into consideration EUR 1
billion of participation capital that the RZB Group had placed with
private investors.

The RZB Managing Board will undertake all measures necessary to
ensure compliance with the new requirements. From today's
perspective, the RZB Group will not need state support to do so.

Due to the sovereign debt crisis in Europe, the EBA conducted a
survey among 70 systemic banks in the EU to establish how these would
be impacted by a mark-to-market valuation of their sovereign
exposure. In doing so, the EBA applied a Core Tier 1 capital target
of 9 per cent, more than twice as high as previous targets, as the
baseline for establishing the banks' additional capital requirements.
This new capital target ratio is to be achieved by 30 June 2012. On
the basis of these assumptions, the EBA calculated that the analysed
banks collectively had an additional capital requirement of EUR 106
billion, with EUR 1.907 million attributed to the RZB Group. These
results reflect not only the drastic rise in the core capital target
from its current level of 4 per cent (or 4.5 per cent according to
Basel III) to 9 per cent, but also the specific methodology and
assumptions applied by the EBA. The results of the EBA's analysis
were based on the RZB Group's half-year 2011 figures and will be
updated to reflect the Group's results as per 30 September 2011

In its analysis, the EBA did not address the RZB Group's sub-group
Raiffeisen Bank International AG (RBI); however, had it done so, RBI
would have evidenced a lower additional capital requirement on the
basis of the applied assumptions and methodology. The EBA stress test
results published in July 2011 established that RBI was
well-capitalised, with a Core Tier 1 ratio (according to the EBA's
definition) of 7.8 per cent in the adverse scenario applied in the
stress test.

As per the end of June 2011, the RZB Group's own funds volume stood
at EUR 12,538 million, while its Core Tier 1 capital amounted to EUR
9,290 million. The RZB Group's own funds ratio was 12.4 per cent, its
Tier 1 ratio (credit risk) stood at 11.4 per cent, while its Tier 1
ratio including market and operational risk was 9.1 per cent. The
corresponding ratios for RBI were 13.0 per cent, 11.8 per cent, and
9.4 per cent. RBI will be issuing its results for the first three
quarters of 2011 on 24 November 2011.

Further inquiry note:
Raiffeisen Zentralbank Österreich AG
Am Stadtpark 9
Andreas Ecker
43 1 71707-2222
andreas.ecker@rzb.at

end of announcement euro adhoc
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issuer: Raiffeisen Zentralbank Österreich AG
Am Stadtpark 9
A-1030 Wien
phone: 43 1 71707-2761
FAX: 43 1 71707-2371
mail: andreas.ecker@rzb.at
WWW: www.rzb.at
sector: Banking
ISIN: -
indexes:
stockmarkets: stock market: Luxembourg Stock Exchange, SIX Swiss Exchange,
Euronext Paris, Wien
language: English