Shares of Raiffeisen Bank International (RBI) saw a significant increase in early trading on Wednesday following the announcement that the Austrian bank plans to acquire a stake in Austrian construction company Strabag. The news sent shares trading 10% higher to EUR18.25.
RBI revealed on Tuesday that its Russian subsidiary intends to purchase a 27.78% stake in Strabag for 1.51 billion euros ($1.66 billion) and subsequently transfer it back to the group in the form of a dividend in kind. This strategic move by RBI would allow the company to extract at least EUR1.1 billion in equity from its Russian subsidiary and reduce the amount of capital in Russia by 37.5%.
According to research note from JPMorgan analysts Samuel Goodacre and Mehmet Sevim, this deal represents a significant step toward RBI's eventual exit from Russia. Furthermore, it would also help mitigate the potential worst-case capital ratio hit from a write-off of Russian assets, reducing it from 210 to 90 basis points.
Citi analysts, in a separate research note, conservatively estimated that this acquisition could contribute around EUR110 million in additional group earnings annually.
This strategic move by RBI demonstrates the bank's commitment to optimizing its portfolio and focusing on core markets. The stake acquisition in Strabag is an important step in this process.
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