By Marcus Williams
Raiffeisen International is considering a merger with its Austrian parent group in a bid to reduce its funding and reduce exposure to the uncertain Central and Eastern European region.
The bank’s shares dropped as much as 10% following news on Tuesday of a possible tie-up.
Raiffeisen, the largest lender in Central and Eastern Europe, reported a 78% plunge in net profit for 2009, down 78% to €212 m from €982m a year earlier.
Raiffeisen International said a merger with parent Raiffeisen Zentralbank Oesterreich is only one of several strategic options being considered. It added, though, that regardless of the strategic option pursued, a listing on Vienna Stock Exchange will be maintained.
Raiffeisen Zentralbank currently controls some 70% of the share capital in Raiffeisen International. The two banks were separated in 2005, where Raiffeisen International was spun off and publicly listed.
As of 30 September 2009, Raiffeisen International managed banks in 17 markets of the region.
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