(Adds RBI comments) KIEV/VIENNA, Nov 25 (Reuters) - The European Bank for Reconstruction and Development (EBRD) is to buy 30 percent of Raiffeisen Bank Aval, the Ukrainian unit of Austria’s Raiffeisen Bank International (RBI), the banks said on Wednesday. The EBRD has said the well-flagged investment in Ukraine’s second-largest Western-owned bank would send a positive signal to the market during a period of political and economic crisis. RBI said the EBRD would participate in a capital increase worth 122 million euros ($129 million) at Bank Aval, boosting the Ukrainian bank’s Tier 1 ratio. The capital increase is subject to shareholder approval in a vote due on Dec. 3. RBI’s stake in Bank Aval will fall to around 67 percent from 96.2 percent, though the exact percentages hinge on the extent to which Aval’s independent shareholders take part in the share issue. Bank Aval had a Tier 1 ratio of 6.86 percent under local standards at the end of September, well above the minimum 4.0 requirement of the Ukrainian National Bank, RBI said. The threshold will increase to 7.0 percent by 2019. After the transaction Bank Aval’s Tier 1 ratio will be 14.19 percent under local standards, based on proforma figures and actual exchange rates. RBI is in the midst of a radical restructuring in central and eastern Europe to shrink its balance sheet and improve its capital ratios. ($1 = 0.9446 euros) (Reporting by Natalia Zinets in Kiev and Michael Shields in Vienna; Editing by Andrew Osborn and David Holmes)
The European Bank for Reconstruction and Development (EBRD) is reportedly to acquire a c. 30% stake in Raiffeisen Bank Aval, the Ukrainian unit of Raiffeisen Bank International (RBI). The deal will see RBI's stake in the Ukrainian unit fall from 96.2% to around 67%, with the EBRD participating in a capital increase of €122m in the unit, boosting its Tier 1 ratio; this capital increase will be subject to shareholder approval on 3rd December. Despite the increase, Bank Aval already had a Tier 1 capital ratio exceeding requirements in September, of 6.86%, over the requirement of 4%.