Core Tier 1 capital ratio would be 7.8 per cent on the basis of simulated adverse scenario
Result well above 5 per cent capital benchmark set by EBA
Business model proves stress resistance
Raiffeisen Bank International AG (RBI) has clearly passed the EU-wide stress test conducted by the European Banking Authority (EBA). Under the stress test's simulated adverse scenario, RBI would post a Core Tier 1 ratio of 7.8 per cent, well above the 5 per cent Core Tier 1 capital benchmark established by the test.
""The fact that Raiffeisen Bank International has convincingly passed the stress test reflects the strength of our business model and our diversified positioning as a leading universal bank across 15 markets in the growth region of Central and Eastern Europe, as well as a leading corporate and investment bank in Austria,"" said Herbert Stepic, CEO of RBI. ""Even under the test's adverse scenario, RBI's Core Tier 1 ratio would remain well above the 5 per cent capital benchmark set by the EBA,"" Stepic added.
The stress test was carried out by the EBA in cooperation with the Austrian central bank OeNB, the Austrian Financial Markets Authority (FMA), the European Central Bank (ECB), the European Commission (EC) and the European Systemic Risk Board (ESRB).
EBA stress test methodology
The EU-wide stress test, carried out across 91 banks covering over 60 per cent of the EU banking system total assets, seeks to assess the resilience of European banks to severe shocks and their specific solvency to hypothetical stress events under certain restrictive conditions.
The assumptions and methodology applied in the test were established to assess banksâ€™ capital adequacy against a 5 per cent Core Tier 1 capital benchmark and are intended to restore confidence in the resilience of the banks tested. The adverse stress test scenario was set by the ECB and covers a two-year time horizon (2011-2012). The stress test was carried out using a static balance sheet assumption as at December 2010. The stress test does not take into account future business strategies and management actions and does not provide a forecast of RBI's profits.
As a result of the shock assumed in the test, the estimated consolidated Core Tier 1 capital ratio of RBI would change to 7.8 per cent under the adverse scenario in 2012, compared to 8.1 per cent as of end of 2010, as determined by the capital definition set by the EBA stress test. RBI thus meets the capital benchmark set out for the purpose of the stress test.
Stress tests scenarios do not provide a forecast
The detailed results of the stress test under the baseline and adverse scenarios, as well as information on RBI's credit exposures and exposures to central and local governments are provided in the accompanying disclosure tables (see ""Downloads"" section), which are based on the common format provided by the EBA.
The stress test was carried out based on the EBA common methodology and key common assumptions (e.g. constant balance sheet, uniform treatment of securitisation exposures) as published in the EBA Methodological Note (see below for link). Therefore, the information relative to the baseline scenarios is provided only for comparison purposes. Neither the baseline scenario nor the adverse scenario should in any way be construed as a bank's forecast or directly compared to bank's other published information.
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RBI disclosure template for EBA stress test:http://investor.rbinternational.com/fileadmin/ir/RBI_Disclosure_Template_EBA_Stresstest_2011.pdf
Austrian central bank (OeNB) press release on EBA stress test:http://www.oenb.at/en/presse_pub/aussendungen/2011/2011q3/pa_eba_banken-stresstest.jsp
EBA -- Methodological Note
EBA â€“ Additional details on scenarios, assumptions and methodology
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Raiffeisen Bank International AG (RBI) regards both Austria, where it is a leading corporate and investment bank, and Central and Eastern Europe (CEE) as its home market. In CEE, RBI operates an extensive network of subsidiary banks, leasing companies and a range of other specialised financial service providers in 17 markets.
RBI is the only Austrian bank with a presence in both the world's financial centres and in Asia, the group's further geographical area of focus.
In total, around 60,000 employees service about 14 million customers through around 3,000 business outlets, the great majority of which are located in CEE.
RBI is a fully-consolidated subsidiary of Raiffeisen Zentralbank Ã–sterreich AG (RZB). RZB indirectly owns around 78.5 per cent of the common stock, the remainder is in free float. RBI's shares are listed on the Vienna Stock Exchange. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country's largest banking group, and serves as the head office of the entire RZB Group, including RBI.
For further information please contact Peter Klopf (+43-1-71 707-1930, [email protected])http://www.rbinternational.com, http://www.rzb.at