(Adds details on capital buffer, background on merger plans)
VIENNA, Feb 8 (Reuters) - Raiffeisen Bank International's (RBI) fully loaded common equity tier 1 (CET 1) ratio stood above the lender's own expectations at 13.5 percent at the end of 2016, it said on Wednesday, up from 12.3 percent at the end of September.
The improved capital buffer was due to it closing the sale of its Polish leasing business, foreign exchange effects, the shedding of other risk-weighted assets and the inclusion of after-tax profit in the last two quarters of the year, it said.
RBI is set to merge with its majority owner Raiffeisen Zentralbank with a target for the combined bank's ratio of 12 percent by the end of 2017.
RBI, which operates across central and eastern Europe, and RZB together came third-last in a stress test of 51 major European lenders last year, increasing pressure on RZB to take action.
RBI's full-year profit after tax, according to preliminary figures was 574 million euros ($613.55 million), up from 435 million a year earlier as its net provisioning for impairment losses shrank by around 40 percent to 754 million euros.
$1 = 0.9355 euros Reporting By Shadia Nasralla, editing by David Evans