April 10, 2018 / 12:25 PM / 8 months ago

Russia sanctions will not directly affect Austria's Raiffeisen Bank

LONDON, April 10 (Reuters) - Austria’s Raiffeisen Bank will not be affected directly by new U.S. sanctions on Russia, where the bank has just under 10 percent of its assets, Austria’s central bank governor told Reuters on Tuesday.

Raiffeisen Bank’s shares have dropped 16 percent since the ratcheting up of sanctions on Russia was announced on Friday. The bank had 9 percent of its total assets in Russia in 2017.

“I think this is a premature reading of the markets,” Ewald Nowotny said in an interview. “At the end of the day we do not see any direct effects on the business of Raiffeisen.”

The bank’s risk awareness should protect it even if the sanctions do have a broader impact on the Russian economy, Nowotny, who is also a European Central Bank policymaker, added.

More than 40 percent of Raiffeisen’s loan exposure in Russia is to retail clients.

The new round of U.S. sanctions has been a step up in severity, targeting some of Russia’s biggest tycoons at key companies such as aluminium giant Rusal and sending the rouble and many stocks exposed to the country tumbling.

Austria’s equity index has suffered from speculation the new sanctions could disproportionately affect the country’s companies, many of which have close links to eastern Europe. (Reporting by Helen Reid; Editing by Mark Potter)

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