Raiffeisen Bank Receives € 1.75 billion in State Capital

The owner of bank group Raiffeisen Zentralbank (RZB), whose net profit fell by nearly 95% in 2008 due to reducing the value of its assets, signed an agreement with the Austrian state to get infusions of capital of 1.75 billion euro.

Bank announced in late January that reached an agreement with the state about financing. A communication issued by the bank at that time mention that RZB wants to access the support of the financial system, introduced by Austria in October last year, with funds of 15 billion euro for banks re-capitalization, to prevent competitive disadvantages in relation to other banks that receive state support.

RZB’s net profit fell with 94%, to 48 million in 2008. The results reflect losses of 1.66 billion were generated by exposures in Iceland and Lehman Brothers. Bank is the main shareholder and supplier of liquid Raiffeisen International, the second largest lender in Europe.