Raiffaisen International stock starts trading on the Vienna Stock Exchange today. The IPO was 22 times oversubscribed. The allocation price was set at EUR 32.5 / share. The free float is estimated at 20-24%. Raiffeisen will join the ATX index as of April 28 with an estimated weighting of 7-8%. Raiffeisen International will be among the three largest banks traded in Vienna (together with Erste and BACA).
Even after the IPO the majority shareholder of Raiffeisen International remains with a 70% stake Raiffeisen Zentralbank (RZB). Raiffeisen International is the Central and Eastern European unit of RZB. RI is present in 16 countries and offers a large spectrum of commercial, investment and retail banking products and services. At the end of 2004 the bank posted a net profit of EUR 211m, up 18% y/y. RI assets amount to EUR 29bn. It serves 5 million customers through 916 branches spread over the region. The bank management expects asset growth at 20-30% annually. RI plans to use the EUR 969m raised through the IPO to finance its expansion in Central and Eastern Europe and Russia through a mix of acquisitions and organic growth.
We believe that after the successful placement we should see a revival in investors’ interest in CEE banking stocks. According to our rough calculation the shares were sold at a P/BV of 2.0, which looks cheap when compared to the average of the CEE banks. If RI was to trade at the sector average P / BV 05e of 2.6, then it could reach a price around EUR 40, which indicated a 20% growth price potential.