Raiffeisen Bank International (RBI) is considering selling its Russian business,  reported Russian daily Kommersant, though the report was immediately denied by the Austrian bank.

Any such sale would be a major step for RBI, which has built a very successful business in Russia, and would demonstrate that the bank's problems are much greater than previously acknowledged. 

Under regulatory pressure to raise its core capital levels, the Austrian lender has been trying to raise money and reduce its risk weighted assets through disposals, including by trying to sell off its Polish business. However, it has been without much luck so far because of uncertainty over Polish government policy on forcing banks to convert customers' Swiss franc loans into zloty.

RBI has said that now that a new Polish government is in place, it will re-start the tender, but that is expected to take most of next year.

According to Kommersant, with the Polish deal on ice, the bank’s board of directors have been exploring the possibility of selling the Russian business instead. The two operations are of roughly the same size: RBI Russian assets are €12.2bn and the Polish are €14.7bn. 

In Russia, long RBI’s main cash cow, the bank made a €73mn profit in the third quarter, with new provisions lower than expected in the current recession. Profits in the fourth quarter will be boosted by a gross €87mn from the sale of the bank’s pensions business. Nevertheless Russia’s share of RBI’s total bank profits was now at its lowest ever level at around 30%. 

RBI has always denied planning to sell its Russian business, though as part of it programme to reduce its exposure to risky markets, it aims  to reduce its assets in Russia by 20% to €8.2bn by 2017. 

RBI Russia issued a statement denying the reports: "This information is untrue. The bank has no plans to sell its Russian business. RBI has repeatedly reaffirmed its commitment to the Russian market and emphasises the importance of the Russian business to the group. Raiffeisen intends to continue its development in Russia, with the support of shareholders, " the bank's press service said in a statement.

If the bank does go on the block then there are plenty of Russian banks that would be happy to buy it.  Alfa Bank said that "if the information about the sale is confirmed, it will be interesting to consider doing so, as we have repeatedly stated," Russian daily Vedomosti reports. The two banks were in sales negotiations already in 2014 but couldn’t agree on a price, the paper claims.