The Polish arm of Austrian banking group Raiffeisen Bank International (RBI) has submitted an IPO prospectus to market watchdog KNF, local media reported on April 26.

RBI was ordered to float 15% of Raiffeisen Polbank on the Warsaw Stock Exchange after it bought the unit from Greece's EFG Eurobank in 2012. It has been handed a deadline of June by the regulator. However, the banking sector, grappling with low interest rates and adverse regulatory measures, has not been an attractive offer for investors lately, as seen during the IPO of Idea Bank in April last year.

RBI has been trying for over a year to find a strategic investor to take Raiffeisen Polbank off its hands. However, fulfilling a formal requirement for the offer, the Austrian group has now submitted an IPO prospectus to the watchdog, reports Puls Biznesu, without citing its sources.

Yet in the current environment, the chances of a successful listing for the RBI unit look slim. The adverse conditions will likely have RBI ask KNF to move the IPO deadline back, banking sources claim.

On top of the pressures on profitability, RBI is also burdened with a substantial portfolio of Swiss franc-denominated mortgages. The Polish authorities are seeking to push through a scheme to convert CHF loans to the local currency, which is likely to cost banks billions.

RBI would like to separate its Swiss franc loans portfolio in order to sell a “clean” bank, but that process has not yet been given the green light by KNF, the newspaper claims. Meanwhile valuations are suffering. The recent deal agreed by Alior to take over BPH from GE Capital saw the lender valued at just 0.9 of book value.

RBI is reportedly seeking a valuation of 1x book value, which would set the IPO value at close to PLN1bn. However, pundits say they doubt it will hit the mark.

Meanwhile, analysts at Erste worry that launching the float at the current time could impact other banking stocks on the WSE. "The IPO is one of the obligations of Raiffeisen and the bank keeps declaring that it plans on that happening," they write. "The increased supply of banking shares could limit investor interest in other banks. On the other hand, the profitability of Raiffeisen Polbank is well below that achieved by the largest peer group."