The sale of Czech/Slovak internet banking unit Zuno to Russia's Alfa Bank has been scrapped, Raiffeisen Bank International (RBI) announced on March 1

The Austrian bank agreed in September to sell the loss-making unit to ABH Holdings SA. However, the Luxembourg-based parent of Russia’s largest privately-owned bank Alfa has decided to withdraw from the contract.

RBI did not disclose the reason for the withdrawal, but said it was unrelated to the entity for sale. However, Russian banks continue to struggle for financing as Western sanctions squeeze and the economy is engulfed by recession.

At the same time, RBI is in the midst of efforts to shed a bevvy of assets around CEE as it seeks to achieve a massive reduction of its risk-weighted asset base in a restructuring programme. That said, the Austrian bank points out that offloading Zuno would not make a great deal of difference.

“The effect of the transaction on regulatory capital ratios would have been negligible. The reasoning for selling Zuno was to reduce complexity and minimize overlap within the group,” RBI said in its statement.

The bank is now examining its next step. That could include continued efforts to sell Zuno, a partial sale, or full integration of the unit into other RBI group entities.

RBI received more than 20 bids for Zuno overall during the sales process, it claimed. Suitors included BNP Paribas, Erste and Slovak millionaire Pavol Krupa, owner of investment group Arca Capital, according to press speculation.

Slovakia was the first country in which Zuno launched its operations in December 2010, while it entered the Czech Republic in 2011. As at end of December, Zuno had about 200 employees and around 255,000 clients. The internet bank managed total deposits of €775mn and a total loan portfolio of €75mn. Zuno has consistently posted large losses since it was established.