The European Central Bank (ECB) is advising Raiffeisen Bank International and UniCredit to strengthen their capital reserves in order to address risks associated with their operations in Russia.

The ECB is concerned about the banks" exposure in a region where they have limited control over their activities, which may lead to adjustments in their individual capital requirements.

Additionally, Raiffeisen is facing further demands from the ECB to maintain a capital cushion due to its exposure to high-risk commercial real estate loans.

Consequently, Raiffeisen has announced that its capital requirements will increase from early next year.

This decision comes after nearly three years since Russia"s invasion of Ukraine, as both banks have been slow in reducing their operations in the country, causing tensions with the regulator.