The European Central Bank is advising Raiffeisen Bank International and UniCredit to maintain additional capital reserves to mitigate risks associated with their operations in Russia.

This advice comes as the banks continue to navigate a challenging environment where they lack effective control over their activities in the country, following the geopolitical tensions stemming from the invasion of Ukraine.

It is reported that the ECB may revise the individual capital requirements for these banks, which are assessed annually to account for specific risks not covered by broader industry standards.

Raiffeisen is also under pressure to strengthen its capital in response to its exposure to high-risk commercial real estate loans.

Consequently, the implementation of a capital buffer for Russian operations would represent an increased financial burden for both banks, which have been slow to reduce their presence in the Russian market.

The ECB and UniCredit declined to comment, while Raiffeisen confirmed that its capital requirements would rise starting next year.