Austrian bank RBI warns it may post another loss this year

* Confirms FY loss 493 million euros

* Says restructuring charges may lead to 2015 loss

* Expects loan loss provisions to stay high but below 2014

* Sticks to 12 pct core capital ratio goal (Adds comments from news conference, market reaction)

By Michael Shields

VIENNA, March 25 (Reuters) - Raiffeisen Bank International (LSE: 0NXR.L - news) (RBI) warned on Wednesday it may post a second straight year of losses in 2015 as it books the cost of scaling back after decades of expansion in central and eastern Europe.

Emerging Europe's second-biggest lender said last year it expected to earn hundreds of millions of euros in 2015, but that forecast was overtaken by the drastic restructuring steps it unveiled last month.

Vienna-based RBI was a pioneer in central and eastern Europe as communism crumbled in the former Habsburg empire but hits from Ukraine and Hungary pushed it to a loss of 493 million euros ($542 million) in 2014, its first on record.

Bankers say Austrian lenders have been perhaps been too slow to tackle some of the problems stored up during their rapid expansion eastwards and a series of shocks over the past couple of years has forced them to bite the bullet.

Raiffeisen plans to sell operations in Poland and Slovenia and its Zuno direct bank while cutting back in Russia to boost key capital targets. The restructuring costs likely to wipe out earnings this year stem from creating a division of non-core businesses in Poland, Slovenia, Asia and the United States.

The overhaul is being driven by Karl Sevelda, the bank's 65-year-old chief executive who was pressed into service in 2013 when predecessor Herbert Stepic abruptly resigned.

Sevelda's contract runs until mid-2017 and he has said he plans to see it through.

"Raiffeisen Bank International does not have an income problem," said Sevelda. "The business model is intact."

He said the bank should return to profit in 2016. RBI said its 2015 consolidated result "may be negative" as it expects to book most of its 550 million euros in revamp costs this year.

SHARES STEADY

RBI shares were down 1.3 percent to 12.11 euros by 1430 GMT following the statement, only slightly underperforming a 0.7 percent dip in the European sector.

Thomson Reuters data shows that while Austrian, U.S. and German investors have sold stock in RBI, Nordic and Polish funds have been buyers.

The stock, which hit an all-time low in January, trades at about 8 times 12-month forward earnings, a discount to Austrian peer Erste Group on 11.4 times and CEE market leader UniCredit (Milan: UCG.MI - news) on 13.2 times, according to StarMine, which ranks analyst estimates by their track record.

RBI said net provisions for bad loans at its core businesses were set to stay high but fall from the 1.72 billion booked in 2014. It reiterated that it would put strengthening its balance sheet ahead of dividend payouts as it implements the revamp.

Raiffeisen said the downsizing campaign would release about 16 billion euros worth of gross risk-weighted assets (RWAs) and cut costs by a fifth from 2014 levels.

It expressed confidence it would successfully complete the sale of its bank in Poland, where it became a top-eight player after acquiring Polbank in 2012.

The move never lived up to its billing and even though a condition of the purchase was that the bank would be listed in 2016 RBI is pressing ahead with the sale. It said on Wednesday it was in talks with regulators about how to resolve this.

It said it was in advanced negotiations to sell its Slovenia business, and was seeing strong interest for Zuno. It expected to sell a minority stake in its loss-making Ukraine unit to the European Bank for Reconstruction and Development this year.

The bank said it was on track to cut risk weighted assets in Russia by a fifth by the end of 2017. With a profit of 340 million euros, Russia was its single most lucrative market last year but it will reduce its presence to 44 Russian cities by the end of 2015 from 65.

($1 = 0.9157 euros) (Editing by David Clarke)