STOCKS NEWS EUROPE-Raiffeisen shares drop on Ukraine worries

Shares in Raiffeisen Bank International (Other OTC: RAIFF - news) (RBI) fall more than 9 percent on concern about the Austrian lender's exposure to Ukraine.

Societe Generale (Paris: FR0000130809 - news) cites holdings of Ukrainian sovereign debt by Raiffeisen and UniCredit Bank Austria. For a FACTBOX see

"A potential writedown or haircut on Ukrainian government bonds could necessitate recapitalising the Ukrainian subsidiaries," it says, but adds a 50 percent haircut would have an impact of less than 3 basis points on their core capital.

"This is something that should be shrugged off by investors. RBI is smaller and has higher relative Ukrainian exposure but we believe it to be manageable," its adds.

Raiffeisen held around 450 million euros ($621.5 million) worth of Ukrainian sovereign bonds at mid-February, almost all of it in local currency so less risky than foreign-currency debt, it said last week.

RBI shares are down 7 percent at 23.48 euros by 0910 GMT while UniCredit (Berlin: CRIH.BE - news) stock falls 3 percent to 5.59 euros.

Erste Bank (Other OTC: EBKDY - news) analyst Guenter Hohberger notes that other banks with Ukraine exposure such as Hungary's OTP are also under pressure.

"Raiffeisen is certainly no outlier with its Ukraine exposure," he says.

Reuters messaging rm://michael.shields.thomsonreuters.com@reuters.net

($1 = 0.7240 euros)