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Chairman of Austria's RBI says no point in scrapping dividend

VIENNA, Oct 31 (Reuters) - The chairman of Austria's Raiffeisen Bank International said he sees no point in scrapping dividends to build up capital, he told Reuters on Thursday.

Walter Rothensteiner - who is also chief executive of unlisted Raiffeisen Zentralbank, which owns 78 percent of RBI - said banks would only alienate their shareholders by taking such measures.

"You would probably have to pay no dividend for 10 years, and then no one would give you any more capital," he said on the fringes of an RZB event.

RBI is expected to have to raise about 2 billion euros ($2.8 billion) in fresh capital to pay back state aid by 2017 and to strengthen its balance sheet to meet new regulatory requirements.

The bank paid out 228 million euros in dividends last year on group profit of 725 million euros.

Most of the dividend payment went to RZB, which in turn paid out dividends to its owners, the regional Landesbanken.

($1 = 0.7262 euros) (Reporting by Georgina Prodhan and Angelika Gruber)