(Recasts with Raiffeisen comment, adds Vienna to dateline)
WARSAW/VIENNA, July 6 (Reuters) - Austria's Raiffeisen Bank International (RBI) has suspended the planned listing of its Polish unit because of "an insufficient level of interest" from investors, it said on Thursday.
RBI was due to sell a 15 percent stake in an initial public offering to fulfil a commitment to the Polish regulator, KNF, which demands lenders are listed to ensure better transparency and safety of Poland's banking sector.
Raiffeisen pushed last month for the listing to be postponed, arguing there was insufficient demand for a stake in a bank that is forced to set a large amount of capital aside for a portfolio of mortgages denominated in Swiss francs. It also wanted more time for a cost-cutting programme to take effect.
But the regulator stuck by its demand that the listing take place, having already granted Raiffeisen a one-year extension last year.
"Raiffeisen Bank International AG decided today to suspend the initial public offering of its subsidiary Raiffeisen Bank Polska S.A.," RBI said in a statement, confirming a Reuters report earlier on Thursday that there were too few buyers.
"This was due to an insufficient level of interest in the offer on terms that meet the parameters of RBI's commitment to the Polish Financial Supervisory Authority to float shares of Raiffeisen Bank Polska on the Warsaw Stock Exchange," it added.
The IPO prospectus for Raiffeisen Bank Polska IPO-RBP.WA, known as Polbank, lists a number of reasons why the listing could be scrapped, including insufficient demand for the shares and an unsatisfactory price.
Raiffeisen's chief executive had previously questioned how much demand there would be for the stake. But a Raiffeisen spokeswoman said the bank had attempted the listing in good faith.
"We took this IPO very seriously. We spoke to more than 100 investors. We sent more than 350 research reports. We carried out a very detailed investor analysis beforehand. And we completed roadshows in Paris and Warsaw," the spokeswoman said.
Raiffeisen said it was in talks with KNF on the next steps.
"RBI has filed a supplement to the issue prospectus, which is still subject to the approval of the Polish regulator. RBI is in discussions with the Polish regulator on how to proceed," it said.
The stake is worth around 950 million zloty ($256 million) at book value, but investors have demanded a hefty discount due to the bank's low profitability and the mortgage portfolio.
"There is a small subscription for 0.6 (to book value). The IPO will likely be suspended or cancelled," one source said in the afternoon on Thursday, the day on which book-building had been due to close.
$1 = 3.7084 zlotys Reporting by Agnieszka Barteczko, Marcin Goclowski and Anna Koper in Warsaw and Francois Murphy in Vienna; additional reporting by Francois Murphy in VIENNA; editing by Alexander Smith and David Evans