(Source: By Albert Otti, dpa, Hamburg, Germany (MCT) – Vienna (dpa) – Erste Group, Austria’s largest bank, said Tuesday its net profit fell 13 per cent to 454 million euros (557 million dollars) in the first half of the year, owing to losses in Romania, Hungary and Ukraine.
The year-on-year decrease would have been more dramatic if Erste had not bought back bonds, at a profit of 413 million euros.
Erste’s stocks fell by more than 3 per cent to 14.78 euros by midday in Vienna.
The bank’s Romanian subsidiary Banca Comerciala Romana made a loss of 141 million euros, reflecting the negative economic environment in the country.
Erste lowered the value of the subsidiary by 210 million euros in its books.
As the quality of loans deteriorated in Croatia, Hungary and Romania, Erste’s provisions for bad loans rose 6.6 per cent to 982 million euros.
The loss in Hungary widened to 73 million euros because of a bank tax, while operations in Ukraine made a loss of 18 million euros.
Erste said it expected a worse annual operating profit than last year’s 3.63 billion euros, as Eastern European economies are contracting and loan business is stagnating. dpa al bve Author: Albert Otti
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