Erste Bank profit rises on eastern European lending
Erste Bank AG, Austria's second-biggest lender, said profit in the Q3 rose 16% as new customers in eastern Europe borrowed more to buy homes and cars.
Net income increased to €200.6 million $255 million) from €173 million a year earlier, Vienna-based Erste said today. That was less than the €205.5 million median estimate of eight analysts surveyed by Bloomberg News. “We are very pleased with our third quarter,” CEO Andreas Treichl, who has headed Erste since 1997, said in a statement. Erste's earnings have risen as more residents of former communist countries borrow for auto and home purchases for the first time. Erste said October 12 that it expects 40% annual profit growth at its Romanian subsidiary. The company operates in eastern European countries that have a population of more than 120 million people. The bank reiterated that it expects profit to rise 25% in 2007 and by “at least” 20% this year. Erste also reported a “significant negative movement” in its operating result, which widened to €28.5 million from €1 million the year before. The adjustment was due to lower securities valuations, it said. The Austrian lender's net interest income, or money earned from lending, beat analyst estimates at €779 million. Analysts expected €761.9 million. Erste shares have risen 15% this year, giving the lender a €16.6 billion market value. (Bloomberg)
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