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Erste Bank Hungary net earnings double

Erste Bank Hungary's unconsolidated net revenues more than doubled to Ft 21.1 billion in 2007 from Ft 9.6 billion a year earlier.

The unaudited figures, prepared with Hungarian Accounting Standards, were announced by president and CEO Edit Papp at a press conference on Thursday.

After-tax profit rose 16.1% to Ft 23.4 billion in 2007.

Erste Bank expects to pay a Ft 10 billion dividend on last year's profits, Papp said in response to a question.

The bank had total assets of Ft 1,994 billion on December 31, 2007, 13% more than twelve months earlier. Papp noted client loans accounted for the entire increase.

Pre-tax profit increased 8.4% to Ft 27.7 billion in 2007.

Thanks to measures improving efficiency and cutting costs, Erste's cost-to-revenue ratio improved 3.7 percentage points to 53%, Papp said.

Erste Bank's net interest revenue rose 7.8% to Ft 59.3 billion.

Revenue from commissions and fees rose 7% to Ft 25.8 billion, while commissions and fees paid fell 1% to Ft 7.5 billion.

Operating profit rose 14.4% to Ft 27.7 billion as general administrative costs inched up just 2%.

In spite of growing competition and narrowing margins, Erste Bank managed to stay on its growth path, increasing its efficiency and its profitability, Papp said.

Erste Bank's stock of retail loans grew to Ft 667.1 billion on December 31, 2007 from Ft 503.4 billion twelve months earlier. Within this, stock of home loans rose to Ft 403.9 billion from Ft 311.2 billion, giving the bank a 12.9% share of the market.

Stock of retail deposits rose to Ft 435.2 billion from Ft 353.6 billion. Including investment fund units, stock of client deposits reached Ft 821.2 billion at the end of 2007. Assets of Erste Bank's investment funds rose to Ft 386 billion from Ft 324 billion.

Papp said Erste Bank has practically completed its large-scale expansion program and will open fewer branches this year. The bank now has 196 branches and plans to close 2008 with 210.

The bank's strategic cooperation with postal company Magyar Posta (Erste Bank was Postabank before its privatization) raised sales of products at post offices significantly last year, Papp said. Alternative sales channels also performed well. Erste aims to take a 15%-20% share of the alternative sales channel market in the mid-term. (MTI-Econews)