Erste Bank boosted by Romanian acquisition

Austria's Erste Bank beat its full year target for profits growth after a larger than expected 37 per cent rise in net fourth quarter earnings after minorities to €277m.

The group, which has expanded aggressively into central and eastern Europe, said full year net profits after minority interests climbed by more than 30 per cent to €932.2m – well above its target of at least a 20 per cent increase.

The figures were boosted by a smaller than expected restructuring charge of €23m at Banca Comerciala Romana, the Romanian bank bought by Erste last year. BCR raised net profits before restructuring costs by almost 38 per cent to €254m last year.

Erste's results were also helped by a drop in the cost income ratio to 59.5 per cent from 61.7 per cent.

The group, which has recently expanded its presence in Ukraine and Croatia, forecast net profits would rise by a further 25 per cent this year, slowing to 20 per cent a year in 2008 and 2009. The bank proposed raising the dividend by 18 per cent to €0.65 a share.

Copyright 2007 Financial Times