Bank Austria sees sign of central Europe lending slowdown
* H1 net operating income up 11.1 pct to 997 mln eur
* Net profit up 1.2 pct to 646 mln eur
* Net writedowns of loans in Austria, CEE region down 18.6 pct
VIENNA, Aug 3 (Reuters) - UniCredit unit Bank Austria, emerging Europe's biggest lender, sees demand for loans slowing in the region after its lending volume rose 3.3 percent in the first half, helping it boost net profit.
Turkey and Russia, which together generated half of Bank Austria's pre-tax profit in the half, continued to power growth at the Vienna-based lender which has sailed through the financial crisis without having to seek state aid.
Chief Financial Officer Francesco Giordano gave a generally upbeat assessment of its business in volatile markets.
"There are some signs of a slowdown in demand for credit in central Europe in particular, however we are maintaining or increasing market shares in general and we thnk we still - thanks to our franchise - are able to increase our business performance," he told reporters.
Net operating profit at the bank rose 11 percent in the half to 997 million euros ($1.21 billion) as net interest income edged up and net writedowns on loans and provisions for guarantes and commitments fell nearly a fifth to 568 million.
Provisions for risks and charges more than doubled to 67 million as it set aside money for a credit card bonus points programme in Turkey and it booked costs for legal cases including suits by victims of Bernie Madoff's Ponzi scheme.
Writedowns on Greek, Spanish and Portuguese bonds as well as a sharply higher tax bill meant net profit rose just 1.2 percent to 646 million, still more than half the profit that parent UniCredit posted.
Lending volume in the first half advanced to 136 billion euros and customer deposits gained 9.4 percent to 107.4 billion.
Big Austrian banks are the largest lenders in central and eastern Europe. They include Erste Group Bank and Raiffeisen Bank International (RBI), which are vying for second place in the region.
Erste on Tuesday reported first-half net profit fell nearly 13 percent to 453.6 million euros. It cut its 2012 operating profit outlook for the second time in three months, now seeing results slipping from 2011.
RBI releases first-half results on Aug. 29
($1 = 0.8224 euros) (Reporting by Michael Shields; Editing by David Cowell)
- Tweet this
- Share this
- Digg this