August 6, 2014 / 8:01 AM / 3 years ago

Bank Austria positive on eastern Europe outlook

VIENNA, Aug 6 (Reuters) - Bank Austria, the central and eastern Europe (CEE) arm of Italian bank UniCredit reported a rise in first-half net profit and was positive about the outlook for the region despite the East-West standoff over Ukraine.

“Although the geopolitical tensions in Ukraine call European and CEE growth into question, the macroeconomic scenario has become more encouraging,” Gianni Franco Papa, head of its market-leading central and eastern Europe division, said in a statement.

Bank Austria generated net profit of 426 million euros (569 million US dollars) in the second quarter, bringing first-half net profit to 776 million, up 34 percent as falling writedowns for bad loans offset a 4 percent dip in operating income.

Parent UniCredit on Tuesday beat earnings forecasts with a 12 percent increase in second-quarter net profit, helped by a strong performance in eastern Europe.

Bank Austria’s net writedowns of loans and provisions for guarantees and commitments in the first six months fell 35 percent to 332 million euros.

In central and eastern Europe, net loan writedowns fell by a quarter to 300 million due to higher releases of provisions in several countries, especially Croatia, said Bank Austria, whose rivals in the region include Raiffeisen Bank International and Erste Group.

The provisioning charge in its Austrian customer business shrank 72 percent to 32 million due to higher releases of previous provisions and a lower new volume of impaired loans.

1 US dollar = 0.7482 euro Reporting by Michael Shields. Editing by Jane Merriman

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