October 30, 2019 / 7:53 AM / 20 days ago

UPDATE 1-Erste Group Q3 profit beats on strong lending in eastern Europe

(Adds CEO, detail, background)

VIENNA, Oct 30 (Reuters) - Austrian bank Erste Group beat expectations with an 8% rise in third-quarter net profit thanks to rising lending in its eastern European markets and confirmed its full-year forecasts on Wednesday.

“Although across the globe, there are gathering signs of a downturn in the economic cycle, we remain confident that the central and eastern European region will continue to outpace the euro zone and that its growth will prove to be more sustainable than in the 2000’s,” said Chief Executive Andreas Treichl.

The bank, one of the largest financial services providers in the eastern part of the European Union, said net profit reached 491.1 million euros ($545.8 million) in the three months to September.

That was above the average expected 480 million euros in a poll of 15 analysts, which the bank published on its website.

It was driven by increased net interest income, higher fees and a significantly better trading result.

The lender, which operates in six eastern European markets, from the Czech Republic to Serbia and Romania, confirmed its full-year profitability target of return on tangible equity (ROTE) of more than 11%.

That ratio was at 16.1% in the third quarter and at 13% over the first nine months.

Thanks to strong demand in the Czech Republic, Romania and Hungary, net interest income grew 2.6% in the third quarter to 1.188 billion euros, in line with expectations. ($1 = 0.8998 euros) (Reporting by Kirsti Knolle, editing by Riham Alkousaa and Louise Heavens)

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