* 2017 net profit up 4 pct to 1.31 billion euros
* Online platform George has 2 mln active users
* To rollout the platform across group’s seven markets
* Shares gain as much as 3.7 percent (Adds CEO, analyst comments, shares, background)
By Kirsti Knolle
VIENNA, Feb 28 (Reuters) - Austrian lender Erste Group is rolling out its online banking platform across the seven countries in which it operates to help tap into an economic upswing in central and eastern Europe, and will consider new markets after encouraging early results.
Chief Executive Andreas Treichl said the George platform had attracted particularly younger customers to the bank’s broader product range in its first markets of Austria, the Czech Republic and Slovakia.
Around 20 percent of consumer loans were arranged digitally in those countries in 2017 and more than 30 percent of new deposits opened on the platform, the bank said, putting the number of active users at 2 million.
Erste will invest in George to reach all of its 16 million customers, though IT spending will not be as high as in 2017, Treichl told a conference call on Wednesday, as Erste reported a 4 percent rise in 2017 net income.
“Our number one priority with George is that we are as fast as possible to make George available to all our banks in our region,” he said.
Treichl said rollouts in Romania, Hungary and Croatia were a priority, and he also wanted to open up the platform to products from other financial services firm.
“If we have the capacity and if we see a good chance and we have the resources ... to move into another market and we see that George could be attractive enough that we can attract a strong client base without having a physical presence ... we’re going to do it,” he added, without elaborating.
Erste said it would invest further in the digitalisation of its back-office, but not spend as much as last year - addressing a concern among analysts.
“Costs should stabilise from 2018, (which) would be taken positively from the market,” Morgan Stanley wrote in a note to clients.
Erste shares gained as much as 3.7 percent within a flat European sector index.
The nearly 200-year-old bank expects 2018 net interest income - profit from loans minus funding costs - to increase slightly from 4.35 billion euros ($5.32 billion) in 2017, thanks to rising short and long-term interest rates, mainly in the Czech Republic and Romania.
It is aiming for a return on tangible equity ratio of more than 10 percent in 2018 after 11.5 percent at the end of 2017.
The bank said it was particularly optimistic about the Czech market, partly due to an expected further rate hike this year. It serves 4.7 million customers in the Czech Republic, more than in Austria, and recently increased its market share.
Erste reported 2017 net profit of 1.31 billion euros, buoyed by a rise in interest rates in eastern Europe and steady growth in banking fees and lending income.
Its fully loaded common equity tier 1 (CET 1) ratio, a measure of capital strength, rose to 12.9 percent of risk-weighted assets from 12.4 percent at the end of September.
The group plans a 20 percent increase in the dividend to 1.2 euros per share for 2017.
$1 = 0.8173 euros Reporting by Kirsti Knolle Editing by Louise Heavens and Mark Potter