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VIENNA, Aug 10 (Reuters) - Austria's Raiffeisen Bank International on Thursday announced an improved outlook for the year on the back of a jump in second-quarter profit as economic conditions in eastern Europe improved and write-downs shrank dramatically.
Raiffeisen, which operates across eastern and southeastern Europe, made a surprise announcement last month that its second-quarter net profit would be better than expected at around 365 million euros ($428.6 million), compared with 125 million euros in the same period a year earlier.
It narrowed the figure to 367 million euros on Thursday and raised part of its outlook, predicting net provisioning for impairment losses would be significantly below last year's level rather than just below it.
"The good overall macroeconomic situation also had a positive impact on non-performing loans. The NPL ratio was 7.3 percent at mid-year, 1.3 percentage points lower than at the beginning of the year," said Raiffeisen, beating its previous target of around 8 percent by the end of this year.
"We expect the NPL ratio to reduce further in the medium term," it said, adding that it had sold bad loans worth 469 million euros in the first half of the year for more than their value on its books.
Net provisioning for impairment losses, almost always a negative number, turned positive, to 4 million euros, compared with a cost of 298 million euros in the same period last year.
Its fully loaded common equity tier 1 ratio, a measure of capital strength, rose to 12.8 percent, close to its medium-term target of around 13 percent, but it kept that target unchanged. (Reporting by Francois Murphy; Editing by Michael Shields)