Bloomberg News

Erste Group May Return to Fourth-Quarter Profit After Writedowns

February 24, 2012

Feb. 24 (Bloomberg) -- Erste Group Bank AG, eastern Europe’s second-biggest lender, probably returned to profit in the fourth quarter, leaving behind writedowns and charges as its underlying business held up.

Erste probably swung to net income of 228 million euros ($292 million) in the three months ended Dec. 31 after a net loss of 1.49 billion euros in the third quarter and net income of 245 million euros a year earlier, according to the average estimate of 11 analysts surveyed by Bloomberg. The bank is due to report results Feb. 29 at 7:30 a.m.

Net interest income, Vienna-based Erste’s biggest revenue source, may have risen by 5 percent from a year earlier to 1.41 billion euros, the average estimate showed. Provisions for bad loans probably rose by 7 percent, while fee and commission income shrunk by 3 percent.

Erste reported writedowns and loan-loss charges at its Hungarian and Romanian units and losses because of credit default swaps on Oct. 10, which will lead to a 2011 loss of as much as 800 million euros, the bank has said. It is also filling a 743 million-euro capital shortfall determined by the European Banking Authority.

The following is a table of analyst estimates and results from the previous and year-earlier quarters. The figures are in millions of euros.

The following banks participated in the survey: Barclays Capital, Concorde Securities, Cyrrus, Deutsche Bank, HSBC, ING, Kepler Capital Markets, Mediobanca, Raiffeisen Centrobank, UBS, Wood & Co.

--With assistance from Thomas Mathews in London. Editors: Steve Bailey, Keith Campbell

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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