Austria-headquartered Erste has posted first half net profits of €471.9m ($612.9m), down 4.1% from the corresponding period last year.
But first half net profits at Erste’s retail and SME unit grew by 5% to €363.5m.
Group-wide, Erste’s net interest income grew by 7.2% to €2.68bn on the back of an improving net interest margin, which rose to 3.04%, from 2.92% in the first half of fiscal 2009.
The cost-income ratio improved to 48.8%, from 52.5% from the year ago period.
Total assets increased by 3.7% €209.1bn with customer deposits up by 4% to €116.6bn.
Erste ended the first half with a loan-to-deposit ratio of 112.4% (H109 115.3%).
The ratio of non-performing loans rose in the first half to 7.3% of total loans from 5.9% a year ago.
Looking ahead, Erste said that risk costs would remain elevated in 2010 and warned that it could not predict the speed of economic recovery in Central and Eastern Europe.