Erste has posted a net
profit of €260.6m ($387.7m), an increase of 2.1% from the same
period a year ago, for the three months to 31 March.

Erste’s net interest
income declined by 2.1% to €1.29bn following a 15 basis point fall
in the net interest margin from 3.03% a year ago to
2.88%.

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Highlights included a
2.1% increase to €481.2m in Erste’s net commission
income.

Other highlights
included:

  • Risk costs declined by 13.4% from €531.2m
    (164 basis points of average customer loans) in Q1 2010 to €460.1m
    or 138 bps;
  • Customer deposits increased by 1.9% to
    €119.2bn;
  • Total assets increased by 3.7%
    year-on-year to €213.5bn;

Andreas Treichl, CEO of
Erste Group, said:

“Erste Group has made a
good start to the new financial year, posting an increase in net
profit as a result of declining risk costs and despite the
significant negative impact from the banking taxes in Austria and
Hungary.

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“While Romania and
Hungary continued to work through economic issues and are not
expected to show meaningful improvements before the second half of
2011, the performance in the Czech Republic, Slovakia and Austria
(the markets which account for roughly two thirds of total business
volumes) makes us confident about our ability to significantly
raise profitability again this year.”

First quarter net profit
in the Czech Republic increased by 45.5% to €130.1m; in Slovakia,
the net profit soared by 69% to €45.4m.

By contrast, Erste’s
unit in Hungary posted a first quarter loss of €31.8m from a net
profit of €6.9m in the year ago quarter while in Romania profit
slumped by 92% to €1.1m.