Austria's Raiffeisen International bank posted a 51 percent rise in third-quarter net profit, beating expectations and easing worries for investors grappling with multi-billion dollar writedowns at western banks.
Net profit at eastern Europe's third-biggest bank rose to 224 million euros ($329 million) in the quarter, beating all estimates in a Reuters poll as revenues were higher and costs and risk provisions lower than analysts' estimates.
Raiffeisen's results were unscathed by large writedowns on subprime debt or similar instruments, helping its shares to rise against the trend along with other banks geared to retail clients such as Germany's Deutsche Postbank.
The stock traded up 4 percent at 109.60 euros by 1151 GMT, making it one of the top gainers in the DJ Stoxx banking index, which fell by 1.5 percent on renewed concerns about bank writedowns related to the global credit crunch.
"It is very good that you can see there is no impact from subprime or CDO-related writedowns," said UniCredit analyst Paul Wessely. "That's very positive." Earnings rose by two thirds on the Balkans and in Central Europe, where they were flattered by the sale of a real estate asset in Hungary. Russian earnings rose only 10 percent, as a 20-million euro writedown on Russian derivatives weighed. Net interest income, its main revenue source, grew by 50 percent, commission income by 32 percent, and trading income was slightly up despite the global market weakness. All came in higher than the average analyst estimate.
At the same time, operating costs rose 30 percent, slightly less than expected, despite an expensive expansion programme in Russia and rising wages in central Europe. Loan loss provisions, closely eyed at banks in the region where most customers have no credit history and worries about credit quality are lingering, fell and were lower than expected.
Raiffeisen stuck to its forecast of full-year net profit of at least 750 million euros even though it had reached 83 percent of that after the first nine months. Analysts on average expect 811 million euros, according to Reuters Estimates.