By Nicholas Watson of bne in Vienna

The hits on emerging Europe’s banks continue to come thick and fast as legacy problems from the 2008 crisis continue to dog the sector.

The latest example is Erste Group’s €930m loss in the first half of the year due to problems at its Romanian and Hungarian subsidiaries. Read more

Romania’s economy may be recovering from a deep crisis, but it is not recovering quickly enough for the country’s main lender, BCR.

Austria’s Erste Group this week announced that it would take a €300m goodwill charge largely due to the problems besetting BCR. So even if the International Monetary Fund is reasonably content with Romania’s economic progress, a key foreign investor is far from happy. Read more

The average Czech’s financial conservatism is legendary – and Tuesday’s first-half results from Erste Group Bank perfectly illustrate this.

The Austrian bank, which together with Raiffeisen Bank International and UniCredit Group, make up the triumvirate of emerging Europe’s largest lenders, reported first-half operating profit down 11 per cent to €1.75bn as the bank was unable to cut costs at a fast enough rate to make up for the 6.7 per cent decline in revenue. Read more

A bit of relief for those involved in central and east European banking. Austria’s Erste Bank, eastern Europe’s second-largest lender after Raiffeisen International Bank, on Wednesday beat analysts’ forecasts for its fourth quarter profits and bad debt charges.

The statement said net profit rose to €254.1m in the three months to December, an increase from the €244.9m recorded in the same period of 2010, and predictions of a €230m profit. Erste shares leapt 4.6 per cent on the news and later traded 3 per cent higher, taking the gain for the year to 37 per cent. As with Raiffeisen, investors have got over the gloomy prognostications about bad debts and credit crunches that spooked the sector late last year. But, as with Raiffeisen, there is still work to be done rebuilding confidence. Read more

It’s not easy being a bull in central and eastern Europe these days. No matter how much you might want to sell the story the facts just keep getting in the way.

Henning Esskuchen, head of CEE equity strategy for Erste, is one such bull who finds himself in a very tough position. In a report on CEE equity strategy Esskuchen’s normal optimism is very definitely dimmed… not that he couldn’t find some sparks of light in the gloom. In his own words, Esskuchen “dares to hope”. Read more

With delicious irony, Erste Bank (EBS:VIE) on Friday chose a big Vienna financial conference to announce details of plans to cut back in Hungary with the loss of a quarter of its branches and up to 450 staff.

Chief executive Andreas Treichl turned Capital Markets Day, an event that generally celebrates banking, into an occasion for delivering some bad financial news to BudapestRead more

Just when it seemed that the perilous waters of central and east European banking were becoming a little safer, along comes a hurricane from Austria’s Erste Bank in the form of a €939m write-down on Romania and Hungary and the forecast of a €800m loss for 2011.

The annnouncement initially wiped 18 per cent off  Erste’s shares, though they later recovered to trade ‘just’ 12 per cent down. The bank won’t pay a dividend for the year and won’t be repaying an Austrian government capital injection any time soon. Sobering news for the whole sector. Read more

Vienna’s days as a business hub for central and eastern Europe are numbered, says a leading Austrian banker. The beneficiaries will be Prague, Warsaw, Bratislava and other cities in ex-Communist central Europe, developing into commercial capitals in their own right.

“The risks of doing business in central and eastern Europe have fallen so much that in 10-15 years from now nobody who wants to invest in the Czech Republic will do it via Austria,” says Andreas Treichl (pictured), chairman of Erste Bank. Read more