Austria's Erste Bank profits down in third quarterErste Bank Erste Bank is a retail bank in Central Europe based in Vienna, Austria, and operating in Austria, Bosnia and Herzegovina, Croatia, the Czech Republic, Hungary, Romania (Banca Comercială Română), Serbia (Erste Bank Novi Sad), and Slovakia. , the biggest listed bank in Austria, said Friday that bottom-line profits were down in the third quarter as a result of lower trading and commission income and higher risk provisions. Erste Bank also announced it would issue 60 million new shares in order to beef up its core capital. The group said in a statement that it turned in net profit of 228 million euros (337 million dollars) in the period from July to September, down from profit of 260 million euros in the preceding three months. Net interest income -- the difference between interest earned on loans and interest paid out on deposits -- rose 4.4 percent to 1.34 billion euros. But trading income was down 19.8 percent at 159.9 million euros and commission income fell 4.2 percent to 425.1 million euros. Administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. were cut by 6.5 percent to 920.1 million euros. Erste Bank said it increased its risk provisions by 6.7 percent to 557.1 million euros in the quarter -- after already raising them sharply the preceding quarter as a result of the difficult situation in central and eastern Europe The term "Central and Eastern Europe" came into wide spread use, replacing "Eastern bloc", to describe former Communist countries in Europe, after the collapse of the Iron Curtain in 1989/90. . For the first nine months of 2009, net profit amounted to 720.1 million euros, half the 1.46 billion euros achieved a year earlier. The slump of 50.8 percent was largely due to the fact that the year-earlier figure was boosted by proceeds from the sale of the bank's insurance business, Erste Bank said. Adjusted for this, bottomline profits were down 16.4 percent as a result of "higher risk costs." Risks provisions more than doubled in the nine-month period to 1.45 billion euros from 602.3 million euros in January-September 2008. Nevertheless, net interest income rose in the nine months by 7.5 percent to 3.84 billion euros and trading profits jumped to 503 million euros from 184.9 million euros. "Over the past quarters, the financial crisis had a severe effect on the real economy and thereby also on Erste Group's financial results," said chief executive Andreas Treichl. "This is reflected in the higher risk costs in Austria and central and eastern Europe. We do not believe that the crisis is over ... but there are some encouraging signs ... that the worst may be behind us," Treichl said. Erste Bank said separately that it planned to issue 60 million new shares "in order to further increase its capital ratios and improve its capital structure." The shares would be priced in a range of 27.50-32.00 euros and offered to existing shareholders in a ratio of three new shares for every 16 held. If fully subscribed Fully Subscribed A situation in which an underwriting firm has successfully sold to investors all of its available issues of a public offering of securities. When the issue is fully subscribed, the underwriter's risk of being undersubscribed (being unable to sell its allotment of , the capital increase will raise 1.65-1.92 billion euros. The final issue price would be determined after the book-building period which runs from November 2-17. Erste said the proceeds would not be used to repay 1.2 billion euros in cash from a state bailout bailout The financial rescue of a faltering business or other organization. Government guarantees for loans made to Chrysler Corporation constituted a bailout. agreed earlier this year after the bank was hit by huge writedowns on its business in eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. . "We intend to use the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the offering to increase our core Tier-1 capital," the bank said. Leading Spanish savings bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. La Caixa "la Caixa" is the common name for the Caixa d'Estalvis i Pensions de Barcelona (Spanish: Caja de Ahorros y Pensiones de Barcelona), a pension and savings bank in Spain. said meanwhile it would increase its stake in Erste Bank from 5.1 percent to 9.9 percent by buying 36 percent of the new shares. On the Vienna stock exchange Vienna Stock Exchange (VSX) One of the world's oldest exchanges, which accounts for approximately 50% of Austrian stock transactions; the balance are traded OTC. , Erste Bank shares were among the biggest gainers on Friday, adding 2.76 percent to 28.26 euros thanks to the better-than-expected third quarter results, traders said. 
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