Vienna - Austria's Erste Bank on Wednesday reported that its net profits increased by 4.5 per cent to 315.6 million euros (491.9 million dollars), driven by the strong performance of its Central and Eastern European subsidiaries.

Earnings before interest and taxes (EBIT) for central Europe's second-biggest lender were up 25.1 per cent to 766.2 million euros in the first quarter, despite a difficult market environment.

Central and Eastern Europe remained main growth drivers, Erste Bank said in a statement.

"Operations in Romania and the Czech Republic developed particularly positively, with their operating result contribution to the group increasing by 87 per cent and 49 per cent respectively."

Net interest income was up 27.5 per cent to 1.15 billion euros

Negative effects from the subprime crisis affected profits, the bank said. Market-to-market valuation had a negative effect on pretax profits of 32.8 million euros. Booked against equity, market-to- market valuations resulted in a decline of 75 million euros.

The bank expected no impairment to be necessary, due to the quality of underlying assets.

CEO Andreas Treichl said his earlier prognosis of a 20-per-cent increase in net profit for the 2008 business year remained unchanged. For 2009, Treichl expected an increase of 25 per cent. (dpa)