Erste Bank - the 3rd biggest lender in CEE and the biggest bank in Romania reported that net profit fior the second quarter fell to EUR260 million from EUR321 million a year earlier. This was well above the EUR164 million average estimate of five analysts polled by Dow Jones Newswires.

Clearly, the fears of CEE banks has been overdone and Erste Bank is confident of profits in 2009, despite a rise in bad debts, and expects to pay a dividend.