Vienna - Raiffeisen Bank reported a record net profit of 982 million euros (1.24 billion dollars) for 2008 on Thursday, although the Austrian bank operating in Central and Eastern Europe (CEE) experienced a difficult fourth quarter.

Since last May, Raiffeisen International Bank-Holding AG's stocks have lost 88 per cent of their value, as investors, seeking to reduce risk, unloaded shares of banks exposed in the CEE region.

The bank said it had reduced the number of foreign-currency loans, stopped expanding its branches and reduced staff numbers in Hungary and Ukraine.

The 17-per-cent rise in net profit was boosted by net interest income growing by nearly 34 per cent to 3.2 billion euros, according to the preliminary results.

Customer deposits reached 44.2 billion euros by the end of 2008, but Raiffeisen International Chief Executive Herbert Stepic said his group had experienced "a partially significant drain of customer deposits" owing to the financial crisis last September.

Provisions for impairment losses were raised to 780 million euros, more than double the amount for 2007.

Raiffeisen stocks rose by more than 6 per cent to 14.05 euros on the news, after a report by the rating agency Moody's on Monday had sent Eastern European banking stocks tumbling this week.

Moody's warned that currency depreciations in the CEE region were creating risks for banks in Europe's new market economies. (dpa)