Vienna - Bank Austria, part of the Italian UniCredit group, said Wednesday its profits fell by 1.2 per cent to 1.74 billion euros (2.21 billion dollars) in the first three quarters of 2008, due to growth in Central and Eastern Europe and relaxed accounting rules.

Net profit in Central and Eastern Europe increased by 47 per cent to 1.23 billion euros in the first nine months, compared with the same period last year, partly as a result of the acquisition of ATF Bank in Kazakhstan and Ukrsotsbank in the Ukraine in 2007.

The financial market crisis had a negative impact on the trading results of Austria's largest bank, which accrued trading losses of 278 million euros until the end of September, compared with a positive result of 180 million euros in the first three quarters last year.

As the European Union has recently relaxed accounting rules because of the financial crisis, Bank Austria's balance sheet does not show 93 million euros of trading losses.

Operating income fell 2.9 per cent to 2.16 billion euros, affected by negative trading results as well as by he acquisition of ATF Bank and Ukrsotsbank.

Central and Eastern Europe accounted for 62 per cent of Bank Austria's net interest income of 3.62 billion euros in the first three quarters, compared with 53 per cent last year.

Although the bank said in October it had to revise its previous profit goal of 3 million euros for 2008, it did not provide new figures on Wednesday.

"Concerted action at the global, European and national levels will contribute to easing the financial market situation perceptibly, but it is still too early to give the all-clear signal. The market environment will remain difficult, " chief executive Erich Hampel said. (dpa)