UPDATE 1-Erste Q3 in line on Czech rebound, strong Romania

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VIENNA, Oct 30 (Reuters) - Austria's Erste Bank <ERST.VI>, central Europe's second-biggest lender, posted a 34 percent rise in third-quarter net profit as its Czech unit recovered and its Romanian bank beat estimates.

Net profit after minorities in the quarter to September rose to 272 million euro ($392 million), Erste said in a statement on Tuesday -- broadly in line with forecasts in a Reuters poll of 15 analysts which averaged 278 million euros.

Erste's growth hope Banca Comerciala Romana expanded profits faster than analysts expected. Earnings at Czech arm Ceska Sporitelna, its biggest unit in the former Communist bloc, rose 21 percent, regaining momentum after some quarters in the doldrums.

"We are particularly pleased with the quarterly contributions from Hungary, Croatia and especially the Czech Republic," said Chief Executive Andreas Treichl in a statement. "The results seen at BCR prove that we are on the right track."

After the first nine months of the year, net profit was up 26 percent, bringing Erste on track to make good on its promise to raise net profit by at least 25 percent this year.

Interest income, Erste's main revenue source, rose 27 percent, in line with estimates. Loan-loss provisions dropped compared with the previous year and were much lower than forecast by analysts. Fee income expanded by 39 percent and came in slightly higher than expected.

General administrative cost growth, investors' main concern about Erste after the first two quarters, remained at 30 percent, as restructuring costs at BCR and strong wage growth in central Europe left their mark.

Tweaking its previous mid-term outlook, Erste said it saw net profit rising by at least 20 percent next year and by at least 25 percent in 2009. It kept its 2009 goal of a 55 percent cost-income ratio and 18 to 20 percent return on equity.

Erste closed at 56.90 euros on Monday, down 3 percent this year and valuing the stock at about 13 times next year's estimated earnings -- less then central European peers reflecting investor scepticism about its Romanian growth hopes. ((Reporting by Boris Groendahl, editing by Quentin Bryar; Vienna Newsroom, phone +43 1 531 12-258))

($1=.6939 Euro)

Keywords: ERSTEBANK RESULTS/