(by M.Riley)

German bank HVB second quarter pre-tax profit rose, as loan provisions fell and net interest income rose 0.7 percent from a year ago, or 13.1% from the first quarter, to 1.45 billion euros.

Pre-tax profits of €336m, up from €53m a year ago, beat consensus expectations for about €300m, but net profits of €155m, compared with a loss of €67m last year, were shy of a €161m consensus.

The result was boosted, as predicted, by €120m of investment gains. But investors will take heart at a recovery in net interest income to €1.45bn, almost back to year-ago levels, and sharply up from the disappointing €1.29bn of the first quarter. Trading income of €182m, compared with €246m a year earlier, was also better than expected.

Subsidiary Bank Austria beat expectations by a good 10 per cent with a €150m net profit, up from €101m last time. Growth was driven by further expansion in eastern Europe and cost cutting.