Risk costs at emerging Europe's number two lender by assets fell 13.4 percent as the region's economy picked up in a patchy way but still were a bit higher than the market had expected.
Erste said on Thursday it was confident it would significantly raise profitability this year even though its markets in Romania and Hungary were not expected to show meaningful improvements before the second half of 2011.
It said risk costs would remain elevated in Romania and Hungary this year but fall by 10 to 20 percent elsewhere.
"While Romania and Hungary continued to work through economic issues the performance in the Czech Republic, Slovakia and Austria makes us confident about our ability to significantly raise profitability again this year," Chief Executive Andreas Treichl said.
Despite a "temporarily weaker operating result", the group remained placed to repay state capital it got during the financial crisis without having to raise equity, he added, expecting "significant earnings growth in 2011".