Volksbank derived 5.9 million-euro net profit in the first half, almost three times higher than in the corresponding period of last year.

The data is calculated under the international financial reporting standards (IFRS) but has yet to be audited. According to the Romanian accounting standards, net profit in the first half was of 4.1 million euros.

"We expect to exceed 10 million euros in net profit, higher than the 8.5 million euros budgeted," says Gerald Schreiner, the bank's chairman.

Volksbank's assets rose to 704.5 million euros in midyear, an increase of 89% on June last year. The credit portfolio of the bank went up by 112% during this interval, to almost 485.5 million euros. The credit volume continued to increase during the summer months, too, which traditionally are slower for business, to 540 million euros in mid August, Schreiner says.

"We'll add another 200-240 million euros by the end of the year, so that the credit volume will exceed 740 million euros, from the 308 million euros at the end of last year," the bank's chairman estimates.

Volksbank started an aggressive territorial expansion programme at the end of last year, in order to boost its market share on the retail segment, on which it has chosen to focus.

In order to sustain growth, Volksbank will operate an increase of its equity capitals by 80 million euros, 50 million euros in the form of a share capital increase and the rest through a subordinated loan. The bank will therefore have a total of 233 million euros in equity capitals. The capital increase will be done by a contribution in RON, so that the majority shareholder VolksBank Austria will transfer the risk to its own balance sheet.

At the end of June, Volksbank had 52 branches of its own, expanding from the 18 it owned in mid 2005. There were also a further 19 branches operated by franchisee