After years of plenty, there are leaner times ahead in central and eastern Europe. That’s the stark prospect facing bankers in the wake of the continuing sub-prime mortgage woes in the US and western Europe and the associated global credit crunch. But while the banking markets in central and eastern Europe have become more challenging, they still remain highly profitable.

That’s certainly the experience of Raiffeisen International, the central and eastern banking arm of Austria’s RZB Group, which is still managing to generate record profits in the region and which secures the banking group in central and eastern Europe award. With just under 50% of RZB’s global assets in central and eastern Europe, RZB is the international banking group with the biggest exposure to the region, a fact Herbert Stepic, chief executive of Raiffeisen International, is more than comfortable with. The bank reported its best-ever quarterly results in the first three months of 2008, with net profits soaring by 32.1% to €254.4 million. "This quarterly result corroborates our claim that the current environment in the global financial markets has only limited influence on our business model and growth perspective," says Stepic. "We have an excellent strategic alignment and we are again able to achieve significant organic growth and increasing profitability."