BUCHAREST, Aug 3 (Reuters) - Romania's No. 2 bank, BRD BRDX.BX, posted a 17.4 percent fall in its first-half net profit on Monday, reflecting surging loan-loss provisions and slower lending activity. BRD, controlled by France's Societe Generale (SOGN.PA), reported a net profit of 425 million lei ($143 million) in the first half of this year, slightly above a forecast of 390 million lei in a Reuters poll.
Risk costs or loan-loss provisions stood at 408 million lei in the first six months, rising 171 percent on the year.
"The first half of 2009 saw a significant slowdown in lending demand and heightened risk growth," the bank's chief executive, Patrick Gelin, said in a statement.
Eastern European banks have been hit by a slowdown in lending and rising provisions for non-performing loans, as currencies' weakness and growing unemployment have hit clients.
While financing conditions have deteriorated because of the global credit squeeze, banks have raised rates on deposits to attract more funds, compromising a good chunk of their earnings.
BRD shares closed at 10.1 lei on Friday, down almost 3 percent from Thursday's close, after briefly touching their highest level since October during the session. ($1=2.982 Lei) (Reporting by Marius Zaharia; Editing by Simon Jessop)