Polish bank Bank Zachodni WBK today reported a smaller-than-expected 7% earnings fall as its fund management arm suffered in the wake of the global retreat of equity markets.

The bank, which is 80% owned by AIB, posted first-quarter net profit of 243m zlotys ($109.7m) compared to an expected figure of 234m zlotys. The bank had earned 261m zlotys the same time last year.

However, the bank posted a 30% net interest income rise thanks in large part to rising interest rates and growing loan and deposit volumes.

Income from provisions fell 5% as the bank reported lower equity gains because of the weaker equity market. Higher employment costs also hurt its bottom line, Bank Zachodni WBK said in a statement.