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VIENNA, July 14 (Reuters) - Austrian banks have accelerated their consolidation efforts, increasing their profits and reducing their risk costs, but must do more to improve their operating profits and further bolster their capital reserves, the country's central bank has said.
"Despite improved profitability, there is no room for complacency, however, as very low risk costs still need to prove their sustainability and operating profitability remains under pressure," the Austrian National Bank (ONB) said in its half-yearly Financial Stability Report published on Friday.
"Despite strong improvements in the year 2016, further capital strengthening remains crucial for the Austrian banking system given the still elevated volume of nonperforming loans (especially in CESEE) and in order to ensure resilience against global downside risks," it said, referring to central, eastern and southeastern Europe, where several Austrian banks operate. (Reporting by Francois Murphy; Editing by Shadia Nasralla)