EBRD fears loss from eastern Europe market turmoil

LONDON (Reuters) - The European Bank for Reconstruction and Development (EBRD) may suffer its first annual loss in a decade due to financial market turmoil hitting central and eastern Europe, the Financial Times reported.

The EBRD is owned by around 60 mostly Western governments and funds investment in Europe and central Asia's ex-communist countries, where stock markets and currencies have plunged in recent weeks as investors switch to safer or more liquid assets.

Russia's benchmark RTS index fell by more than 13 percent on Friday alone.

"The EBRD will be hit," its president, Thomas Mirow, told Saturday's edition of the FT. "I would not rule out a loss for the year but in any case we will be affected."

The FT reported that Mirow said the EBRD's borrowers were still repaying their loans on time, but that its equity stakes in companies had suffered.

Mirow said the bank would not curtail its plans to invest up to 5.95 billion euros (4.75 billion pounds) next year, more than this year's upper limit of 5.8 billion euros.

The EBRD was giving extra support to some of the banks in which it had invested, while other firms which would normally have found funds from the private sector were now turning to the bank, Mirow added.

The EBRD last reported a loss in 1998, during the Russian financial crisis of that year.

(Reporting by David Milliken, editing by Anthony Barker)