(Adds detail, CEO comment)
VIENNA, Aug 4 (Reuters) - Austrian lender Erste Group Bank's net profit came in slightly above market estimates in the second quarter, helped by fewer bad loans and higher income from fees and commissions than a year earlier.
Net profit fell to 362.5 million euros ($430.8 million) in the three months to the end of June from 567.0 million euros a year earlier, when the sale of its stake in Visa Europe flattered the bottom line, Erste said on Friday.
That was higher than analysts' average estimate of 349 million euros in a Reuters poll.
Its stock opened little changed.
"Net interest income, our principal source of income, declined mainly due to lower interest income from government bonds and consumer loans as well as lower unwinding contributions," Chief Executive Andreas Treichl said.
"We were able to increase fee and commission income, though, on the back of improved securities business and asset management," he added.
Net interest income, the difference between interest earned and paid out, dipped to 1.09 billion euros from 1.10 billion a year earlier. Net fee and commission income grew to 453.2 million euros from 441.8 million.
One of the biggest improvements was in its non-performing loan ratio, which fell to 4.7 percent at the end of the second quarter from 5.8 percent a year earlier, helped by better economic conditions in the countries Erste operates in across central and Eastern Europe.
The bank said it "excellently positioned" to meet its full-year targets of a return on tangible equity (ROTE) of more than 10 percent and a dividend higher than last year's 1 euro per share. ROTE for the first half of the year was 11.2 percent. ($1 = 0.8415 euros) (Reporting by Francois Murphy; Editing by Michael Shields)