* Q2 profit at 58.5 mln eur vs expectations of 95.3 mln
* Q2 risk costs at 613.7 mln eur or 148 basis points
* Risk costs for the full year seen at 65-80 basis points
* Q2 fully loaded CET 1 ratio at 14.2% (Adds detail, background)
VIENNA, July 31 (Reuters) - Lender Erste Group on Friday reported an 84% drop in second-quarter profit as it felt the effects of the coronavirus restrictions but said it hoped to have now made provisions for the bulk of the expected negative effects this year.
Net profit reached 58.5 million euros ($69.6 million) in the April-June period, missing the forecast for 95.3 million euros in a poll of 16 analysts.
The bank, which operates in six central and eastern European countries besides its Austrian home market, said risk provisions for the full year are expected to amount to 65 to 80 basis points of average gross customer loans. They were at 148 basis points, or 613.7 million euros, in the second quarter.
The retail-focused bank, which saw its lending business decline 27% in the quarter, now sees a wave-shaped economic recovery from the pandemic as the most likely scenario.
It said demand for consumer loans has started to recover, "even with tighter lending standards to adjust to COVID-19 world".
Erste Group said it expected net interest income to slightly decline in the full year after it was flat in the quarter at 1.17 billion euros.
Its fully loaded CET1 ratio, a measure of capital strength, was at 14.2% in the quarter and the lender is still targeting 13.5% in the medium-term.
Erste Group still plans to pay out dividends for 2019 and 2020 once a recommendation on dividend payments imposed by the supervisory authority is lifted effective 1 January 2021. ($1 = 0.8410 euros) (Reporting by Kirsti Knolle Editing by Michelle Martin)