The relevant accounting entries of the balance sheet were approved by the General Meeting of Alpha Bank shareholders in order to proceed with a future dividend distribution, in accordance with the strategic plan. According to the plan, a dividend distribution of 20-30% of the 2023 profits (paid in 2024) is planned.
This decision offsets accumulated losses from capital reserves and is based on the development and healthy financial course of the Alpha Bank Group. In the meantime, a share capital reduction in kind was approved, without changing the number of shares. This is for the corresponding return of capital (€0.01 per share) to Alpha Bank’s shareholders derived from the returns on the mezzanine securitization of red loans.
The managing director of Alpha Bank, Mr. Vassilis Psaltis, speaking in the context of the General Assembly, referred to important business, development and structural milestones, such as the capital increase of 800 million euros in the summer of 2021, the reduction of non-performing loans to a single-digit rate of six months ahead of target, through total securitizations of more than €17 billion, the raising of capital through bond issues of €1.5 billion, the restructuring of international operations, the deal with Nexi in payment systems, the partnership with DK and the creation of the new CEPAL for the management of bad loans, the creation of a joint venture with Dimand for the creation of a real estate investment platform (Skyline), etc.
All this, according to Mr. Psaltis, led to adjusted profits of 330 million euros in 2021, marking a return on equity of 5%, i.e. within the objectives of the business plan.
The significant credit expansion in 2021 of 5.4 billion euros, which corresponds to a net credit expansion of 1 billion euros, contributed to the achievement of these figures. According to Mr. Psaltis, Alpha Bank’s financing of the economy will double in 2022 compared to 2021. 90% of the increase will come from business banking.
Referring to the economy, Mr. Psaltis warned that the conditions of inflation and rising interest rates create new data, affecting the liquidity of businesses and households. Inflation climbed to the highest levels in 40 years, prompting the ECB to raise interest rates. Mr. Psaltis said that it is mainly cost inflation, which raises concerns about the effectiveness of monetary policy in combating it.
Inflation and supply chain problems in a rising interest rate environment have more negative effects on countries with lower credit ratings. Greece is one of these countries, as it does not have an investment grade. On the other hand, however, the Greek economy has the advantage of two important pillars of development which are tourism and the Recovery Fund.
Vasilis Rapanos
The challenges and opportunities of the Greek economy were mentioned by the president of Alpha Bank, Mr. Vassilis Rapanos, who, speaking at the General Assembly, noted that inflation and the rise in interest rates create tight conditions for businesses and households. At the same time, he noted that the increase in nominal GDP improves the ratio of public debt to GDP, but this, as he characteristically said, does not ensure its sustainability in external crises.
For this reason, as Mr. Rapanos said, a prudent fiscal policy is required and support measures should be targeted only at those who need them.
The Greek economy is supported by tourism, fiscal support measures and the utilization of the resources of the Recovery Fund. According to the Commission, the growth rate in 2022 is estimated at 4% and in 2023 at 2.4%. Inflation in 2022 is estimated at 8.9% and 3.5% in 2023.
Under these circumstances, Mr. Rapanos stated that the role of the financial system is changing and must support sustainable development and digitization, as Alpha Bank does with special targeting and consistency. Mr. Psaltis had previously mentioned and added Alpha Bank’s commitment to the social footprint, the environment through corporate governance and ESG criteria.
Source: Capital
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