Alpha Bank posted a profit after taxes of 117.3 million euros in the second quarter, while at the same time the group’s Non-Performing Exposures ratio decreased to 8.2%.
In more detail, Alpha Bank’s figures in the second quarter:
– Net Interest Income increased by 6.9% on a quarterly basis and amounted to €302.7 million, benefiting from the increase in loans and securities income.
– Net fee income amounted to €100.7 million, down 6.7% on a quarterly basis, as the enhanced performance in the first quarter was due to income arising from the Bank’s participation in project financing.
– Recurring Operating Expenses amounted to €244.7 million, unchanged on a quarterly basis, while total Operating Expenses increased by 5.4% due to extraordinary expenses (“Excluded Funds”). Additional cost savings have already been secured for the quarter from transactions amounting to €18 million, which are expected to be accounted for upon completion.
– The Main Result before Forecasts amounted to €173.1 million, up 5.6% compared to the previous quarter, as a result of the strong recovery in Net Interest Income.
– The Cost of Credit Risk was set at 94 basis points, taking into account impairment losses of €75 million as well as arrears management costs of €14 million, while, for the six-month period, it stood at 75 basis points, in line with the target was set for the year. In addition, the impact of transaction-related impairments amounted to €189m, in line with estimates for 2022. Net MEA flows were flat in Q2
– Profits after Taxes amounted to €117.3 million. Adjusted Net Profits after Taxes amounted to €73 million excluding: a) non-recurring operating expenses of €6 million, b) impairment losses of € 3 million, c) the impact of MEA transactions €214 million, d) revenues from discontinued operations and other transactions €217 million and e) taxes related to the above, amounting to €49 million.
Main developments
– The consolidation of the Bank’s loan portfolio through transactions amounting to €1.6 billion, contributed to the achievement of a single-digit Non-Performing Exposures (NPE) ratio of 8.2%. A significant improvement was achieved in the quality of the balance sheet, as MEAs at Group level decreased by 89% from the end of 2017 and amounted to €3.2 billion.
– The start of cooperation with Nexi in the Greek payment market expands the Bank’s business development actions, which allows it to capitalize on the positive prospects in a widely developing ecosystem, strengthening the dynamics of the Alpha Bank Network.
– The dynamic expansion of the domestic portfolio of Serviced Loans with a net credit expansion of €0.7 billion to Businesses, restores the Bank to a leading position in the financing of Greek Businesses. At Group level, Serviced Openings increased by 3% on a quarterly basis.
– Net Interest Income performance benefits from an increase in loan originations and debt securities income, as the impact of balance sheet consolidation is reduced. The upward trend is expected to continue, as a result of rising interest rates.
– Enhanced performance in Fee Income driven by increased Credit Card fees and payments, combined with growth in loan originations, as well as the resilient performance of portfolio management operations.
– The Common Equity Tier 1 Capital Ratio, with full implementation of Basel III (FL CET1), stood at 11.7%, taking into account the positive impact on Risk Weighted Assets (RWAs) from transactions, according to business planning.
B. Psaltis: In an ideal position to continue our development course
Commenting on the bank’s performance, Alpha Bank CEO Vassilis Psaltis said:
“Exactly one year after the presentation of our Strategic Plan “Project Tomorrow”, Alpha Bank has demonstrated excellent efficiency, achieving all relevant objectives. In the first half of the year, the Bank’s strong performance continued, with an increase in volumes and a parallel reduction in risk in key indicators, substantially improving profitability, regulatory capital, revenue quality and, ultimately, growth prospects for the year 2022 .
As a result of consecutive successful trades, the Non-Performing Exposures Ratio (NPE) decreased to 8.2%, fully confirming our estimates. It is the first time, after almost a decade, that the Group’s MEA Index is in the single-digit percentage, an overwhelming difference compared to the beginning of 2019, when the corresponding index stood at 48.9%. The smooth implementation of this restructuring plan is a confirmation of our team’s ability and determination to deliver on complex goals, even under the most challenging conditions, as the majority of the ACE reduction plan was implemented during the pandemic.
Our banking activity continues to develop dynamically, through and from the increased credit expansion to Businesses, which allows Alpha Bank to regain the first position in the financing of entrepreneurship in Greece. In the first half of the year, our Bank supported the Greek economy with new loan disbursements of €4 billion, recording a credit expansion of €1.7 billion.
At the same time, the creation of the new Alpha Bank continued apace in the first half of 2022, as new strategic alliances of high added value capitalize on the dynamics of our Network and Partners. In July, we launched our partnership with Nexi, the leading payment technology group, with the aim of transforming payment services and providing innovative solutions to merchants, marking a new era of digital payments in our country. Also, we recently proceeded to identify a preferred investor for Project Skyline, which concerns the transfer of properties worth around €500 million, the utilization and management of which will be undertaken by our Group’s Real Estate subsidiary.
At the same time, structural changes to our cost base continue, having already secured cost savings of €132 million. The commitment to the implementation of our plan has resulted in an increase in the rate of Return on Tangible Equity in the first half, and Profit After Taxes €243m, fully in line with our annual profitability targets.
The macroeconomic environment remains volatile, due to the combination of the fallout from the war in Ukraine, rising energy costs, high inflation and the lingering effects of the pandemic. Nevertheless, Greece is recording a strong recovery in tourism this summer, with strong employment prospects and positive estimates for a growth rate above the EU average. Alpha Bank now plays a leading role in supporting Greek households and businesses and contributes to attracting international investment to Greece, which fills us with optimism that we are ideally positioned to continue our growth path in this challenging environment.”
Source: Capital
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