Absolute alignment with the goals set in the Bank’s Strategic Plan show the results of the first quarter of this year announced by Alpha Bank, with net profits of 211.1 million euros being at the highest level since the financial crisis, as a result of structural changes in which the Bank’s Management proceeded in previous years, as announced. The Bank’s strong results confirm Management’s goals for 2024, according to a briefing note.

B. Psaltis – we are pleased to confirm our estimates for 2024

“Looking ahead, we are pleased to confirm our estimates for 2024. The momentum underpinning Net Interest Income remains positive, if not slightly better than our initial forecasts, while prudent cost and balance sheet management ensures that core figures are formed according to our estimates”, stated the Group’s managing director, Vassilis Psaltis.

True to the goals it set in its Strategic Plan and the new guidance it gave in March, the Bank, as noted, achieved a RoTE of 13.5%, while increasing its efficiency with the Cost of Income Ratio falling to 38.4%, lower than the Administration’s target for 2024 (40%). At the same time, the Bank’s funds were strengthened with the CET1 Index reaching 14.6%, while according to the Management’s estimates it will be higher than 17.5% in 2026.

Share repurchase due to low stock valuation

With the aim of returning value to the Shareholders, the Bank’s Management decided to distribute 122 million euros, of which 50% will be allocated in the form of a dividend and the remaining 50% in the form of a buyback which is expected to have a return of more than 20% based on yesterday’s share price. At the same time, as mentioned in the first quarter results, the Bank received a provision of 24 basis points in order to distribute a dividend of 35% of the profits of 2024, a percentage which is expected to rise to 50% in 2025 and 2026. Based on these figures , the dividend distributions of the period 2024-2026 will correspond to approximately 30% of the current market value of the stock, while the surplus funds at the end of the period correspond to 40% of the current market value. The strong profitability recorded by the Bank led to a 30% increase in Earnings per Share (EPS) compared to the corresponding quarter of 2023, while according to Management’s estimates EPS will be around 0.32 euros in 2025 and will exceed 0.35 euros in 2026.

The Bank’s sustainable profitability lays the foundations for further value creation

The resilience demonstrated by the Bank’s Net Interest Income (NII), which stood at 420.2 million euros, up 9.6% year-on-year, combined with the strong 18% increase in Fee Income in on an annual basis, as a result of the Bank’s leading position in Wealth Management as well as commissions from loan disbursements, were the main sources of profitability.

In particular, the Bank’s Net Interest Income (NII) recorded a small drop of 4.2% on a quarterly basis, but was 10% higher compared to the corresponding quarter of 2023. The increase of 6 % of Serviced Loans as well as the repricing of the Bank’s bond portfolio, with reinvestments and new placements increasing its overall yield.

Regarding Fees and Charges, which reached 96.3 million euros, this performance was a result of the strong growth of Assets under Management (AUMs), mainly in mutual funds which recorded an increase of 29% on an annual basis , in turn leading to a 34% increase in mutual fund fees.

The resilience of the balance sheet is strengthened

The quality of the loan portfolio improved significantly, with the NPL Ratio remaining unchanged at 6%, despite the reclassification of €110m of government-guaranteed loans to the perimeter of NPL portfolios based on supervisory requirements, with the Cost of Credit Risk declining at 69 basis points. An improvement was also recorded in the Non-Performing Exposures Coverage Index which reached 46%, while the Overdue Coverage Index at the Group level stood at 85%. Of the Group’s MEAs of 2.2 billion euros, the largest percentage (43%) concerns housing loans, while a large part consists of regulated exposures with less than 90 days in arrears (38% of the total).

In the statements, Mr. Psaltis underlined, among other things: “We are very satisfied with the strong growth shown by our new healthy financing to the real economy, while there are also signs of recovery in lending to households, which allowed us to strengthen the portfolio as a whole us by 6% compared to the previous year.

Also, equally important is the unabated tendency of our clients to widen the dispersion of their assets by increasing their investments. Our clients’ preference for the investment products we offer boosted mutual fund inflows by 1.8 billion euros, thus increasing our assets under management to 17 billion euros and confirming our leading position in this sector in the Greek market . In addition, we are working even more intensively to implement our successful partnership with UniCredit in all its individual aspects.”

Mr. Psaltis referring to the Greek economy in general said: “At the macroeconomic level, the Greek economy is still distinguished as one of the fastest growing economies in the Eurozone. The latest economic data confirm that Greece maintains the strong growth momentum that prevailed in 2023, while high levels of foreign investment and an increase in the employment rate are expected to form the basis for another year of economic growth above the Eurozone average. Geopolitical uncertainties are undoubtedly intensifying, which could negatively impact energy prices and inflation. However, the fact that the Greek economy has turned the page and meets the conditions to develop in the midst of this uncertainty is equally indisputable, with the recovery of the investment grade as a springboard”

“We are determined to fully leverage the strategic achievements of recent years to further enhance the value we create for our shareholders. The positive performance of the first quarter confirms that we are on the right track to increase the distribution of dividends to our shareholders in the future, as a result of the improved profitability and growth dynamics of Alpha Bank”, said Vassilis Psaltis.