Alpha Bank: Net profit of €322.5 million in H1 2024, up 6.6%

Two major milestones set the tone for Alpha Bank’s developments in Q2 2024, said the Bank’s CEO, Mr. Vasilios Psaltsis, during the presentation of the results. According to Mr. Psaltis.

“In June, we received regulatory approval for the first dividend distribution to our shareholders since 2007. In addition, Alpha Bank regained its investment grade rating from Moody’s after 14 years. Both of these developments represent a validation of our full return to normality, demonstrating that the international investment community recognises our tireless efforts to transform the Bank and address the consequences of the financial crisis.

We can now look forward to a future of higher recurring profitability, enhanced capital reserves and increased shareholder reward.

We are proud to have achieved recurring earnings of €437 million in the first half of the year, representing a return on tangible equity of 13.6% and earnings of €0.18 per share for our Shareholders. We also recorded notable progress in the formulation of a strong loan program, which will be disbursed within the next few quarters, and in supporting our clients in better investment management of their assets, thus confirming our leadership position in Greece. In addition, we accelerated the deleveraging of non-performing loans, resulting in a ratio of 4.7%.

Our strategic partnership with UniCredit is progressing rapidly, as we completed the agreement for our joint presence in Romania and finalized the framework for the distribution of UniCredit onemarkets funds, which are already offered to our Clients.

Our partnership with UniCredit represents an opportunity to lead the developments in the Greek market, introducing innovative products as part of an extensive pan-European network. The Greek economy continues to strengthen. With inflation easing and investment flows remaining strong, Greece is well positioned to weather geopolitical uncertainties and record one of the highest economic growth rates in the eurozone this year.

In H1 2024, we were also able to make rapid progress in the implementation of our strategy, achieving a number of targets ahead of schedule. As a result, we are pleased to upgrade our full-year revenue and recurring profitability guidance for our Group.”

The detailed results presentation is as follows:

- – In the first half of 2024, the Return on Tangible Equity based on Adjusted Earnings after Taxes was 13.6%2 , Adjusted Earnings per share amounted to €0.182, while the FL CET1 ratio increased by 50 bps on a quarterly basis taking into account the provision for dividend distribution.
- – Net profit after tax amounted to €322.5 million in H1 2024, up 6.6% compared to H1 2023, as a result of higher revenues as well as improved costs and provisions, which fully absorbed the impact of the accelerated resolution of the MEA portfolio.
- – The Group’s Serviced Loan Portfolio increased by 4.5% year-on-year to €29.8 billion. In H1 2024, new loan disbursements increased by 7% compared to H1 2023, as a result of 55% growth from households and 4% from corporates.
- – Customer funds strengthened by 8.1% year-on-year, as a result of an increase in Assets Under Management (AUMs), while deposits remained almost unchanged year-on-year. Time deposits as a percentage of the Bank’s domestic deposits remained unchanged on a quarterly basis at 25% (excluding deposits of government entities), with deposit rates as a percentage of market rate (beta) growth at 17%.
- – The Group’s NPL ratio declined to 4.7%, due to the forward implementation of the MEA resolution plan. The cost of credit risk was set at 64 bp for the first half of 2024.
- – The FL CET1 ratio strengthened by 50 bps in H1 2024, as a result of a positive contribution of 126 bps from organic profitability in the period, a negative impact of 39 bps from transactions and 36 bps from the provision for dividend distribution of approximately 35% of net profit. Taking into account the positive impact on Risk Weighted Assets (RWAs), the FL CET1 ratio, stood at 16.6%3 and the Total Capital Adequacy Ratio stood at 21.3%3 .
- – The Bank’s Tangible Net Asset Value amounted to €6.7 billion in Q2, up 11% year-on-year or 8% after dividends.
- – The performance of Net Interest Income was positive, which despite pressures amounted to €409.2 million, down 2.5% quarter-on-quarter, a better than initially expected performance as a result of lower loan contributions and higher funding costs. In the first half, Net Interest Income increased by 6.4% year-on-year.
- – Net Fee and Commission Income amounted to €100.1 million, up 3.5% quarter-on-quarter, driven by an increase in assets under management AUMs and stronger trading activity, performing better than the initial estimate. In the first half of the year the
- – Net fee and commission income increased 13.7%.
- – Recurring Operating Expenses were €213.3 million, up 6.4% quarter-on-quarter, due to higher staff remuneration, increased third-party fees, higher promotion and advertising costs and investments in IT infrastructure. On a year-over-year basis, Recurring Operating Expenses decreased by 0.5% in H1, as a result of lower contributions to the Single Resolution Fund (SRF).
- – In Q2, Core Earnings Before Provisions amounted to €313.2 million, down 2.6% quarter-on-quarter, while in H1 2024 it improved by 13.8% year-on-year, as a result of the increase in Net Interest Income.
- – In Q2 2024, Credit Risk Cost, excluding M&A transactions, was 57 bps, while excluding management fees and fees related to synthetic securitization transactions, it was 31 bps, reflecting the consolidation of the M&A portfolio. In the first half of the year, Credit Risk Cost was 64 bps.
- – Adjusted Net Profit after Tax, which amounted to €214 million in Q2 2024, is defined as Net Profit after Income Tax of €110 million excluding: a) non-recurring Operating Expenses of €1 million, b) the impact of transactions
- – M&A of €102 million; and c) Other Adjustments and Taxes related to the above of €2 million