Alpha Bank reports 1Q 2019 Profit After Tax1 at Euro 27.5 million

Main Highlights

- Asset Quality continued to improve with NPE balances for the Group reduced by Euro 0.3 billion in Q1 2019. NPL transactions of circa Euro 4 billion to materialise towards the end of the year, as planned.- Liquidity profile continued to improve with deposits in Greece up by 9.1% y-o-y to Euro 33 billion at the end of March 2019. Loan to Deposit ratio for the Group reduced further to 103% in Q1 2019 vs. 116% a year ago.- Eurosystem funding was significantly reduced, down by Euro 4.8 billion y-o-y with ELA reliance fully eliminated since February 2019. In Q1 2019, the Bank continued to increase its repo transactions at improved pricing terms, reaching Euro 6.7 billion at the end of March 2019 vs. Euro 2.7 billion a year ago.- Alpha Bank continued to extend credit to the private sector with new loan disbursements in Greece of Euro 0.6 billion in Q1 2019.- Core Pre-Provision Income at Euro 212.5 million, down by 12.6% q-o-q, primarily affected by the lower Net Interest and Fee Income contribution. Net Interest Margin at 2.5% in Q1 2019, down by 30bps q-o-q, mainly due to lower loan spreads in the corporate sector.- Recurring Operating expenses decreased by 3.5% y-o-y, mainly driven by lower General Expenses. Cost containment initiatives set to further improve our operational efficiencies in 2019.- Income from financial operations in Q1 2019 stood at Euro 73.8 million, primarily attributable to the realisation of gains from our Greek Government Bonds portfolio.- Impairment losses on loans significantly reduced to Euro 178.3 million in Q1 2019, implying a Cost of Risk (CoR) of 1.4% over gross loans in the quarter compared to an average of 3% in 2018.- Profit After Tax at Euro 27.5 million, down from Euro 65.4 million in Q1 2018.- Strong capital position with Fully Loaded Basel III CET 1 ratio stable q-o-q at 14%. Transitional CET1 ratio at 17%, affected by the anticipated phasing-in of IFRS 9 and Basel III amortisation as well as the impact of IFRS 16 first time adoption (FTA). Tangible Equity Book Value stable at Euro 7.7 billion.- In May 2019, our subsidiary in Romania successfully completed a Euro 200 million covered bond issuance, the first ever covered bond issue from a Romanian Bank, enhancing the liquidity position of our subsidiary and contributing to its business goal of funding diversification.

Alpha Bank’s CEO, Vassilios Psaltis stated:

“Alpha Bank delivered a profitable performance in the first quarter of 2019 despite the challenging dynamics in our loan book given the ongoing deleveraging of our NPE portfolio. Attention to cost discipline and a de-escalation in impairment charges helped to offset lower revenues during the quarter. Our focus during the year to date, has been on delivering key Balance Sheet milestones: exiting the ELA, continuing to grow the deposit base, issuing the first ever covered bond in the Romanian market and actively managing our Greek sovereign bonds position within our risk appetite. In addition, we have successfully concluded the first phase of our strategy formulation process by delivering to the Board of Directors a full baselining of our activities in Greece and in SEE, including a deep dive on organizational effectiveness, taking feedback from our Employees who are an integral part of the transformation process”. 

FULL REPORT