Main Highlights
- Strong capital position with CET1 ratio increased by 80bps q-o-q to 17.8% as of June 2019, mainly affected by the improving valuation of the Greek Government Bonds portfolio. Total CAD at 17.8%, provides a buffer of Euro 1.9 billion over our SREP ratio requirements. In Q2 2019, our Tangible Equity Book Value increased to Euro 7.9
billion from Euro 7.7 billion in the previous quarter.
- Liquidity profile continued to improve with deposits in Greece up by 5.6% y-o-y to Euro 33.3 billion at the end of June 2019. Loan to Deposit ratio for the Group reduced further to 102% in Q2 2019 vs.111% a year ago.
- Alpha Bank continued to extend credit to the private sector with new loan disbursements in Greece of Euro 1.5 billion in H1 2019. New financing is expected to pick up pace in the second half of 2019.
- Net Interest Income effectively flat q-o-q at Euro 388.6 million. Net Interest Margin stable q-o-q at 2.5%.
- Fees and Commission income stood at Euro 81.2 million, up by Euro 10.9 million q-o-q, mainly on the back of higher volume of credit card transactions and new loan disbursements.
- Income from financial operations in Q2 2019 stood at Euro 123.7 million, primarily attributable to gains’ realisation from our Greek Government Bonds position. Total income from financial operations for H1 2019 at Euro 197.5 million.
- Recurring Operating expenses decreased by 2.5% y-o-y, mainly as a result of lower General Expenses as well as a decrease in Staff Costs.
- In Q2 2019, Pre-Provision Income stood at Euro 322.7 million, up by 18.9% q-o-q, due to higher trading gains.
- Impairment losses on loans at Euro 246 million in Q2 2019, effectively flat q-o-q (+1.4%), implying a Cost of Risk (CoR) of 1.9% over gross loans, same as in the previous quarter vs. an average cost of risk of 3.2% for 2018.
- In H1 2019, Profit After Tax stood at Euro 86.8 million vs. Euro 12.7 million in H1 2018.
- NPE contraction accelerated in Q2, with the NPE stock in Greece down by Euro 0.4 billion on the back of lower re-defaults, as the implementation of our Retail Transformation Plan starts to produce tangible results, as well as successful corporate restructurings. The NPE ratio in Greece at the end of June 2019 stood at 48.3%, with NPE coverage at 45.3%.
- The Bank is consistently working towards meeting its NPE decrease target for this year of Euro 5.5 billion, with an improved pace of organic reduction and the completion of the two NPE portfolios transactions, totalling circa Euro 3.7 billion.
Alpha Bank’s CEO, Vassilios Psaltis stated:
“We are witnessing a significant improvement in the economic outlook, evidenced by the sharp decline in Greek government bond yields and the improvement in the Economic Sentiment Indicator that has reached pre-crisis levels. On that backdrop, the full abolition of capital controls on September 1st, should allow for a further step towards full restoration of normality. Alpha Bank increased its profitability and capital levels in the second quarter whilst it continued to move ahead with the implementation of its NPE reduction plan, launching two sizeable NPE transactions. These tailwinds are shaping our confidence towards an ambitious strategy that we envisage finalizing with our Board and communicating to the market in the fourth quarter”.
