Alpha Bank reported a net profit after tax of €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.
KEY FINANCIAL RESULTS
Resilient performance in Net Interest Income, which despite the pressures amounted to €409.2 million, down 2.5% on a quarterly basis, 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 Income was €100.1 million, up 3.5% on a quarterly basis, driven by an increase in assets under management AUMs and stronger trading activity, performing better than originally estimated. Net fee and commission income for the first half of the year increased by 13.7%.
Recurring Operating Expenses were €213.3 million, up 6.4% quarter-on-quarter, driven by 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 and excluding management fees and costs associated with synthetic securitization transactions, was 31 bps, reflecting the consolidation of the M&A portfolio. In the first half of the year, the Credit Risk Cost was 64 bps.
Adjusted Net Profit after Taxes, 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 the M&A transactions of €102 million and c) Other Adjustments and Taxes related to the above of €2 million.
CEO STATEMENT
"Two important milestones set the tone for Alpha Bank's developments in Q2 2024. 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 the validation of our full return to normality, proving 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, a profit that represents a return of 13.6% on tangible equity and earnings of €0.18 per share for our shareholders. We also recorded notable progress in the formulation of a strong loan programme, 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 finalised the framework for the distribution of UniCredit one-market funds, which are already offered to our clients. Our partnership with UniCredit represents an opportunity to lead 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 euro area this year.
In H1 2024, we also made 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.", Vasslis Psaltis stated.
