Alpha Bank Group's results for the first nine months of 2024 show strengthened dynamics in both profitability and capital adequacy, with adjusted profit after taxes amounting to €665.8 million, up 16% compared to the corresponding period of 2023 despite the impact of lower interest rates.

As a result of the group's strong profitability, the return on tangible equity (RoTE) ratio stood at 14.4% in the nine months, while the bank's improved operating performance led to a further upgrade of the profitability target for 2024 to around 14% (from >13.5% in August). In addition, management announced that it aims to accelerate the amortization of DTCs, targeting zero amortization in 2033. 

The bank's capital ratios also strengthened significantly, with the FL CET1 ratio up 120 bps year-to-date to 15.5% and the capital adequacy ratio up 227 bps. to 20.9%. At the same time, the bank's balance sheet continued to consolidate, with the NPL ratio (NPLs) declining by 10 basis points from the previous quarter to finally stand at 4.6% in the third quarter, thanks to stronger activity in regular loan servicing (curings). The reduction in the bank's risk profile resulted in a cost of credit risk of 58 bps in Q3 and 63 bps in 9M, in line with management's target.

As the CEO of Alpha Bank Group said in a statement, "We succeeded in completing, in less than the expected time, the Romanian leg of our partnership with UniCredit and accelerated the €300 million AT1 issue. These actions resulted in a Common Equity Tier 1 (CET1) capital of 16.5% following the completion of the Romanian transaction, thus achieving our capital and MREL target 15 months ahead of schedule. In addition, we have initiated a number of actions to further reduce the MREL ratio and now anticipate reducing it to below 4% by the end of the year, achieving our business plan target two years early."

It is worth noting that the strong profitability achieved by the bank led to a 14% increase in earnings per share (EPS) compared to the nine months of 2023, which stood at €0.27, while according to previous management estimates, EPS will be around €0.34 in 2024 and is expected to exceed €0.35 in 2026.

Finally, according to management, the resilience of net interest income despite downward pressure from falling interest rates, strong loan portfolio growth, and accelerating fee income momentum, supported by the expected benefits as a result of the UniCredit partnership, are expected to lead to earnings growth and strong capital generation to distribute higher dividends to shareholders.

"Our partnership with UniCredit is progressing rapidly. In addition to the transaction in Romania, we launched in October the onemarkets fund in Greece, having already allocated more than €150 million to our clients, while the transaction involving Alpha Life has entered the implementation phase," Psalti said. Finally, management announced that it aims to accelerate the amortization of DTCs, with a target of zero amortization in 2033.