Alpha Bank announced a net profit after tax of €211.1 million, up 75% quarter-on-quarter or 89.9% year-on-year, for the first quarter of the year. The increase in profits is the result of a higher core profit before provision (+19.7%), as well as a further smoothing of the credit risk cost.
In particular, the bank announced the following:
In Q1 2024, the return on tangible equity based on adjusted earnings after taxes was 13.5%. Adjusted earnings per share amounted to €0.092, while the FL CET1 ratio increased by 35 bps on a quarterly basis.
Net profit after taxes amounted to €211.1 million, up 75% quarter-on-quarter or 89.9% year-on-year, due to the higher core profit before provisions (+19.7%) as well as the further smoothing of credit risk costs.
The Group's Serviced Loan Portfolio increased by €0.2 billion to €29.9 billion, up 1% quarter-on-quarter and 6% year-on-year, not taking into account the reclassification of Alpha Bank Romania. The first quarter performance as well as the upcoming planned disbursements confirm the outlook for 2024.
The group's deposits decreased by €1.2 billion on a quarterly basis to €47.3 billion, in line with the development of the banking system's deposit balances as well as loan repayments. Assets under Management (AUMs) increased by €1.5 billion on a quarterly basis, or 9% and 48% year-on-year. Overall, deposits and AUMs strengthened by 4% year-on-year. Term deposits as a percentage of the bank's domestic deposits remained unchanged at 25% (excluding deposits of government entities), with deposit rate growth as a percentage of market interest rate (beta) growth evolving at a slower pace than expected.
The group's NPL ratio stayed the same at 6% because higher outflows from regular loan servicing (curings) and repayments were balanced out by moving €0.1 billion of government-guaranteed loans to the edges of the NPL portfolios to meet regulatory requirements. Taking into account the "Gaia" transaction, the NPI stands at 5.7%, down 25 basis points. The cost of credit risk was 69 bps, in line with management's target.
The FL CET1 Ratio got stronger by 35 basis points compared to Q2 2023. This was due to 67 basis points of positive contribution from organic profitability in the quarter, a 2 basis points negative impact from transactions, a 7 basis points negative impact from other regulatory items, and a 24 basis points negative impact when the provision for a dividend distribution of about 35% of 2024 earnings is taken into account. Taking into account the positive impact on risk-weighted assets (RWAs), the FL CET1 ratio stood at 16.2%, and the Total Capital Adequacy Ratio stood at 20.9%.
The bank's tangible net asset value amounted to €6.6 billion, 13% higher than in the corresponding quarter of 2023, as a result of the upward trend in the bank's organic profitability.
CEO STATEMENT
Vassilis Psaltis: Implementation of the strategic plan continues
"After a landmark year as it was for Alpha Bank in 2023, our bank maintains its strong momentum in 2024, achieving strong financial results for another quarter in full alignment with our strategy," says the bank's CEO.
"The consistent implementation of our Strategic Plan continues apace with a positive first quarter performance, ensuring that we are on track to deliver growth, further improve our profitability and continue to create meaningful returns for our Shareholders.
The Bank's net profit in Q1 2024 amounted to €211.1 million, the highest level since the financial crisis, with a Return on Tangible Equity (RoTBV) of 13.5%. This strong performance has allowed for healthy internal capital generation, with the CET1 ratio reaching 14.6%, and we expect a further increase in the coming quarters as a result of stronger earnings and the completion of the transactions underway. As a result, we are fully meeting our commitments to create value and reward our Shareholders.
In particular, we are very pleased with the strong growth in our new healthy lending to the real economy, while we are also seeing signs of recovery in lending to households, which has allowed us to strengthen our overall portfolio by 6% year-on-year.
Equally important is the unabated tendency of our Clients to widen the diversification of their assets, increasing their investments. Our Clients' preference for the investment products we offer boosted mutual fund inflows by €1.8 billion, increasing our assets under management to €17 billion and confirming our leading position in this sector in the Greek market. In addition, we are working even harder to implement our successful partnership with UniCredit in all its individual aspects.
On a macroeconomic level, the Greek economy continues to stand out as one of the fastest-growing economies in the Eurozone. The latest economic data confirm that Greece is maintaining the strong growth momentum that prevailed in 2023, while high levels of foreign investment and rising employment rates are expected to set the stage for another year of above-average economic growth in the Eurozone. Geopolitical uncertainties are undoubtedly intensifying, which could have a negative impact on energy prices and inflation. However, equally undeniable is the fact that the Greek economy has turned a corner and is meeting the conditions to grow in the midst of this uncertainty, with a springboard to regain investment grade status.
Looking ahead, we are pleased to confirm our estimates for 2024. The momentum underpinning Net Interest Income remains positive, if not slightly better than our initial forecasts, while prudent cost and balance sheet management ensures that the fundamentals are in line with our estimates. These factors, combined with the strengthening of the Greek economy, support our outlook and give us confidence that we will continue to execute our strategy as planned.".
