Alpha Bank eyes 25% increase in profits
The management of Alpha Bank is aiming for a 25% increase in profitability in 2023, focusing on paying a dividend to its shareholders in combination with strengthening its capital base and further reducing the nonperforming loan ratio below 7%.
“Maximizing the value for our shareholders remains our main strategy,” pointed out the CEO of the Alpha Bank group, Vasilis Psaltis, speaking in the context of informing investors about the results of the previous financial year in which the group returned to profitability, recording net profits after taxes of 398 million euros.
The bank’s operational objectives according to management are focused “on growth and value creation through the provision of financing to business activities with a risk-adjusted return on capital, creating the conditions for the payment of dividends.” In this context, the management is expected to present in the second quarter of the year the updated business plan with the goals of the new year.
According to the management, despite the challenges at the macroeconomic level, the achievement of the objectives of the business plan continues unhindered, with an increase in serviced loans, an acceleration of the growth of net interest income benefiting from the higher interest rates, diversification of sources of income through the strengthening of commissions, further cost savings, improved loan portfolio quality and organic capital generation.
Based on the results, the portfolio of serviced loans increased by 10% on an annual basis, as a result of a net credit expansion of €2.4 billion to businesses, exceeding the target of €2.2 billion set for 2022.
The group’s nonperforming exposures (NPE) ratio stood at 7.8%, compared to 13.1% last year, and the stock of nonperforming loans decreased to €3.1 billion (€2.9 billion in Greece). The reduction by €400 million in 2022 reflects, according to management, the resilient performance in the quality of the loan portfolio and the reduction in the perimeter of NPEs, as a result of their regular servicing. Over three quarters (78%) of the group’s NPEs concern private loans with collateral. The coverage ratio reached 41%.
In 2022, net interest income was €1.3 billion and is down 3.8% year-on-year due to the reduction in nonperforming exposures and sales that took place in 2021.
