Provisions expand Alpha’s losses

Alpha Bank on Thursday reported growth in 2015 figures in terms of revenues from banking activities and results before provisions, as well as the strengthening of its capital base, but its final result showed an increase in losses to 1.37 billion euros against 329.7 million euros in 2014.

The expansion of losses is due to a significant increase in the stock of provisions for nonperforming loans, which grew 63 percent year-on-year to reach 3.02 billion euros, from 1.85 billion in 2014. This has taken the NPL coverage index to 69 percent.

The bank announced that the results before provisions came to 1.15 billion euros, up 8.4 percent on an annual basis. This was attributed to a great extent to the efficient reduction of operating expenses that amounted to 1.15 billion euros, bettering the target set at 1.2 billion euros in 2015.

After the successful recapitalization of Alpha by 2.56 billion euros last year, its capital base reached 8.7 billion euros that amount to a value of 5.64 euros per share. Its Core Tier 1 capital index climbed to 16.7 percent in end-December, against 14.3 percent a year earlier.

The bank stated that its capital base is “clean,” without any contingent convertible bonds (CoCos) or state-owned privileged shares, while the holding of the private sector amounts to 89 percent and that of the Hellenic Financial Stability Fund to just 11 percent.

Despite the deterioration in financial conditions last year, the lender improved its liquidity in the fourth quarter, with European Central Bank funding reduced by 2.7 billion euros thanks to the share capital increase and the strengthening of deposits.

New bad loans in Q4 came to 214 million euros, against 520 million in Q3, for the NPL index to amount to 36.8 percent in end-2015. This is explained by the increase in debt arrangements and in the collection of expired arrears.

Alpha’s share closed on Thursday with daily gains of 1.74 percent, before the announcement of the 2015 results.