Alpha Bank on Wednesday reported after tax earnings of 41.2 million euros in the third quarter of 2016 and profits of 22.2 million in the nine-month period from January to September.
Alpha Bank’s CEO, Demetrios P. Mantzounis, commenting on the results, stated: “The nine-month operating performance of Alpha Bank along with the return to profitability are in line with our targets and guidance for 2016.We are fully focused on improving our asset quality and funding profile, while preserving our strong capital base and improving efficiency ratios. As far as Non Performing Exposures are concerned, in the third quarter of the year we made a significant step to articulate our ambition for the reduction of the stock in the medium term, through operational targets agreed with SSM. The timely and successful completion of the second review is expected to enhance confidence indicators and trigger positive developments in the first quarter of next year. The ongoing improvement of the institutional framework and a solid recovery of the Greek Economy are necessary ingredients for the success of our efforts”.
The bank said that profitable nine-month was driven by de-escalation of cost of risk and improvement in pre-provision income. – Core Pre-Provision income increased by 4.2 pct on an annual basis in the nine-month period to 896.4 million euros mainly on the back of improved core revenue performance and operating efficiencies. Operating expenses amounted at 841.1 million euros, down by 1.3 pct year-on-year and in line with target set of 1.15 billion euros for the year.
Net interest margin improved by 20 bps year-on-year to 2.9 pct. Cost to income ratio reduced to 48.4 pct from 49.7 pct a year ago. Strengthened capital position with Common Equity Tier I ratio (CET 1) up by 20 bps on a quarterly basis to 16.8 pct at the end of September 2016. Tangible Book Value, the highest among Greek Banks, at 8.5 billion euros, implying tangible book value per share of 5.6 euros.
Fully loaded Basel III CET1 at 16.4 pct. Further reduction in Eurosystem funding fell to 20.8 billion euros in Q3 2016 driven by deposits inflows and EFSF bonds disposals. In November 2016, the bank’s reliance on ELA stood at 14.2 billion euros, down by 5.4 billion so far this year and 8.8 billion euros since the imposition of Capital Controls at the end of June 2015.
NPE operational targets submitted to SSM, incorporates a 48 pct reduction in NPLs and 36 pct in NPEs by the end of 2019. NPE formation in Greece was lower by 71 pct on an annual basis in the nine month period in 2016. NPLs were at 38.3 pct at the end of September 2016 with declining formation, down by 78 pct year on year. High cash coverage of 68 pct, supports implementation of the bank’s NPE Business Plan. Loan Loss Provisions was 257 million euros in Q3 2016, implying Cost of Risk (CoR) at 168 bps for Q3 2016. COR for the January-September period 2016 (excluding AQR) was down by 24 pct year on year.