Greek bank Alpha Bank remains profitable, bad debt ratio hits single digits
Band George Georgiopoulos
ATHENS, August 2 (Reuters) – Alpha Bank ACBr.ATGreece’s third-largest lender by market value, reported lower net profit in the second quarter due to higher provisions for loan losses and lower commission and fee income.
Alpha Bank, 9% owned by Greek bank rescue fund HFSF, reported net profit of 117.3 million euros ($119.48 million) from April to June compared to 125.4 million in the first quarter .
Loan impairment provisions increased 76.8% quarter-on-quarter to €89.2 million. Alpha’s ratio of so-called non-performing exposures (NPEs) fell to 8.2% of its loan book.
“This is the first time we have seen a single-digit NPE ratio in over a decade and it represents a stark contrast to our NPE ratio of 48.9% at the start of 2019,” Chief Executive Vassilis Psaltis said. .
New loan disbursements in Greece reached 1.9 billion euros in the quarter, allocated to key sectors such as trade, manufacturing, tourism and infrastructure.
Despite an uncertain macroeconomic outlook – given the war in Ukraine, high energy costs and inflation – Greece is seeing a robust rebound in tourism and stronger employment, which means its growth prospects are brighter than the EU average, he said.
Alpha’s net fee income reached €100.7 million, down 6.7% compared to the first quarter which had benefited from significant project finance fees.
Eurosystem funding was unchanged quarter-on-quarter at €13 billion, reflecting the full utilization of the European Central Bank’s TLTRO III borrowing margin.
NPE formation in Greece has remained broadly stable as slightly higher capital inflows have been offset by larger loan curings – or restructured bad debts that are performing and in repayment – and refunds. Alpha’s NPE stock was reduced to 3.2 billion euros from 4.9 billion in the previous quarter.
($1 = 0.9817 euros)
(Reporting by George Georgiopoulos; Editing by David Holmes)
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