After a major cleanup of its loan portfolio and an inflow of fresh capital, Alpha Bank plans to finance business plans to the tune of €900 million by the end of the year, it announced yesterday, along with its first-half results. The bank will prioritize businesses active in the energy, infrastructure and tourism sectors.
The bank issued loans of some €2.3 billion in the first half of the year and its portfolio of performing loans stood at €24.4 billion, a year-on-year increase of €700 million or 3%. Net credit growth was €400 million and Alpha expects demand for financing to grow in the second half, as many businesses try to implement investment plans.
“We have already achieved great progress in our plan for further reducing nonperforming loans, by (implementing) multiple transactions in excess of €8 billion in Greece and Cyprus even ahead of schedule, with the aim of reaching a group NPE (nonperforming exposures) ratio of 7% in 2022,” CEO Vassilis Psaltis said in a statement.
The NPE ratio stood at 26.1% at the end of the first half, from 42.8% at the end of the first quarter, and the bank expects it to drop to 13% by the end of the year. It said that new loan non-payments, at €400 million, were half as much as expected.
Alpha’s adjusted after-tax profit was €213 million, while the net result, after adjusting for the losses of the “Galaxy Project” securitization of bad debt, was a €2.3 billion loss.
The cost of the new transactions is estimated at €1.6 billion and, according to management, €600 million has already been absorbed and another €700 million in extra provisions will be made by the end of the year.
The impact of the new loans on capital is estimated at 1%. “The total capital ratio, after the implementation of Project Galaxy and the €800 million capital increase, is 17.4%, while the Tier 1 ratio (CET 1) is at 14.8% and allows us to credibly support the expansion of our loan portfolio,” Psaltis said.