Alpha Bank on Tuesday reported lower third-quarter profits after higher bad-debt provisions and said it would launch a big securitization of soured loans to clean up its balance sheet.
Alpha, which is 11 percent owned by the country’s bank rescue fund HFSF, reported net profit from continuing operations of 4.8 million euros after net earnings of 59.4 million euros in the second quarter.
Provisions for bad debt rose 6.3 percent quarter-on-quarter to 261.5 million euros.
Alpha, Greece’s fourth largest bank, said it planned a 12-billion-euro securitization of soured loans or so-called nonperforming exposures (NPEs) to speed up its balance sheet cleanup and cut its NPE ratio to 20 percent from 44 percent.
“We are embarking today on a comprehensive transformation plan, designed to leave the financial crisis behind us by dealing decisively with legacy asset quality issues and by improving significantly our profitability,” CEO Vassilis Psaltis said in a statement.
The bank said the Greek government’s Hercules asset protection scheme will “act as a catalyst” as it intends to apply for up to 3.7 billion euros of state guarantees for the securitization under the scheme.
Alpha said its nonperforming loans ratio dropped to 30 percent of its book from 32.7 percent at the end of June.