Alpha Bank, Greece’s second-largest lender, on Wednesday announced a hefty 37 percent rise in nine-month profit, with operating revenues up 53.5 percent. Net profit advanced to 305 million euros from 223 million euros the same period last year, while operating earnings increased to 317.2 million euros from 206.6 million euros. The net interest margin rose to 3.17 percent from 2.98 percent in the same period of 2003, on the back of spread strengthening and lending growth. Fee and commission income rose significantly by 22.6 percent to 258.4 million euros from 210.8 in 2003, with strong performances in loan revenues (43.8 percent), asset management (24.9 percent), brokerage fees (80.2 percent) and investment banking (22.6 percent). Core business income rose 17.9 percent, and operating expenses just 4.1 percent, despite an increase in staff payments by 4.8 percent – mainly due to a large raise under a collective pay pact and because staff numbers are declining steadily. General expenses rose 4.2 percent with a rapid advance in advertising costs (50.7 percent) and EDP expenses (8.6 percent), while all other expense categories showed a 1.1 percent decline. The cost/income ratio was at 48.6 percent, with return on equity at 19 percent. Loans rose 14.2 percent year-on-year to 22.4 billion euros. Mortgage balances advanced 22.8 percent, consumer loans 52.1 percent and credit card outstanding dues 29.9 percent, gaining market share for Alpha Bank in loans to individuals. This growth was facilitated by agreements with large retailers and real estate developers. Corporate lending in Greece rose in the same period by 8 percent to 13.7 billion euros, maintaining Alpha’s top market share of 16.7 percent. At end-September, assets under management totaled 33.5 billion euros, rising year-on-year by 6 percent. Core deposits (sight and term) grew 7.3 percent, above nominal GDP growth. Finally, Alpha Bank’s international activities grew rapidly, adding considerably to profits: Lending in Southeastern Europe grew by a brisk 21 percent year-on-year, while operations in the region contributed 9 percent of the consolidated profit before tax. UBS maintains ‘buy’ «Strong» but without surprises, was UBS’s assessment of Alpha Bank’s nine-month results. The Swiss bank confirmed its «buy» recommendation for Alpha shares, with a target price of 28.4 euros. «Alpha continues to benefit from a combination of well-balanced growth between retailers and small and medium-sized enterprises, and of the improving mix of assets and durable spreads,» said UBS analyst Dimitris Spanodimos. He added that «attention to aspects that did not have such good results, such as consumer loans, is now beginning to bear fruit» and that cost and asset quality trends are positive.