ECONOMY

Alpha profits up 45 pct

Alpha Bankshares climbed more than 2 percent yesterday after Greece’s second-largest lender by assets delivered better-than-expected net profit growth of 45 percent for 2004 and boosted its dividend. The group said 2004 net earnings rose to 411.7 million euros ($545 million) on strong loan growth. Analysts had forecast in a Reuters poll, on average, a 37 percent rise in net profit after minorities to 388.8 million euros. Alpha shares were 2.7 percent higher at 26.64 euros in mid-session trade. Alpha Bank will propose a dividend of 0.72 euros per share, up 44 percent from an adjusted 0.52 euro dividend in 2003. It will also seek shareholder approval for a 2-for-10 bonus share issue and a share buyback program for up to 3 percent of its share capital. «Alpha’s results beat analysts’ estimates by 5.5 percent due to a positive core banking performance. The bank delivered on cost control targets. The results and the bonus issue pleased the market,» said analyst Dimitris Apistoulas at EFG Securities. The group, which reported under Greek accounting standards, said net interest income rose 16.8 percent to 1.042 billion euros last year. «In 2005, a further strengthening of our position in retail banking, lending to small businesses in Greece and faster expansion in Southeastern Europe will be the main drivers, maintaining profitability at high levels,» the group’s Chairman Yiannis Costopoulos said in a statement. Alpha said lending in Greece grew 15.8 percent to 14.7 billion euros last year – mainly driven by mortgages, up 25.8 percent, and consumer credit, up 45.6 percent. «The improvement in net interest margin is due to the change in the loan mix in favor of retail lending,» said analyst Nikos Lianeris at Proton Securities. Alpha said its overall loan spread improved to 3.1 percent in the last quarter of 2004 from 3.06 in the first quarter. The bank, with a foothold in Albania, Bulgaria, Cyprus, Romania, the Former Yugoslav Republic of Macedonia and Serbia, is targeting further expansion. Its strategy going forward will be three-pronged: growth in retail banking, cost containment, and a stronger presence in neighboring Balkan countries. «Our target is to further expand our network of 150 branches to 250 by the end of 2007, mainly through organic growth, aiming for a 20 percent contribution to the group’s overall profitability,» Michael Masourakis, Alpha Bank’s head of economic research and strategy told Reuters.