The country’s second-biggest lender, Alpha Bank, posted a broadly-in-line rise in fourth-quarter profit yesterday, with strong mortgage and consumer lending boosting its full-year results. Alpha Bank’s fourth-quarter group net profit rose 48.3 percent year on year to 141.9 million euros. Analysts in a Reuters poll were forecasting fourth-quarter net profit of 136 million euros on average. The group’s 2005 net profit rose 23 percent to 502.2 million euros, slightly above consensus forecasts of 493.6 million euros. Greek bank earnings rose last year thanks to strong business volumes in retail lending, wider margins from a better loan mix and a greater contribution from operations in Southeastern Europe. «In the last quarter of 2005, our business continued to expand briskly, surpassing market growth, both in Greece and in Southeastern Europe,» said Alpha’s Managing Director Dimitris Mantzounis. «Conditions have been now firmly established for sustaining this sound performance over the longer term.» Based on its business plan, Alpha wants to become one of the largest banks in Southeastern Europe with a network of 1,200 branches and a 15 percent market share, including Greece. It is targeting an average annual 20 percent rise in earnings per share in the 2006-08 period. Alpha trades at 14.5 times its 2006 estimated earnings according to Egnatia Finance, at a premium to European banks in the DJ Eurostoxx banks «SX7E» index, where the price-to-earnings multiple is estimated at 12.6. Upbeat on loan growth Alpha executives remain upbeat on the pace of loan growth this year, particularly mortgages and consumer credit. «We continue to believe that the pace of credit growth will slow down but stay around 16 percent overall this year. In mortgage lending, consumer loans and credit cards the pace should stay in the double digits, above 20 percent,» Alpha’s Chief Financial Officer Marinos Yiannopoulos told Reuters. «Some compression of spreads due to competition is expected but our business plan takes this into account,» he said. Analysts said they expected Alpha to continue benefiting from Greece’s credit expansion. «We see a total loan growth of 18.5 percent for Alpha this year, with consumer loans expanding by 20 percent and mortgages by 12 percent. This should lead to net profit growth of 24 percent,» said Costas Xenos, head of research at Egnatia Finance. Alpha Bank’s net interest income grew 16.1 percent last year to 1.225 billion euros, reflecting its switch into what it called «high-growth, high-spread» retail business in Greece and Southeastern Europe. Net interest margin (NIM) last year was 3.1 percent. The group – which is present in Romania, Bulgaria, Serbia, Cyprus and Albania – said consumer credit and mortgage loans grew 40 percent and 36.4 percent respectively last year. Its market share in home loans rose to 15 percent from 14.3 percent in 2004. In consumer credit its market share including credit cards rose to 12.6 from 11.5 percent in 2004. Alpha Bank said it will raise its 2005 dividend per share by 40 percent to 0.84 euros and will issue bonus shares on the basis of four for every 10 held. Operations outside Greece contributed 9 percent of the group’s pretax profit, with business expanding rapidly. Lending grew 34 percent while deposits rose 39 percent. Alpha’s shares, up 24.3 percent year-to-date, have outperformed the broader Greek market by about 9 percent. They opened 1 percent higher at 31.02 euros yesterday, a 52-week high.