Alpha firm on retail banking expansion
Alpha Bank, the largest privately owned bank in Greece, said yesterday it intends to double its volume in mortgage and consumer loans this year and indicated that it plans to continue its aggressive but highly successful strategy in retail banking, which nearly doubled its amount of mortgage loans and brought about a 64-percent jump in consumer loans last year. Alpha said its long-term goal is to hold a 25-percent market share. Its current market share is estimated at 18 percent. The bank said it aims to «expand aggressively into retail banking as this segment together with small- and medium-sized enterprises constitute the most dynamic banking activity.» Alpha’s decision to continue its offensive in retail banking came as it announced a 91 percent jump in mortgage loans and a 64 percent surge in consumer loans last year, against a market average increase of 37 percent and 30 percent respectively. Gross loans rose by 16 percent to 14.7 billion euros, 58 percent of which went to SMEs and 23 percent to corporate customers. The bank’s success in retail banking, however, was offset by the vagaries of the stock market, resulting in a 55.3-percent drop in trading income to 119.4 million euros and a 23.2-percent fall in commission income to 200 million euros. The result was a 7.8-percent drop in consolidated profits before taxes and after minorities. Alpha said the result «is considered satisfactory» in view of the sharp drop in interest rates last year, and as a result of the launch of the euro in accounting form, intense competition and the stock market’s second consecutive year of decline. It plans to ask shareholders at the annual general meeting to approve a dividend of 0.91 euros (310 drachmas) per share, equivalent to the previous year. Alpha’s decision to maintain an unchanged dividend should boost long-term investors’ confidence in the bank, said Contalexis Financial Services analyst Vassilis Vlastarakis. «Keeping a high dividend yield, especially in the current turbulent market, is an incentive for foreign investors to buy and hold on to Alpha stock,» he said. Alpha’s shares slipped 0.11 percent yesterday to close at 17.74 euros.
