Alpha Bank on Thursday announced after tax earnings of 42.3 million euros in 2016, returning to profitability.
Alpha Bank’s CEO Demetrios P. Mantzounis stated: “In 2016 we have delivered a profitable performance despite the significant provisions of 1.2 billion euros for the year. The higher net interest margin and the improving cost to income ratio supported our operational performance, while we preserved our strong capital base and enabled further balance sheet restructuring.
It is important to note that we reduced Eurosystem funding exposure by 25 pct in a year and further diversified our funding sources away from central bank funding.
During 2016, we have continued our deleveraging in SEE and we have now exited from four countries in the region while we have continued to divest from non-core assets, in line with the restructuring plan, as agreed with the European Commission.
As far as asset quality is concerned we have experienced significantly lower formation of non performing exposures while we have set the target for the reduction of the stock in our business plan. The implementation of our plan is also dependent on the recovery of the Greek economy and the full and proper implementation of pending NPL reforms. In this respect we are looking forward to the timely successful completion of the second review which will significantly contribute to that end”.
Alpha Bank returned to profitability in 2016, with higher Pre-Provision Income and lower Cost of Risk. Profit after Tax was 42.3 million euros. Core Pre-Provision income was 1,190.6 million euros, up by 6 pct year-on-year despite balance sheet deleveraging by 4.4 billion, driven by improved core revenue performance and operating efficiencies. Net Interest Margin improved by 20 bps year-on-year to 2.9 pct. Cost to income ratio reduced to 48.2 pct from 50.2 pct a year ago. Capital base further strengthened with Common Equity Tier I ratio (CET 1) up by 30 bps (on a quarterly basis) to 17.1 pct, supported by improving valuation of AFS portfolio and further reduction of Credit Risk. Including the positive impact from the sale of Serbian operations, Common Equity Tier I ratio (CET 1) standed at 17.3 pct, up by 50 bps year-on-year. Tangible Book Value, the highest among Greek Banks, at 8.7 billion euros, implying a Tangible Book Value per Share of 5.66 euros. Significant deposit inflows were recorded in the fourth quarter of 2016 totaling 1.4 billion euros, partially reversed in the beginning of 2017, affected by seasonality and the uncertainty from the delays over the completion of the second review. Further reduction in Eurosystem funding of 2.5 billion euros in the fourth quarter of 2016, to 18.3 billion, driven by deposits inflows, securities disposal and SME securitisation. In December 2016, reliance on ELA stood at 13.2 billion euros, down 6.5 billion since December 2015. Eurosystem funding was down by 25 pt year-on-year. NPLs were down by 0.2 billion quarter-on-quarter at 38.1 pct at the end of December 2016.
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