Alpha Bank, the third-largest lender in recession-hit Greece, yesterday said full-year net profit fell by a third on weak loan growth, higher provisions and a one-off tax.
Net earnings slid to €349.8m (£316m) after the €42m tax, below the average forecast of analysts, who had estimates ranging from €346m to €402m.
A recession in Greece, with economic activity contracting by two per cent, hit earnings as credit growth weakened and provisions for loan impairments rose. The downturn in the Balkans, where Greek banks have expanded, also weighed.
“The success of our €986m rights issue has strengthened significantly our balance sheet and our confidence to cope with the impact of the ongoing difficult macro conditions in the Greek market,” board chairman Yannis Costopoulos said in a statement.
He said tough fiscal measures to repair public finances would result in subdued growth in the short term but would bring permanent benefits in the medium term.
Alpha Bank, which is also present in Bulgaria, Romania, Serbia, Cyprus and Albania, said net interest income last year dropped two per cent to €1.763bn. Net interest income remained steady at 2.6 per cent in the fourth quarter.
Loans grew two per cent to €53bn last year, driven by 2.9 per cent volume expansion in Greece and 1.3 per cent in southeast Europe. Bad debt provisions rose 24.8 per cent to €676.3m.
City A.M. Reporter