Alpha Bank has reported net profit of € 10.5 million in the first quarter of 2011, a decline of 79.6%, mainly as a result of market dislocation and the deepening recession of the Greek economy.
Net interest income reached € 429.4 million, down 5.8%, having been impacted by the continuous strain in the Greek deposit market. Compared to the previous quarter, our net interest income decreased by € 16.7 million as a function of the cost related to the assumption of an additional tranche of government guarantees and the calendar effect. Net fee and commission income stood at € 69.9 million, a decrease of 15.8%, in line with the slow-down in new loan disbursements and network-related transactions.
Income from financial operations reached € 35.9 million, while other income stood at € 16.9 million.
Operating costs were down by 4.5% to € 273.9 million, which corresponds to a cost-to-income ratio of 49.6%.
Staff costs decreased by 6.8% to € 133.5 million, mainly as a result of natural attrition and marginal replacement in Greece. General expenses decreased by 3.5% to € 116.9 million, compliant with the implementation of our procurement initiatives. In Greece, operating costs were reduced by 5.8% to € 196.6 million, while in SEE our cost base shrank by 1.1% to € 75 million.
Customer assets reached € 40.9 billion and total deposits stood at € 37.6 billion. In Greece, deposits amounted to € 30.8 billion, down by € 323 million compared to the end of 2010. In SEE, our deposits stood at € 6.5 billion, down € 338 million compared to the end of December 2010, as the increase in household deposits was counterbalanced by outflows in deposits of wholesale customers. Finally, Private Banking balances stood at € 2.6 billion and mutual fund balances declined to € 1.3 billion, both affected by the adverse market environment.
Loans and advances to customers (gross) decreased by 4.8%, reaching € 50.8 billion compared to € 53.3 billion at the end of March 2010. This development was driven primarily by a 2.8% volume decrease in Greece and a further 7.1% decrease in our SEE portfolio. In the first quarter, the trend in deleveraging continued, with our loan portfolio balances decreasing by a further € 0.8 billion.
Impairments on loans amounted to € 260.3 million, with the cost of credit rising to 204 bps for the first quarter compared to 150 bps in Q1 2010. Our NPL ratio, under IFRS 7, increased by 80 bps reaching 9.3% at the end of March 2011. NPLs reached 9.6% in Greece and 9.1% in SEE. Allowances for impairments were strengthened further to € 2.4 billion, representing 4.8% of loans compared to 3.4% at the end of March 2010. Τhis translates to a coverage ratio of 51% of NPLs, or 129% inclusive of collaterals.
Yannis S. Costopoulos, Chairman of the Bank commented:
“One year after the implementation of the fiscal consolidation and structural reform programme that Greece is committed to, Alpha Bank remains well-placed to face the challenges ahead of it. With our strong capital position and conservative approach towards risk taking, we continue to provide our Customers, our Staff and our Shareholders the assurance and the support that we have always demonstrated in our 130 year history.”
Demetrios P. Mantzounis, Managing Director – CEO, stated:
“In the first quarter of 2011, we continued to focus on our key priorities; deleveraging our balance sheet, strengthening our capital ratios, reducing our exposure to the ECB and further building up our loan loss reserve ratios. We remain also committed to improving our operational efficiency as the realignment of our cost base continues to underpin our performance.”
Net interest income reached € 429.4 million, down 5.8%, having been impacted by the continuous strain in the Greek deposit market. Compared to the previous quarter, our net interest income decreased by € 16.7 million as a function of the cost related to the assumption of an additional tranche of government guarantees and the calendar effect. Net fee and commission income stood at € 69.9 million, a decrease of 15.8%, in line with the slow-down in new loan disbursements and network-related transactions.
Income from financial operations reached € 35.9 million, while other income stood at € 16.9 million.
Operating costs were down by 4.5% to € 273.9 million, which corresponds to a cost-to-income ratio of 49.6%.
Staff costs decreased by 6.8% to € 133.5 million, mainly as a result of natural attrition and marginal replacement in Greece. General expenses decreased by 3.5% to € 116.9 million, compliant with the implementation of our procurement initiatives. In Greece, operating costs were reduced by 5.8% to € 196.6 million, while in SEE our cost base shrank by 1.1% to € 75 million.
Customer assets reached € 40.9 billion and total deposits stood at € 37.6 billion. In Greece, deposits amounted to € 30.8 billion, down by € 323 million compared to the end of 2010. In SEE, our deposits stood at € 6.5 billion, down € 338 million compared to the end of December 2010, as the increase in household deposits was counterbalanced by outflows in deposits of wholesale customers. Finally, Private Banking balances stood at € 2.6 billion and mutual fund balances declined to € 1.3 billion, both affected by the adverse market environment.
Loans and advances to customers (gross) decreased by 4.8%, reaching € 50.8 billion compared to € 53.3 billion at the end of March 2010. This development was driven primarily by a 2.8% volume decrease in Greece and a further 7.1% decrease in our SEE portfolio. In the first quarter, the trend in deleveraging continued, with our loan portfolio balances decreasing by a further € 0.8 billion.
Impairments on loans amounted to € 260.3 million, with the cost of credit rising to 204 bps for the first quarter compared to 150 bps in Q1 2010. Our NPL ratio, under IFRS 7, increased by 80 bps reaching 9.3% at the end of March 2011. NPLs reached 9.6% in Greece and 9.1% in SEE. Allowances for impairments were strengthened further to € 2.4 billion, representing 4.8% of loans compared to 3.4% at the end of March 2010. Τhis translates to a coverage ratio of 51% of NPLs, or 129% inclusive of collaterals.
Yannis S. Costopoulos, Chairman of the Bank commented:
“One year after the implementation of the fiscal consolidation and structural reform programme that Greece is committed to, Alpha Bank remains well-placed to face the challenges ahead of it. With our strong capital position and conservative approach towards risk taking, we continue to provide our Customers, our Staff and our Shareholders the assurance and the support that we have always demonstrated in our 130 year history.”
Demetrios P. Mantzounis, Managing Director – CEO, stated:
“In the first quarter of 2011, we continued to focus on our key priorities; deleveraging our balance sheet, strengthening our capital ratios, reducing our exposure to the ECB and further building up our loan loss reserve ratios. We remain also committed to improving our operational efficiency as the realignment of our cost base continues to underpin our performance.”
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