• Earnings Per Share (EPS): EUR0.35 with 9% annual growth in normalized profits.
• Return on Tangible Equity: 14%.
• Capital Ratio: 16.3% CET1.
• Reported Profit: EUR654 million, up 6% versus last year.
• Normalized Profit: EUR861 million, up 9.4% for the year.
• Distributions: EUR281 million or EUR0.12 per share, with EUR210 million proposed for buyback.
• Performing Loans Growth: Up 16% over two years; 8% in the quarter and 12% in the year.
• Customer Funds Growth: Up 2% in the quarter and 14% year-on-year.
• Net Interest Income (NII): Practically flat for the year.
• Fee and Commission Income: Up 12% versus 2023, 5% above EUR400 million guidance.
• Asset Management Growth: Total AUMs up 17% versus last year.
• NPE Ratio: Down to 3.8%.
• Cost of Risk: 63 basis points for the year.
• Capital Generation: 152 basis points organically for the year.
• Dividend Accrual: 34 basis points in Q4, total for the year just above 100 basis points.
• Loan Disbursements: EUR10 billion for the year, up over 30% year-on-year.
• Deposit Growth: 5.3% for the year.
• Buyback Proposal: 75% of distributions in favor of buyback.
• Acquisition of Flexfin: Expected completion in Q2 2025.
• Acquisition of AstroBank Assets: Expected closing by end of 2025, with profits from Cyprus expected to double.

• Warning! GuruFocus has detected 7 Warning Signs with ALBKF.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Alpha Services and Holdings SA (ALBKF) reported a 9% annual growth in normalized profits, translating into a 14% return on tangible equity.
• The company achieved a capital ratio of 16.3%, surpassing its targets ahead of schedule.
• Alpha Services and Holdings SA has doubled its profitability through structural improvements and targeted capital reallocation.
• The company has successfully reduced its NPE ratio below 4%, two years ahead of plan.
• Alpha Services and Holdings SA has completed EUR2.6 billion of sustainable disbursements in two years, showcasing its commitment to sustainability.

Negative Points

• Operating costs have landed higher than expected, even accounting for seasonal effects.
• The company faces pressure on the top line despite growth in operating income.
• There is a lag effect in repricing time deposits, impacting the deposit beta.
• Alpha Services and Holdings SA has accrued EUR36 million in negative one-offs, affecting the bottom line.
• The company anticipates a mild escalation in the cost of risk as it manages a smaller portfolio of NPEs.

Q & A Highlights

Q: There is a lot of talking in the market about M&A activity. What gives you confidence to expect that you can deploy your excess capital in a profitable way in the outer periods? A: Vassilios Psaltis, CEO: We have demonstrated our ability to deploy capital profitably through recent acquisitions like Flexfin and AstroBank. Our core equity Tier 1 capital is high, allowing us to invest organically, distribute earnings to shareholders, and pursue inorganic opportunities that align with our strategic and financial criteria. We focus on bolt-on actions that enhance our product offering or market share.

Q: How can you substantiate your guidance for performing loan growth, which seems higher than consensus estimates? A: Vasilis Kosmas, CFO: We project the market to grow by EUR9-10 billion annually, maintaining our market share. This is consistent with Greece's recent growth and GDP projections. Key sectors include infrastructure, energy transition, and shipping. Our partnership with UniCredit and the democratization of growth in Greece will also support this expansion.

Q: Looking at your EPS guidance, can we expect no more material NPE cleanup charges? A: Vasilis Kosmas, CFO: We have a one-off EUR50 million provision for 2025, but it's not specified for NPE cleanup. We don't anticipate significant charges beyond this.

Q: What sectors and segments do you see as most attractive for loan growth? A: Vasilis Kosmas, CFO: We expect growth in infrastructure, renewable energy, and shipping. Additionally, our relationship with UniCredit allows us to participate in good credits beyond Greece. The growth is also expected to trickle down from large corporates to SMEs and eventually to smaller businesses.

Q: Can you elaborate on the impact of your partnership with UniCredit on your growth strategy? A: Vassilios Psaltis, CEO: Our partnership with UniCredit provides a competitive advantage, allowing us to participate in syndications and access good credits beyond Greece. This relationship enhances our ability to grow our loan book and capture opportunities in various sectors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.