Alpha Bank’s Q1 profit beats forecasts

Robust lending growth at home and in southeast Europe boosted Alpha Bank's first-quarter profit with management confident Greece's third-largest lender is on track to meet key targets. The bank said group net profit grew by a better than expected 18 percent to 205 million euros ($322 million).
Analysts in a recent Reuters poll had on average forecast net earnings of 193 million euros, excluding an extraordinary gain of 82 million from the sale of Alpha's insurance arm last year to French insurer AXA.

Greek banks , big outperformers in 2007, have been under pressure this year, shedding more than 24 percent of their market capitalisation, hurt by market turmoil, funding concerns and worries about the macro outlook in the Balkans where they have expanded.
Alpha is targeting net earnings of 1.4 billion euros by 2010. The group grew profit by 54 percent to 850 million euros last year.

The group is also present in Romania, Bulgaria, Serbia, Albania and Cyprus and recently set its footprint in Ukraine, acquiring 90 percent of Astra Bank which it expects will start to contribute to group profits by 2010. Operations in southeastern Europe contributed 16.5 percent or 42.9 million euros to group pretax profit, growing 74 percent.

Alpha Bank said net interest income, net of impairment, grew 24.9 percent to 374.4 million euros, with its net interest margin expanding by 30 basis points. It said lending grew unabated as the bank added 2.3 billion euros to its overall loan balances. With strong liquidity at the turn of the year Alpha sought to protect its deposit margins and abstained from aggressive pricing practices during the quarter.

Alpha shares trade about 10.6 times expected 2008 earnings, versus a multiple of 10.4 for European peers according to Reuters Estimates. The shares, down 17 percent so far this year, have outperformed the broader Greek market which has lost 22.7 percent. (Reuters)