Alpha Bank H1 profit falls 82%, beats forecast

Alpha Bank, Greece's third-largest lender, said on Tuesday first-half net profit fell 82.2% year-on-year, hit by a one-off tax, higher provisions and weaker loan growth as the recession deepened.
Alpha reported net earnings of 38.2 mln euros, above market expectations. Analysts in a Reuters poll were forecasting net profit at 22.8 mln euros for the first half. The bank booked a 61.9-mln-euro one-off tax on 2009 earnings, imposed by the government to shore up public finances.
"Despite a tough operating environment we delivered another solid quarterly operating performance from our core banking activities," Alpha's CEO Dimitris Mantzounis said in a statement.
"Our culture of capital preservation, as evidenced by the CEBS stress test results and our defensive loan book, gives us confidence that we could survive even more adverse conditions and provides the platform for building on our financial performance in the future," he said.
Greek banks have underperformed European peers since the start of the year, shedding 37.6%, as an austerity-induced economic downturn weakened demand for credit and led to a rise in non-performing loans.
The country's debt crisis, which sparked contagion fears and roiled the euro, has hurt banks through higher funding costs and trading losses tied to their government bond holdings.
Alpha grew net interest income by 9% to 917 mln euros in the first six months, with loan repricing more than offsetting the higher cost of deposits as a result of the country's sovereign debt crisis. Its net interest margin improved by 30 basis points to 2.7% year-on-year.
Loans grew by a weak 2% to 53.3 bln euros. Alpha said volumes expanded by 2.6% in Greece and by 3.7% in southeastern Europe. It has operations in Romania, Bulgaria, Serbia, Albania and Cyprus.
Loan-loss provisions rose 29% to 421.3 mln euros. The bank's non-performing loans (NPLs) ratio increased by 60 basis points in the second quarter to 6.9% of the loan book. Deposits declined by 7.4% to 39.7 bln euros.
Alpha said it expanded its stock of ECB eleigible assets by 2.0 bln euros in the second quarter, bringing its funding from the European Central Bank to 14.5 bln euros.