* NBG profits seen down 64%
Alpha Bank, Greece's third-largest lender, on Tuesday reported a sharp drop in 2010 earnings, hurt by higher bad debt provisions and weak loan growth as the country's recession deepened.
Alpha's net profit fell 75.5% to 85.6 mln euros, in line with market expectations, after a 61.8 mln euro one-off tax.
A squeeze in deposit spreads, weaker loan volumes and higher provisions made it tougher for Greek banks to make money last year. The country's debt crisis also hurt their bond portfolios.
"In a very testing year, we deleveraged our balance sheet to strengthen our liquidity and capital position, realigned our cost base and preserved our asset quality," Alpha Bank's Chief Executive Dimitris Mantzounis said in a statement.
"Going forward we will strengthen further our delivery on these key priorities," he said.
Alpha — which also operates in Cyprus, Romania, Bulgaria and Serbia — said net interest income grew 3.2% to 1.819 bln euros.
CFO Vassilis Psaltis told Reuters the group had no plans to raise capital and could stick with its business model with a core Tier 1 ratio of 9%.
Chief Economist Michael Massourakis said non-performing loans are expected to peak in the first quarter of 2012.
The bank, which last month rejected an all-share offer by National Bank to merge, said loan-loss provisions rose 31% to 885 mln euros with the economic downturn driving non-performing credit to 8.5% of the loan book.
Alpha Bank has had no contacts with larger rival NBG on a merger after talks collapsed last month, its chief operating officer said on Tuesday.
"On the NBG merger issue, we had the discussions that we had, we did not agree and that's the end of the story," COO Spyros Filaretos told analysts in a conference call.
"There were no contacts since talks collapsed," Filaretos said, adding that the bank wants to stay independent.
"I want to reiterate our commitment to be a very strong and independent bank," Filaretos told analysts in a conference call.
NBG net profit seen at 328.7 mln
Meanwhile, National Bank, Greece's biggest lender, is expected to report a 64% drop in full-year 2010 net profits later Wednesday, as a deep recession at home curbed loan growth and led to higher provisions for bad debts.
Nine analysts polled by Reuters on average see NBG reporting net earnings of 328.7 mln euros, down 64% from 923 mln in 2009. Forecasts ranged from 289.5 to 377 mln euros.
A severe economic downturn in Greece, induced by austerity policies to tackle a debt crisis, put the brakes on loan growth and led to a rise in impaired credit.
Greek lenders also suffered deposit outflows last year, becoming dependent on the European Central Bank for liquidity as access to interbank funding remained mostly shut on sovereign debt concerns.
Alpha Bank, the country's third-largest lender, rejected last month an all-share merger offer from National.
NBG is expected to report a 28% increase in provisions to 1.35 bln euros.
National Bank, which also operates in Bulgaria, Cyprus, Romania, Serbia and Turkey, is expected to report a 4.3% rise in net interest income in the full year to 4.13 bln euros.
The bank's shares are up 13% this year, in line with the broader Greek marke. The stock trades about 14.2 times estimated 2011 earnings, versus a P/E ratio of 14.8 for its European peers.
