Alpha Bank (ALPHA) Q1 2025 earnings summary

Executive summary

• Q1 2025 normalized profit after tax reached €239 million, up 8% year-over-year, with reported profit at €223 million (+5% y/y), marking the highest quarterly profit since 2007 and EPS at €0.09 (normalized).

• Return on tangible equity was 15.4% (normalized), with strong fee growth, robust operating performance, and continued growth in loans and customer funds.

• Performing loans grew 13% year-over-year, customer funds rose 8% year-over-year, and tangible book value increased 11% year-over-year.

• NPE ratio improved to 3.8% with a 50% coverage ratio and cost of risk at 53bps, reflecting benign asset quality.

• Fully loaded CET1 ratio stood at 16.3% (16.9% pro-forma), with a dividend accrual of €111 million for the quarter and a minimum 50% payout policy.

Financial highlights

• Net interest income for Q1 was €395 million, down 6% year-over-year, mainly impacted by lower rates and a €9 million negative calendar effect.

• Net fee and commission income rose 11% year-over-year to €108 million, with mutual funds and asset management driving growth.

• Operating income increased 1% year-over-year to €559 million; total operating expenses were flat year-over-year at €204 million.

• Pre-provision income was €355 million (+1% y/y); impairment losses fell 24% year-over-year to €52 million.

• Net loans reached €39.4 billion (+8.5% y/y); deposits at €50.4 billion (+6.6% y/y); tangible equity at €7.2 billion (+9% y/y).

Outlook and guidance

• Upgraded 2027 EPS guidance to over €0.45 (+7%), with RoTE expected to reach ~13% and annual earnings growth of 11% beyond 2025.

• EPS is projected to grow 8% per annum over the planning period, with ordinary payout at 50% from 2025.

• NII guidance for 2025 is at least €1.65 billion, and for 2026 at least €1.7 billion, with confidence in achieving these targets despite lower rate expectations.

• Cost guidance for 2025 remains at €870 million, with expected increases in staff and IT investments in coming quarters.

• CET1 ratio expected above 16% and NPE ratio to decline to 3.5% organically by year-end, mainly due to loan growth.