Alpha Bank (ALPHA) Q2 2024 earnings summary

Executive summary

• Recurring earnings reached €437 million in H1 2024, with a 13.6% return on tangible equity and €0.18 EPS, reflecting strong top-line resilience and fee income growth.

• Achieved investment-grade status after 14 years, resumed shareholder distributions, and regulatory approval for first dividend since 2007.

• Strategic progress includes the finalized UniCredit deal in Romania, leadership in mutual funds and wholesale banking, and digital innovation focus.

• Upgraded 2024 guidance: total revenues expected above €2.1bn, cost/income ratio below 40%, cost of risk under 70bps, and ROTE above 13.5%.

• Accelerated NPE deleveraging reduced NPE ratio to 4.7%, with partnership with UniCredit advancing joint ventures and new product offerings.

Financial highlights

• Normalized H1 profit of €437 million, up 23% year-on-year; Q2 normalized profit at €214 million.

• Net interest income for H1 2024 was €829mn, up 6% year-over-year; net fee and commission income reached €197mn, up 14% year-over-year.

• Tangible book value grew 11% year-on-year to €6.7bn; regulatory capital up 10% over last year.

• Cost of risk at 64 bps in H1, lowest since the crisis; NPE ratio at 4.7% with 47% coverage.

• Cost/income ratio improved to 36% in Q2 2024, with recurring operating expenses down 1% year-over-year.

Outlook and guidance

• 2024 net interest income now expected to be only marginally down vs. 2023, better than prior 5% decline guidance.

• Fee income expected above €400 million for 2024, driven by AUM and mutual fund market share gains.

• Upgraded full-year EPS guidance to approximately €0.33, reflecting improved recurring profitability.

• CET1 ratio target maintained at 16% for year-end, with 35% of 2024 profits accrued for dividends.

• Cost of risk guided below 70 bps for 2024; NPE ratio expected at ~4.5% by year-end.