Alpha Bank (ALPHA) Q3 2024 earnings summary

Executive summary

• Normalized profit after tax for 9M 2024 rose 16.5% year-over-year to €666 million, with reported profit after tax at €489 million, supported by resilient net interest income and strong fee growth.

• Return on tangible equity reached 14.4% and normalized EPS was €0.27, with upgraded guidance to €0.34 for 2024.

• Fully loaded CET1 ratio improved to 15.5% (17.1% pro-forma), supporting higher payout accruals.

• Achieved 2026 NPE targets and capital/MREL goals ahead of schedule, with strong loan and customer fund growth.

• Strategic partnership with UniCredit enhances franchise, especially in wealth, bancassurance, and wholesale banking.

Financial highlights

• Q3 2024 normalized profit after tax was €229 million, up 7% sequentially; reported profit after tax was €167 million, impacted by non-recurring items.

• Net interest income grew 2% year-over-year to €1,243 million; fee and commission income up 11% to €306 million.

• Operating income increased 6% year-over-year; operating expenses flat, with cost/income ratio at 38.6%.

• Performing loans up 3% in the quarter and 8% year-over-year; customer funds up 3% in the quarter and 10% year-over-year.

• Tangible book value rose 9% year-over-year to €6.8 billion.

Outlook and guidance

• Upgraded 2024 guidance: total revenues expected at ~€2.2 billion, cost/income ratio below 39%, cost of risk ~65bps, ROTE above 14%, and normalized EPS ~€0.34.

• Loan growth target for 2024 increased to €2 billion, with a strong pipeline of investment projects.

• Fully loaded CET1 ratio expected above 16% for year-end 2024.

• Net interest income in 2025 expected to be at least flat versus 2024, despite lower rates.

• Payout accrual for FY2024 set at 35%, with >30% of market cap targeted as dividends over 2024-2026.