Greek shipping lender Alpha Bank is lining up more big disposals of bad loans as impairments rose in 2018.
The bank said provisions for loans hit EUR 1.61bn ($1.8bn) last year, from EUR 1bn in 2017.
The figure was affected by additional impairments in the final three months in relation to an expanded target for non-performing exposure (NPE) sales this year.
This implied a cost of risk of 296 basis points (bps) for 2018, versus 172 bps in 2017.
Alpha said it had made continued progress on asset quality, with NPE down by EUR 3.1bn and non-performing loans (NPL) cut by EUR 2.1bn in Greece.
Three transactions of NPE loan disposals totalling EUR 3bn were completed in 2018.
Interest income declined to EUR 1.75bn from EUR 1.94bn, but net earnings were up at EUR 53m, versus EUR 21.1m, due to a tax gain.
The gain arose mainly from the redefinition of the bank’s tax base of loan impairments, resulting in additional deferred tax assets recognition.
"For the next 12 months, Alpha Bank is accelerating the clean-up of its balance sheet by upsizing its designated transactions perimeter to circa EUR 4.6bn," it said.
This will include the disposal of three NPL portfolios, including one of small and medium sized Greek businesses.
Successful restructuring
CEO Vassilios Psaltis added: "We report a positive performance for 2018 which coincides with the successful conclusion of the bank’s restructuring plan, thus allowing us to regain our commercial flexibility.
"Now, our priority is to take the next steps in accelerating our NPE workout, ensuring our preferred bank status in target segments and right-sizing our platform to deliver competitive services."
It is targeting a EUR 10.7bn reduction in NPL and a EUR 14.3bn cut in NPE by 2021.
"Furthermore, we are embarking on a strategy formulation process that would lead to our commitment to fresh financial targets as our transformation programme will unfold,” Psaltis said.
In the fourth quarter, new lending hit EUR 1bn, mainly in the transport, tourism and manufacturing sectors.
The NPE book in Greece contracted by EUR 0.5bn in the final three months, on the back of improving restructuring trends as well as liquidations, bringing the total stock down to EUR 21.9bn.
Risk-weighted assets amounted to EUR 47.6bn, down 1.1%.
