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Reported Profits (Q2): EUR316 million.
Normalized Profits (Q2): EUR275 million.
First Half Normalized Profit Growth: Up 6.5% year-over-year.
Net Interest Income Growth: Up 7.3% year-over-year.
Fee Growth: Up 34% on a headline basis, or 24% excluding PRODEA dividends.
Cost-to-Income Ratio: 39% for the first half; 38% for the second quarter.
Cost of Risk: 42 basis points for the first half; 39 basis points in Q2.
Performing Loan Growth: Up 5% in the quarter, with EUR1.6 billion in net credit expansion.
Customer Funds: Jumped 7% in the quarter.
Net Credit Expansion Target: Reached 87% of the year's target in the first half.
EPS Guidance Upgrade: Raised to EUR0.41.
Distribution Accrual: EUR273 million accrued for distribution so far this year.
Interim Dividend: Circa EUR124 million to be distributed in Q4.
Transaction Banking Revenue: Increased 38%.
AXIA Transactions: Advised on 17 transactions with a cumulative value exceeding EUR10 billion.
Full-Year Reported Profit Guidance: Reiterated at EUR950 million.
Impairment Losses (Q2): EUR44 million.
Tangible Book Value Growth: Up more than 2% in the quarter, and almost 7.5% year-on-year when adjusting for distributions.
CET1 Ratio: 14.3% on a transitional basis.
Underlying Cost of Risk (Q2): 26 basis points.
Organic Capital Generation (First Half): 71 basis points.
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For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Normalized profits up 6.5% year-over-year in H1 2026, with EPS guidance upgraded to EUR0.41.
Strong loan growth with performing loans up 5% in Q2, reaching 87% of the full-year net credit expansion target.
Fees surged 34% on a headline basis, driven by a 38% increase in transaction banking revenue and strong investment banking activity via AXIA.
Cost-to-income ratio improved to 38% in Q2, better than the full-year guidance, reflecting operating leverage.
The UniCredit partnership is delivering tangible benefits, including cross-border transactions and the EuropeanGate platform, enhancing client offerings and fee generation.
Reported profits were impacted by notable items, including a EUR38 million legacy cash flow hedge cost and EUR17.5 million provisions for a voluntary separation scheme in Cyprus.
CET1 ratio declined to 14.3% due to RWA growth, the Alpha Trust acquisition, and DTA recognition, with further headwinds expected from real estate investments.
Costs increased 14% year-over-year, partly due to acquisitions, though the company maintains its full-year cost guidance.
The bank faces potential additional one-off costs from government programs, such as the Marietta Giannakou program, expected in Q3.
Deposit inflows were partly driven by a large single corporate ticket, which may flow out in coming quarters as it converts to CapEx, potentially impacting liquidity.
Q: What are the key drivers behind the upgraded EPS guidance to EUR0.41, and how should we view the reported profit guidance of EUR950 million for the full year?A: CEO Vassilios Psaltis and CFO Vasilis Kosmas explained that the upgrade is driven by stronger-than-expected underlying commercial trends, including robust loan growth and fee income. While the reported profit guidance of EUR950 million remains unchanged, the bank expects normalized profits to land higher. The first half was burdened by one-off items such as the partial recognition of a legacy cash flow hedge (EUR38 million net) and provisions for a voluntary separation scheme in Cyprus (EUR17.5 million), but these were offset by better organic performance and a EUR120 million deferred tax asset (DTA) recognition. The bank has already delivered more than half of its 2026 net profit target.
Q: Can you elaborate on the CET1 capital evolution, the building blocks to the end of the year, and the target landing point?A: CFO Vasilis Kosmas noted that the bank generated approximately 70 basis points of organic capital in the first half, a trend expected to continue. The CET1 ratio stands at 14.3%, down from Q1 due to RWA growth from loan expansion and real estate investments, the Alpha Trust acquisition (15 bps), closure of a synthetic securitization (10 bps), P&L one-offs (12 bps), and employee share buyback accruals (10 bps). The bank aims to grow its real estate portfolio to around EUR1 billion, which will continue to drive RWA growth, but the portfolio yields over 25% on employed capital. CEO Vassilios Psaltis reiterated that the bank's capital allocation priorities remain unchanged: funding profitable loan growth, growing shareholder distributions, and maintaining strategic flexibility for value-accretive M&A.
Q: What are the updated expectations for Net Interest Income (NII) and fees, given the strong volumes in H1 and the pipeline for H2?A: CFO Vasilis Kosmas stated that NII is expected to land around EUR40 million higher for the year, driven by rates and volumes. The bank's rate sensitivity is circa EUR20 million per 25 basis points, and loan growth is a primary driver. On fees, the upside is broad-based, coming from transaction banking, investment banking with increased capital markets activity, and mutual funds. The bank has already achieved 90% of its net credit expansion target for the year and three-quarters of its net sales target for AUMs.
Q: How is the holistic approach to client coverage, combining lending with transaction banking, investment banking, and advisory, driving tangible P&L benefits?A: CEO Vassilios Psaltis emphasized that the benefits are already flowing in, not just potential. Alpha Bank has consistently held a market share of around 24-26% in business lending. By expanding into transaction banking, trade finance, treasury, and capital markets, the bank is generating more revenue per unit of risk-weighted assets. The integration of AXIA and the UniCredit partnership have been key enablers. The new head of wholesale, Iossif Kiouroukoglou, brings experience from a larger bank in implementing this unified coverage model. Quantification of the full impact is expected at the Investor Day in November.
Q: What is the outlook for deposit mix, spreads, and pricing in the second half of the year?A: CFO Vasilis Kosmas indicated that deposit pricing has been slightly better than expected. The bank is running a pass-through of 60% on euro deposits, which is expected to remain stable. The split between time deposits and core deposits is expected to remain at a stable three-quarters to one-quarter ratio. The bank does not foresee significant pressure on deposit spreads for the rest of the year.
Q: Regarding the EUR120 million DTA write-up this quarter, when do you expect to use them and turn them into capital?A: CFO Vasilis Kosmas explained that DTAs are written back into capital as the capital base grows. The EUR120 million recognized this quarter will be slowly converted into capital over time, with approximately EUR30 million or slightly more being converted each quarter. This is a gradual process tied to the bank's overall capital generation.
Q: Can you elaborate on the notable items in Q2 and whether any have a recurring earnings impact?A: CFO Vasilis Kosmas detailed the notable items: a EUR120 million DTA recognition (not capital accretive), a EUR38 million net cost from partial recognition of a legacy cash flow hedge, EUR17.5 million in provisions for a voluntary separation scheme in Cyprus (related to the AstroBank acquisition), and negative effects from legacy items related to the Katseli Law perimeter of mortgages. These are largely one-off in nature. The bank expects more voluntary contributions to government programs in Q3, particularly the Marietta Giannakou program, but these should not materially change the full-year bottom line.
Q: Costs increased 14% year-over-year in H1. Should we expect the run rate to moderate, and are you comfortable with the full-year guidance?A: CFO Vasilis Kosmas clarified that the 14% increase is inflated by the inclusion of AstroBank and AXIA, which were not in the prior-year numbers. On a like-for-like basis, cost growth is closer to 8%, in line with peers. The bank remains fully committed to its full-year cost guidance of EUR960 million.
Q: What is driving the strong loan growth, and is it dependent on subsidized RRF funding?A: CFO Vasilis Kosmas highlighted that performing loans grew 5% in the quarter, with EUR1.6 billion in net credit expansion. The contribution of the RRF envelope to disbursements was low single-digit in percentage terms, indicating that loan demand is real and not contingent on subsidized funding. The RRF envelope has created a good pipeline of underwritten projects, and net credit expansion in the coming quarters should exceed EUR1 billion.
Q: How is the UniCredit partnership contributing to the business, and what are the key areas of collaboration?A: CEO Vassilios Psaltis detailed that the partnership has moved beyond the establishment phase and is delivering benefits across lending, transaction banking, trade finance, treasury products, cross-border lending, and investment banking. Key initiatives include the launch of EuropeanGate for seamless transaction banking in UniCredit markets, over EUR100 million in guarantees and letters of credit exchanged in H1,
For the complete transcript of the earnings call, please refer to the full earnings call transcript.