Log in
A+ A A-

Alpha Bank post Q1 losses

Greece's fourth-largest lender Alpha Bank posted a loss for the first quarter, broadly in line with analysts' estimates, as provisions for bad loans offset a rise in net interest income.

Alpha, 69.9 percent owned by the Greek bank bailout fund, reported a loss of 94.1 million euros ($128 million). Analysts polled by Reuters had forecast on average a loss of 107.6 million euros.

Greek banks have been struggling with rising loan impairments during a deep recession, which has driven unemployment to almost 27 percent.

Record joblessness has made it hard for borrowers to service their debt, forcing lenders to provision for losses, even while the pace of new bad debt formation is slowing, Reuters reports.

Greece's economy shrank at annual 1.1 percent pace in the first quarter, but the government and its international lenders expect it to pull out from recession and expand by 0.6 percent this year.

Alpha said provisions for non-performing loans (NPLs), those in arrears for more than 90 days, fell 22 percent year-on-year in the first quarter to 395 million euros. The latest provisions added to previous NPLs to push the total to 33.3 percent of its book from 32.7 percent at the end of 2013.

The bank said net interest income rose 44 percent year-on-year to 471.3 million, helped by the lower cost of time deposits and of its wholesale funding.

"For the rest of 2014, we are looking forward to working towards a good result in the ECB's stress test, enhancing our remedial NPL management initiatives and re-leveraging our balance sheet," Chief Executive Dimitris Mantzounis said in a statement.

The European Central Bank is due to carry out European-wide stress tests later this year.

The bank said its board chairman, Yannis Costopoulos, will step down and be replaced by economist Vassilis Rapanos, who formerly served as chairman at peer National Bank.

Alpha said it repaid 1.5 billion euros in ECB funding in the first quarter, leaving its total at 15.7 billion, or 18 percent of its assets, as the deleveraging of its loan portfolio and a recent capital boost more than offset a drop in deposits.