Revenue of 2.3 billion by 2025, dividends from 2024, goals of Alfa-Bank

Revenue growth to 2.3 billion euros by 2025, credit expansion of 7% per annum, capital accumulation of 2.3 billion euros and a provision to pay dividends to shareholders from 2023 profits, the company’s business plan provides. Alfa Bank for the three years 2023-2025, which yesterday was presented by the group’s management to international investors.

“We will use the growth potential of our banking operations in Greece and beyond to increase our revenues by 5% per year and our loans by almost 25% until 2025,” said Alpha Bank Group CEO. Vasilis Psaltiswith the aim of organically creating capital of more than 2.3 billion euros and constantly striving to increase shareholder value.

The forecasts, according to Alfa-Bank management, are based on the possibility of the Greek economy entering a sustainable growth trajectory, with GDP growth at a rate of about 3% per year until 2025, a reduction in unemployment by 2 percentage points and an increase in available income by 4% per year . In the medium term, growth is expected to be supported by increased inflows of foreign direct investment as a result of increased competitiveness, combined with growth dynamics driven by the inflow of resources from the EU Structural Funds. as well as from reaching investment grade, which, in the opinion of Alfa-Bank’s management, “will signal a return to normal life.”

The new strategic plan follows the success of the bank’s transformation program, which in the period 2019-2022 led to the consolidation of its balance sheet and the effective management of NPLs. During this time, the bank, according to management, “modernized its business model, reaffirmed its leadership in value-added customer segments, and restructured to become leaner and more digitally focused across all of its operations and services. it offers.”

The business plan also includes a credit expansion of 7% per year and capital accumulation of 2.3 billion euros.

The development model provides for €1.9bn of organic capital creation and the conversion of €400m of deferred tax assets (total €2.3bn) to be used to fund the group’s business plans while paving the way for dividends and distributions 30 basis points of the average annual value of risk-weighted assets (RWA).

The key pillars of the development strategy will be the business lending sector (wholesale banking services), the further strengthening of the asset management sector (AUM) and the international activities of the group in Romania and Cyprus. In particular, the wholesale banking strategy aims to strengthen the bank’s leading position in business finance with new disbursements of around 14 billion euros, as well as to strengthen the solutions and services offered to businesses, with the goal of increasing fee income by around 25%. The wholesale banking sector provides more than 30% of the group’s annual income and almost 50% of regular profits, serving more than 5,000 groups of large, small and medium-sized enterprises, with a portfolio of non-performing loans exceeding 17 billion euros, covering all the most important sectors of the Greek economy. The goal, according to management, is “to continue the cumulative net lending expansion of approximately €5 billion by 2025, increasing total revenue by 13%, while maintaining the bank’s high and strong profitability.” For retail banking, the financing targets include a €130m increase in core income over the next three years, a €3.5bn increase in deposits and €1.4bn in new loans.

Assets under management (AuM) in the country have been growing by 10% annually since 2019 and the bank expects Greek AuM to grow by 15-20% by 2025, with €40m in revenue growth and an increase in remaining asset management of 4.8 billion euros.

With regard to the group’s activities abroad, the international network with assets of 7.6 billion euros provides 10% of the group’s total assets and 12% of revenue. The strategic plan provides for an increase in the loan portfolio by 37% by 2025, or an increase in the loan portfolio by 1.6 billion euros and an increase in total revenue by 52%. At the same time, the bank aims to achieve a return on equity of more than 12% over the same period, an increase in the FL CET1 capital ratio to 16% in 2025, and improved efficiency through lower cost-to-revenue ratios approaching 40% in 2025.

Author: Evgenia George

Source: Kathimerini

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