ALPHA SERVICES AND HOLDINGS S.A. Q4 2023 Results
Q4 2023 Results Press Release
Key Financial metrics | FY 2023 | Q4 | |
Reported profit after income tax | €611.3mn | €120.7mn | |
Normalized1 | profit after tax | €780.4mn | €215.8mn |
Normalized1 | Return on tangible book value (RoTBV) | 12.9% | 14.3% |
Fully-loaded Common Equity Tier 1(CET1%) | 14.3% | 14.3% | |
Tangible Book Value per Share | €2.74 | €2.74 |
Key takeaways
- 2023 Normalised ROTBV2 at 12.9%, EPS2 at €0.32, +237bp in FL CET1% y/y.
- Net credit expansion of €1.1bn in Q4 with €2.8bn record high disbursements, driving 2023 growth to 5% on a like-for-like basis.
- Customer deposits +3% y/y and flat q/q on a like-for-like basis; AuMs +€0.8bn q/q or +37.2% y/y. Time deposits at 25% of domestic deposit base, stable q/q, with deposit beta evolving slower than expected.
- NPE ratio at 6%, down 180bps y/y, reflecting robust curing activity and benign asset quality flows alongside the reclassification to HFS of Project "Gaia", whereas pro forma for the reclassification of our Romanian operations, the NPE ratio stood at 5.8%. Underlying CoR in line with guidance, cash coverage pick-up continued.
- Strong capital generation with FL CET1 and Total Capital ratios rising y/y by +237bps and +376bps, respectively. The reported CET1 ratio of 14.3% includes a dividend accrual of 38bps for the entire year of 2023, subject to regulatory approval. Pro forma for remaining RWA relief FL CET1 stands at 15.9%3 and Total Capital ratio at 20.7%3. FL CET1 up 60bps q/q with 27bps of organic capital generation, 34bps positive impact from transactions and 8bps of dividend accrual.
Summary trends
- Net Interest Income up +41% y/y and +1% q/q on higher rates and increased contribution from securities.
- Fees & Commission income up +8.1% y/y excluding Merchant acquiring, driven by cards and payments alongside growth in Asset Management and Bancassurance. Q4 down -1.6% q/q to €99.2mn, on seasonally lower cards and payments activity, partly offset by business credit related fees on the back of robust loan origination.
- Recurring OPEX -4.6% better y/y at €817.5mn, mainly reflecting lower Single Resolution fund (SRF) contributions; -5.9% q/q. C/I down by c.15pp vs 2022 at 39.5%.
- FY 2023 Core PPI up +74.6%, driven by strong Core Banking Income increase (+31.5% y/y). Core PPI up by +3.6% q/q, on higher top line and improved operational efficiency.
- For 2023, underlying CoR came inline with guidance, highlighting relatively benign asset quality flows. Cost of Risk at 96bps in Q4, reflecting Management actions and cost of synthetic securitization.
- Normalised Profit After Tax of €215.8mn in Q4 2023, is Reported Profit /(Loss) After Tax of €120.7mn excluding (a) non recurring Operating Expenses of €5mn, (b) NPA transactions impact of €109mn, (c) €22mn on other adjustments and tax charge related to the above.
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Q4 2023 Results Press Release
As a Bank, and as a nation, we have turned a corner and made an emphatic pivot
to growth
"2023 was a year of robust delivery for Alpha Bank as we successfully met each one of our targets. Thanks to our relentless focus on execution, we have made substantial progress against the strategic pillars laid out in our Investor Day last year and even exceeded guidance around profitability, capital and the NPE ratio.
In 2023, Net Interest Income grew significantly, as we benefitted from positive dynamics in the interest rate environment and a strong contribution from our securities portfolio. New disbursements reached a record high of €2.8 billion in Q4, leading to an annual 5% growth for our performing loan book.
We once again delivered a meaningful 200bp reduction in our NPE ratio, further normalizing asset quality, whilst our prudent approach to capital management has resulted in our CET-1 ratio rising to 15.9% when accounting for the upcoming transactions we have agreed.
The decisive actions we have taken in 2023 have accelerated and de-risked key elements of our strategic plan, with the roll out of our new service model in Retail, an expanded offering in Wealth and higher product penetration in Wholesale. Our strategic partnership with UniCredit has unlocked the profitability potential of our International business whilst creating upside potential for the rest of the Group.
While the geopolitical environment remains uncertain, the outlook for Greece is undeniably positive. The Greek economy grew at a significantly faster rate than the Eurozone average in 2023 as GDP increased by 2%, and we see this trend continuing through to 2025. The return of Greece to investment grade status last year underscored the remarkable turnaround in investor confidence in the Greek economy. We have witnessed this transformation firsthand through the landmark transaction and strategic partnership we agreed with UniCredit in October 2023, marking the first investment by a large European bank into the Greek banking system since the financial crisis.
As a Bank, and as a nation, we have turned a corner and made an emphatic pivot to growth. Over the past 12 months we have improved profitability while maintaining cost discipline, securing a stronger balance sheet and enabling healthy capital generation. We have achieved this through a resolute focus on delivering sustainable value for our shareholders, and we are proud to have enabled the proposed resumption of dividend payments from the profits accrued in this financial year."
Vassilios Psaltis, CEO
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Q4 2023 Results Press Release
Key Financial Data
P&L | Group (€mn)
Net Interest Income
Net fee & commission income
Core banking income
Income from financial operations
Other income
Operating Income
Core Operating Income
Staff Costs
General Administrative Expenses3
Depreciation & Amortization
Recurring Operating Expenses
Excluded items4
Total Operating Expenses
Core Pre-Provision Income
Pre-Provision Income
Impairment Losses on loans
Other items5
Profit/ (Loss) Before Income Tax
Income Tax
Profit/ (Loss) after income tax
Impact from NPA transactions6 discontinued operations and other adjustments
Profit/ (Loss) After Income Tax
Normalised7 Profit After Tax
Balance Sheet | Group
Total Assets
Net Loans
Securities
Deposits
Shareholders' Equity
Tangible Book Value
Key Ratios | Group
Profitability
Net Interest Margin (NIM)
Cost to Income Ratio (Recurring) Capital
FL CET1
FL Total Capital Ratio Liquidity
Loan to Deposit Ratio (LDR)
LCR
Asset Quality Non-Performing Loans (NPLs) Non-Performing Exposures (NPEs) NPL ratio (%)
NPE ratio (%)
FY 2023 | FY 2022 | YoY (%) | Q4 2023 | Q3 2023 | QoQ (%) |
1,653.5 | 1,173.8 | 40.9% | 438.7 | 434.7 | 0.9% |
372.5 | 367.1 | 1.5% | 99.2 | 100.9 | (1.6%) |
2,025.9 | 1,540.9 | 31.5% | 537.9 | 535.6 | 0.4% |
39.5 | 189.9 | (79.2%) | 20.6 | (13.0) | … |
43.2 | 33.4 | 29.5% | 9.7 | 12.0 | (18.8%) |
2,108.6 | 1,764.1 | 19.5% | 568.2 | 534.5 | 6.3% |
2,069.1 | 1,574.3 | 31.4% | 547.6 | 547.5 | 0.0% |
(333.3) | (328.2) | 1.6% | (83.7) | (85.0) | (1.5%) |
(326.7) | (386.4) | (15.4%) | (68.9) | (80.9) | (14.8%) |
(157.4) | (142.7) | 10.3% | (41.8) | (40.7) | 2.8% |
(817.5) | (857.2) | (4.6%) | (194.5) | (206.6) | (5.9%) |
0.4 | 0.5 | (28.5%) | 5.4 | 0.0 | … |
(817.1) | (856.7) | (4.6%) | (189.1) | (206.6) | (8.5%) |
1,251.7 | 717.0 | 74.6% | 353.1 | 340.9 | 3.6% |
1,291.6 | 907.4 | 42.3% | 379.1 | 327.9 | 15.6% |
(308.3) | (291.4) | 5.8% | (90.0) | (72.8) | 23.6% |
(6.7) | 15.5 | … | (13.5) | 9.9 | … |
976.5 | 631.5 | 54.6% | 275.6 | 264.9 | 4.0% |
(279.0) | (206.7) | 35.0% | (79.4) | (74.5) | 6.6% |
697.5 | 424.9 | 64.2% | 196.2 | 190.4 | 3.0% |
(86.2) | (56.5) | 52.7% | (75.5) | (2.3) | … |
611.3 | 368.4 | 65.9% | 120.7 | 188.1 | (35.8%) |
780.4 | 398.4 | 95.9% | 215.8 | 208.1 | 3.7% |
31.12.2023 | 30.09.2023 | 30.06.2023 | 31.03.2023 | 31.12.2022 | YoY (%) |
73,663 | 74,392 | 72,921 | 73,704 | 78,011 | (5.6%) |
36,161 | 38,799 | 38,681 | 38,230 | 38,748 | (6.7%) |
16,052 | 16,196 | 15,502 | 14,651 | 13,474 | 19.1% |
48,449 | 52,331 | 51,795 | 50,229 | 50,761 | (4.6%) |
6,905 | 6,739 | 6,577 | 6,372 | 6,245 | 10.6% |
6,438 | 6,240 | 6,073 | 5,859 | 5,770 | 11.6% |
FY 2023 | 9M 2023 | H1 2023 | Q1 2023 | FY 2022 | |
2.2% | 2.1% | 2.1% | 2.0% | 1.6% | |
39.5% | 40.9% | 42.7% | 43.3% | 54.5% | |
14.3% | 13.7% | 13.4% | 12.3% | 11.9% | |
18.6% | 18.0% | 17.7% | 16.4% | 14.9% | |
75% | 74% | 75% | 76% | 76% | |
191% | 188% | 183% | 163% | 161% | |
1,147 | 1,443 | 1,493 | 1,517 | 1,656 | |
2,240 | 2,865 | 3,009 | 2,980 | 3,116 | |
3.1% | 3.6% | 3.8% | 3.9% | 4.1% | |
6.0% | 7.2% | 7.6% | 7.6% | 7.8% |
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Q4 2023 Results Press Release
Business Update
The Greek economy sustained its growth premium in 2023, supported by an increase in investment, private and public consumption, employment gains and another record tourist season. The achievement of investment-grade status for the Greek sovereign confirmed the multifaceted progress made in recent years, marking an important milestone for the country and the banking sector and signaling its positive medium term prospects.
In 2023, the Bank has exceeded its guidance. An expanding top line on benign retail funding costs, growth in fees and a firm focus on cost efficiency have delivered solid earnings growth and higher levels of profitability. This has come alongside a strengthening of the balance sheet, substantial capital generation and maintenance of sector-leading capital ratios well above management targets, paving the way for the resumption of dividend distributions, subject to regulatory approval.
Our strategic initiatives, our franchise positioning and the active management of our balance sheet are expected to continue to yield improving results over the coming years. Earnings are expected to grow, with EPS exceeding €0.35 in 2026. Profitability is expected to expand to c.14%2 over the next three years. Our balance sheet will strengthen further with capital buffers expanding and asset quality converging with the EU average. Our resolve and ability to deliver shareholder value has strengthened.
Profitability
Top line benefitting from higher rates and increased contribution from securities; CoR at 96bps in Q4
- Net Interest Income up +1% q/q and +41% y/y on higher rates and increased contribution from securities.
- Fees and commissions income down 1.6% q/q on seasonally lower cards and payments activity. FY 2023 recurring fees up +8.1% y/y driven by cards and payments.
- Recurring operating expenses -5.9% better q/q and -4.6% y/y on lower deposit guarantee fund contributions. Underlying flat y/y in line with guidance.
- Cost of Risk at 96bps in Q4, reflecting Management actions and higher securitization balances. Full year Cost of Risk in line with guidance on relatively benign asset quality flows.
Net interest income | Net fee and commission income | |||||||||||
Group, € mn | Group, € mn | |||||||||||
NPE NII | Other NII | 91 | 91 | 101 | 99 | |||||||
435 | 439 | 82 | 0 | 0 | ||||||||
383 | 397 | 1 | 0 | |||||||||
35 | 34 | 0 | ||||||||||
351 | ||||||||||||
41 | 41 | |||||||||||
36 | ||||||||||||
101 | 99 | |||||||||||
90 | 82 | 91 | ||||||||||
399 | 405 | |||||||||||
356 | ||||||||||||
315 | 343 | |||||||||||
Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | ||||||||
Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | ||||||||
Merchant Acquiring | Other NCI | |||||||||||
Recurring operating expenses | Cost of risk | |||||||||||
Group, € mn | % over net loans | |||||||||||
0.87 | 0.96 | |||||||||||
226 | 0.77 | |||||||||||
206 | 211 | 207 | 194 | 0.74 | 0.75 | |||||||
Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 |
5
Core banking income effectively flat q/q (+0.4%)
NII decomposition
€ mn | ||||||||||
397 | 435 | 439 | ||||||||
383 | ||||||||||
351 | ||||||||||
473 | ||||||||||
374 | 419 | 457 | ||||||||
318 | ||||||||||
36 | 38 | 41 | 56 | 41 | 67 | 86 | 35 | 99 | 34 | |
(28) | (63) | (78) | (73) | (92) | ||||||
(13) | (25) | (52) | (70) | (76) | ||||||
Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | ||||||
Deposits | Loans NPE | Bonds | Loans PE | Funding & Other |
Q4 2023 Results Press Release
Net F&C Income decomposition
€ mn | 101 | 99 | ||||||
91 | 91 | |||||||
82 | 0 | 0 | ||||||
1 | 0 | |||||||
0 | 32 | 34 | ||||||
29 | 30 | |||||||
26 | 16 | 16 | ||||||
15 | 14 | |||||||
4 | 14 | 5 | 4 | 5 | 4 | |||
22 | 23 | 25 | 30 | 26 | ||||
19 | 17 | 17 | 19 | |||||
13 | ||||||||
Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | ||||
Merchant Acquiring | Bancassurance | |||||||
Business credit related | Cards & Payments | |||||||
Asset management | Other |
NII performance benefitting from rates and securities contribution
Net Interest Income rose by 1% q/q to €438.7mn, benefitting from higher rates, loan volumes and an increased contribution from securities, offsetting higher ECB funding costs and higher cost of deposits. Full year NII rose by +41% y/y on similar drivers and despite incremental wholesale funding costs on the back of MREL issuance.
Robust yearly performance of fee income (+8%) on stronger cards and payments activity
Fees and commissions income stood at €99.2mn, down -1.6% q/q, on seasonally lower cards and payments activity, partly offset by business credit related fees on the back of robust loan origination in Q4. In FY 2023, recurring fees excluding Merchant acquiring were up +8.1% y/y, driven by cards and payments alongside growth in Asset Management and Bancassurance.
Income from financial operations came in at €20.6mn in Q4, mainly attributed to the increased valuation of our investment securities portfolio and gains from FX differences, with the annual contribution at €39.5mn.
Other income stood at €9.7mn in Q4 2023 and €43.2m for the year.
Recurring OPEX down 5.9% q/q
Recurring operating expenses fell 5.9% q/q to €194.5mn mainly reflecting a write back related to the Single Resolution fund (SRF) contributions alongside lower staff costs, more than offsetting a higher depreciation charge relating to intangible assets. On an annual basis, recurring OPEX was down 4.6% at €817.5mn on the back of lower general expenses. Active cost management, capacity releases from the Bank's transformation and savings from renegotiations with key suppliers, property related and NPA management costs reduction have allowed the Bank to offset increased investments in HR and IT, as well as to fund growth in its International Operations.
Total Operating Expenses at €189.1mn decreased by 8.5% q/q, with 2023 down 4.6% y/y, both due to better Recurring expenses.
Cost of Risk at 96bps
The underlying loan impairment charge stood at €64.5mn in the quarter, versus €49.7 in Q3 on management actions. Servicing fees amounted to €12.4mn, essentially flat vs. €12.9mn in Q3, with securitization expenses at €12.2mn vs. €10.3mn on account of an increased balance of synthetic securitizations, adding 26bps to CET1 through €800mn RWA reductions.
Excluding the impact of transactions, the Cost of Risk in Q4 2023 stood at 96bps over net loans vs. 75bps in the previous quarter while, including the impact of transactions, it stood at 214bps, with 118bps related to NPE transactions vs. 5bps in Q3.
On a yearly basis, CoR was relatively stable at 81bps (+5bps y/y).
The total impact of NPA Transactions4 stood at €109.1mn in the quarter, out of which €83.2mn related to Project "Gaia", a €0.5bn mortgage NPA portfolio, that has been reclassified to Held For Sale in Q4.
Other impairment losses in Q4 2023 amounted to €0.6mn.
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Q4 2023 Results Press Release
Balance Sheet Highlights
New record high in disbursements of €2.8bn in Q4
Net credit expansion | Performing loan book expansion | |||||||||||||||||
Group, €bn | ||||||||||||||||||
+5% | +3% | |||||||||||||||||
Greece, €bn | 1.1 | (1%) | +1% | +1% | ||||||||||||||
32.9 | ||||||||||||||||||
0.2 | 0.1 | 0.1 | 0.1 | 31.4 | 31.1 | 31.5 | 31.8 | 3.2 | ||||||||||
0.1 | ||||||||||||||||||
0.1 | 4.1 | 4.2 | 4.3 | |||||||||||||||
0.1 | 0.1 | 4.2 | 1.3 | |||||||||||||||
2.7 | Disbursements | |||||||||||||||||
2.2 | 1.9 | 1.7 | ||||||||||||||||
1.6 | ||||||||||||||||||
7.6 | ||||||||||||||||||
7.6 | 7.6 | 7.6 | ||||||||||||||||
7.6 | ||||||||||||||||||
(0.2) | (0.2) | (0.2) | (0.2) | (0.2) | ||||||||||||||
(2.0) | (1.9) | (1.7) | (1.6) | (1.6) | Repayments | |||||||||||||
(0.4) | 19.7 | 19.3 | 19.8 | 19.9 | 20.8 | |||||||||||||
Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | ||||||||||||||
GR Businesses | GR Individuals | |||||||||||||||||
Dec-22 | Mar-23 | Jun-23 | Sep-23 | Dec-23 | ||||||||||||||
Romania | International | GR Individuals | GR Businesses |
New disbursements in Greece stood at €2.8bn in the quarter, allocated to key sectors including trade, tourism, utilities, transportation and manufacturing. Note that the gross loan figure includes €5.2bn of retained senior notes associated with the Galaxy and Cosmos NPE securitizations.
On a headline basis, mainly due to the reclassification of Alpha Bank Romania to HFS, the Group's performing loan book stood at €29.7bn (-7% q/q or €2.2bn and -6% on a yearly basis). The Group's performing loan book (excluding the Galaxy and Cosmos senior notes) grew by +3.4% q/q to €32.9bn (+4.8% y/y), reflecting the pickup of new loan originations in Greece from corporates and a stable pace in repayments, which has de-escalated in the second half.
Net credit expansion in Greece stood at €1.1bn in Q4 (+€0.9bn y/y), driven by a high level of disbursements in wholesale credit.
Liquidity further strengthened in the quarter, LCR at 191%; Domestic Time deposits mix stable q/q
Deposits evolution | Group LCR & LDR |
Group, € bn
ΥoΥ | QoQ | |||||
€(1.8)bn | 0.4 | €(0.2)bn | ||||
0.4 | ||||||
52.3 | ||||||
50.8 | (0.4) | (0.2) | ||||
52.5
3.5
183% | 188% | 191% | |
161% | 163% | ||
LDR | |||
LCR | |||
Romania |
International 5.7
6.2
3.1
76% | 76% | 75% | 74% | 75% |
45.0 46.1
Greece
45.9
Dec-22 | Mar-23 | Jun-23 | Sep-23 | Dec-23 |
Dec-22 | Sep-23 Individual Business | State International Dec-23 |
On a headline basis, the Group's deposit base decreased by €3.9 bn q/q (or by €2.3bn on a yearly basis) to €48.4bn, reflecting the reclassification to "Held for Sale" of Alpha Bank Romania and Alpha Life (-€4.1bn negative impact). The Group's deposit base remained effectively flat q/q at €52.5bn, up by 0.4% or €0.2bn.
The migration to time deposits remained slow, with time deposits excluding the state accounting for 25% of the domestic deposit base and stable vs. Q3. At a Group level, the percentage of time deposits decreased by 3p.p. as the discontinued businesses have a higher proportion of time deposits (c.72%) The cost of time deposits increased to 2.29%, including the impact of USD time deposits, vs. 2.19% in the previous quarter. As of the fourth quarter, the total stock of domestic deposits had a beta of 15%, stable q/q, with the euro deposit beta flat at 12%, reflecting the slow migration to time deposits and a higher Euribor rate.
Comfortable liquidity metrics
The Group's TLTRO funding stood at €5bn at the end of Q4, stable q/q. The Bank's blended funding cost stood at 140bps in the
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Q4 2023 Results Press Release
quarter, up from 128bps in Q3 2023, mainly attributable to the higher cost of deposits and wholesale funding.
The Group's strong liquidity profile is evidenced by the net Loan-to-Deposit ratio of 75%, while the Group's LCR increased to 191% vs. 188% in the previous quarter, far exceeding regulatory thresholds and management targets.
In February 2024, the Bank successfully completed a €400mn senior preferred issuance, further diversifying funding sources and building-up MREL capital stack. The issuance adds to the series of successful bond issues of €3.3bn issued by the Bank over the last three years.
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Q4 2023 Results Press Release
Asset Quality
Group NPE ratio at 6%, down 120bps q/q; Coverage increased to 45%
On an underlying basis, NPE formation in Greece was negative (-€0.1bn), as slightly higher inflows were more than offset by stronger curings and repayments. In Q4 2023, the NPE stock was reduced by €0.6bn q/q to €2.2bn, driven by the reclassification to HFS of NPE portfolios mainly related to the "Gaia" transaction totalling €0.5bn. As a result, the NPE ratio contracted to 6.0%, down by 120bps versus Q3, whereas, pro forma for the reclassification of our Romanian operations, the NPE ratio stood at 5.8%.
Quarterly NPE Formation
NPE | ||
formation (0.1) | (0.2) | 0.0 |
Greece, € bn
0.06
0.240.22
0.18
Cost of risk evolution
(0.1) | (0.1) | % over net loans | 0.96% | |||||
0.87% | ||||||||
0.77% | 0.75% | 0.13% | ||||||
0.16% | 0.74% | |||||||
0.14% | 0.13% | 0.13% | ||||||
Mainly single | ||||||||
case | ||||||||
0.23 Inflows | 0.65% | 0.58% | 0.53% | 0.51% | 0.70% | |||
0.17 | Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | |||
Servicing fees Securitization expenses Underlying
NPE and cash coverage %
(0.25) | (0.20) | (0.22) | (0.22) | (0.25) | Cures & | Group | 45% | |||||||
repayments | 41% | 40% | 40% | 41% | ||||||||||
(0.03) | (0.02) | |||||||||||||
(0.14) | ||||||||||||||
(0.06) | (0.07) | CPs | ||||||||||||
& write offs | ||||||||||||||
Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | 8% | 8% | 8% | 7% | 6% | |||||
Dec-22 | Mar-23 | Jun-23 | Sep-23 | Dec-23 | ||||||||||
Group NPE evolution | NPE coverage ratio | NPE Ratio | ||||||||||||
NPE ratio (Group) | 43% | 13% | 7.8% | 7.2% | 6.0% | |||||||||
NPL ratio (Group) | 30% | 6% | 4.1% | 3.6% | 3.1% |
Group NPEs, €bn
20.9
5.1 | |||||||||||
(15.7) | (0.1) | 3.1 | 2.9 | ||||||||
(1.6) | 2.2 | ||||||||||
(0.4) | (0.3) | ||||||||||
(0.5) | (0.1) | ||||||||||
Dec-20 | FY 21 | FY 21 | Dec-21 | FY 22 | FY 22 | Dec-22 | 9Μ 23 | Sep-23 | Q4 23 | Q4 23 | Dec-23 |
transactions | formation | transactions | formation | formation | transactions | formation |
(inc. Romania
HFS)
Group NPE Coverage increased to 45%
The Group's NPE cash coverage increased to 47% at the end of Q4, while total coverage including collateral reached 115%. Pro- forma for the reclassification of Alpha Bank Romania, the above ratios stand at 45% and 115% respectively.
The Group NPL coverage ratio reached 90%, while total coverage including collateral reached 150%, whereas pro forma for the reclassification of Romania, the aforementioned ratios stand at 87% and 156% respectively.
The coverage ratio reflects the underlying asset mix, with a high bias towards retail secured exposures and a large portion consisting of paying customers. Out of the €2.2bn stock of NPEs for the Group, the largest part are mortgages (43% of stock), with a significant portion of Forborne exposures less than 90dpd (45% stock or €1bn).
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Q4 2023 Results Press Release
Capital
Organic capital generation at 0.3% in Q4 and 2.2% in 2023; FLCET1 at 14.3%
Capital evolution (q/q)
Fully Loaded CET1
%
0.6% | 0.2% | 0.1% | 0.3% | 14.4% | 14.3% | 15.9% | ||||||||||||||||||||||||||
13.7% | ||||||||||||||||||||||||||||||||
(0.1%) | ||||||||||||||||||||||||||||||||
(0.5%) | ||||||||||||||||||||||||||||||||
0.3% Organic Capital Generation | ||||||||||||||||||||||||||||||||
Sep-23 | Q4 23 | DTA | DTC | RWAs | Other capital | Transactions | Dec-23 | Dec-23 post | Dec-23 | |||||||||||||||||||||||
organic PnL | elements | dividend accrual | pro-forma |
The Group's Fully Loaded CET 1 Capital base stood at €4.6bn, resulting in a Fully Loaded CET1 ratio of 14.4%, or 14.3% post dividend accrual (of 8bps), up by 68bps q/q. The move was primarily attributable to a 27bps positive contribution from organic capital generation and 34bps positive impact from transactions o/w c26bps attributable to a synthetic securitization completed in Q4 2023. The reported CET1 ratio includes a dividend accrual of 38bps for the entire year of 2023, to support a payout of c.20% on profits. Accounting for the remaining RWA relief stemming from the Bank's planned transactions, the Group's FL CET 1 Ratio stands higher at 15.9%3.
The respective Fully Loaded Total Capital Ratio stands higher at 18.6% in December 2023, or pro forma for remaining RWA relief FL Total Capital3 stands at 20.7%.
International operations
The international operations posted a normalised net profit of €30mn, down from €35mn in the previous quarter, following increased impairments in Q4 as well as a slight decrease in PAT from discontinued operations relating to the reclassification our Romanian subsidiary. Net interest income was effectively flat q/q, with net fee and commission income increasing by 8%. Recurring operating expenses decreased by 7% q/q mainly due to lower staff costs from our Cypriot subsidiary. Impairments amounted to €6mn for the quarter versus €3mn in the previous quarter. Net loans stood at €1.3bn, while deposits stood at €3.1bn following the deconsolidation of our Romanian subsidiary.
In FY 2023, Normalised Net Profit reached €140mn compared to €71mn a year ago with a strong increase in net interest income (+119%) stemming from higher rates and a significant improvement in operational efficiency (cost-income down by
34p.p. y/y), contributing 17% to Group profits and generating an ROCET18 of 33%. More specifically, for Cyprus, Normalised Net Profit stood at €63mn in 2023 vs €16mn a year ago, whereas for Romania it stood at €69mn vs €51mn a year ago.
Athens, March 7, 2024
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