The three-year business plan of Alpha Bank is built around strengthening its resilience, even in a more conservative macroeconomic environment, by expanding its diversified income streams and offering integrated banking and investment solutions at home and abroad.
The start of the bank’s new growth cycle coincides with Greece’s return to developed markets and, according to chief executive Vassilis Psaltis, “the challenge for all of us is to sell Greece, so that investors from developed markets come and invest in the Greek economy”.
Alpha Bank’s management will deliver this message at upcoming roadshows in Europe, the United States and Asia.
On dividend policy, the bank’s management said the balance between cash dividends and buybacks was a dynamic exercise and would be shaped according to the economics of the share.
Lending and credit growth
“Loan growth will not keep accelerating, but growth and investment in specific sectors that have undergone structural transformation will continue, and so will lending,” Mr Psaltis said.
He said banks had made optimal use of loans under the RRF, which account for just 20% of bank lending. He estimated that a further €50bn in European funding would become available for the period 2028-2032 and said the Greek government had committed, in terms of grants, to increase funding for the Public Investment Programme.
Under Alpha Bank’s business plan, annual credit growth is estimated at €3bn over 2027-2030. The bank’s management said significant investment in energy was expected, particularly in storage, with projects worth as much as €15bn.
Tourism, infrastructure, real estate and shipping are also key drivers of investment. “The model of GDP growth has changed; it is no longer the pre-crisis model based on consumption,” Mr Psaltis said.
Small businesses
Alpha Bank’s management placed particular emphasis on lending to small businesses. “There are small businesses with healthy balance sheets and liquidity, and we see scope to lend to them,” the bank’s executives said.
They added that, in addition to financing, Alpha Bank would provide them with advisory services and payment services, and aimed to help them grow by encouraging acquisitions.
Mortgages
“There has been a marginal improvement,” Mr Psaltis said, but the problem was not only demand; supply was also an issue. “There are no new, modern homes to meet customer demand,” he said, adding that Alpha Bank would help address the problem by supporting the mortgage market.
Investment products
On investment products for retail customers, the bank’s management said clients were already choosing investment products, mainly retirement products. This was one of the areas on which the bank would focus, given the synergies in bancassurance.
Three pillars abroad
With diversified income streams a core element of its growth strategy through 2030, Alpha Bank is focusing on Cyprus, London and Luxembourg.
At the same time, it can reach a vast pool of corporate and private clients through its strategic alliance with UniCredit. “Wherever UniCredit has a presence, we do not need to invest, because we have one through it as well,” executives said. “We are not looking at an acquisition in wealth management abroad,” the bank’s management said.
Under its strategy, the bank is focusing on developing new products, an area where potential alliances have not been ruled out.
In Cyprus, which offers fiscal stability and a flexible business environment, Alpha Bank is focusing on lending through its subsidiary. “There is significant scope for growth, given that Cyprus has attracted several foreign companies, particularly in technology, and serves as a springboard for investment projects across the wider region,” Alpha Bank executives added. The bank also has a significant presence in insurance.
The London subsidiary also contributes to lending, mainly in real estate, while the Luxembourg subsidiary will become the main hub for wealth and asset management.
Alpha Bank executives said that €100bn of Greek wealth was held abroad, making it a target pool for the provision of wealth-management services.
Non-performing exposures in focus
The bank’s non-performing exposure ratio stands at 3.7% and, under the targets in its three-year business plan, will fall to around 2% by 2030. Alpha Bank’s management said the higher ratio was mainly due to the impact of moving €900m in mortgage loans into NPE.
These are performing loans, they said, which had been subject to a special arrangement (step-up terms and others). The bank’s management decided not to transfer them to an SPV for securitisation, but to keep them on its balance sheet and make provisions, as they are expected to return to performing status within 18 months.
As for the syndicated loan to a German company, which was restructured and involved more than 20 banks across Europe, the bank’s exposure is just €43m.