Earnings call transcript: Alpha Bank Q2 2025 sees strong profit growth

Alpha Bank SA reported robust financial results for the second quarter of 2025, showcasing significant profit growth and strategic advancements. The earnings call highlighted a 31% quarter-on-quarter increase in profit after tax, reaching $294 million. According to InvestingPro data, the stock has delivered an impressive 90.64% year-to-date return, with the bank’s overall Financial Health Score rated as GOOD. The bank’s stock trades at an attractive Price-to-Book ratio of 0.83, suggesting potential undervaluation. For detailed valuation analysis, check out the comprehensive Pro Research Report, available exclusively on InvestingPro.

Key Takeaways

• Profit after tax surged 31% quarter-on-quarter to $294 million.
• Fee income increased by 13% quarterly and 21% year-on-year.
• A landmark partnership with Hellenic Post was announced.
• The NPE ratio improved to 3.5%.

Company Performance

Alpha Bank’s performance in Q2 2025 underscored its strong market position and strategic growth initiatives. The bank’s normalized return on tangible equity reached 14.2%, supported by a 1% increase in net interest income quarter-on-quarter. The Greek economy’s resilience and growth provided a favorable backdrop, with Alpha Bank capitalizing on its extensive physical footprint and strategic partnerships.

Financial Highlights

• Revenue: Not explicitly stated in the earnings call summary.
• Profit after tax: $294 million, up 31% quarter-on-quarter.
• Net interest income: Increased by 1% quarter-on-quarter.
• Fee income: Up 13% quarterly and 21% year-on-year.
• Customer funds: Rose 2.7% quarter-on-quarter.

Outlook & Guidance

Alpha Bank projects revenues around €2.2 billion for the year, with costs expected to reach €870 million. The bank anticipates a 2% annual growth in EPS and a capital ratio above 15%. According to InvestingPro forecasts, the bank’s EPS is expected to reach $0.40 in FY2025, with revenue growth projected at 25%. Targeting 12% annual earnings growth beyond 2025, the bank aims to leverage its strategic partnerships and market position to drive future performance.

Executive Commentary

CEO Vasilis Boussaltis emphasized the bank’s upward profitability trajectory, stating, "Our profitability is on an upward path." He also highlighted the importance of maintaining a balance between pricing, profitability, and customer rating. The partnership with UniCredit was described as a competitive differentiator, providing cross-border advantages.

Risks and Challenges

• Macro-economic pressures: Potential impacts from global economic fluctuations.
• Competitive lending landscape: Increased competition could pressure margins.
• Regulatory changes: Potential impacts from evolving financial regulations.
• Interest rate stability: Fluctuations could affect net interest income.
• Operational costs: Managing expenses while pursuing growth initiatives.

Alpha Bank’s Q2 2025 earnings call reflected a strong financial performance and strategic progress, positioning the bank well for future growth amid a competitive and evolving market landscape.

Full transcript - Alpha Bank SA (ACBB) Q2 2025:

Mina, Conference Call Operator: Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome and thank you for joining the Alfa Bank Conference Call and Live Webcast to present and discuss the First Half twenty twenty five Financial Results. All participants will be in a listen only mode and the conference is being recorded. The presentation will be followed by a question and answer session.

At this time, I would like to turn the conference over to Alfa Bank management. Gentlemen, you may now proceed.

Iasson Kepapsoglou, Head of Investor Relations, Alfa Bank: Hello, everyone. I am Iasson Kepapsoglou, Alfa Bank’s Head of IR. Welcome to the presentation of our Q2 results. Vasilis Boussaltis, our CEO, will lead the call, summarizing the second quarter and providing you with a few updates. And then Vasilis Kosmas, our CFO, will go through this quarter’s numbers in some detail.

As ever, we will take Q and A

Vasilis Boussaltis, CEO, Alfa Bank: in the end, and we should finish within the hour. Vasilis, over to you. Good morning from my side as well, and thank you all for joining. Let’s start with financial results on Slide four please. The first half of the year has put us on solid footing to deliver on our main objectives for the year.

Profits for the first half of the year stood at $517,000,000 or $0.19 per share and are 52% of the target we have set for the year. This translates into a 14.2% normalized return on tangible equity. We have also accrued €259,000,000 for distribution so far this year. That’s 60% of the guidance we have set and we intend to distribute circa €111,000,000 which is the first quarter accrual as an interim dividend in the fourth quarter. Our performance is driven by the defensive nature of our net interest income that was up 1% versus the first quarter of this year and the continuous growth of our fee income line with a quarterly result up 13% this quarter and 21% versus last year.

Our net interest income trajectory demonstrates our ability to position the balance sheet to maximize the value we can extract always within prudent constraints. Fee income growth is the product of the initiatives we have taken over the years that are now bearing fruit both on the corporate as well as on the affluent side of the business. We continue to position the business to maximize the recurring value we can create for our shareholders in a sustainable way. Vasilis will give you more detail on the second quarter results, but allow me to mention one thing. This quarter, we have been fortunate to have a $0.02 $5,000,000,000 windfall gain.

Given its nature, we have decided to use most of this opportunity to future proof our P and L from loading the cost of future management actions. As a result, we can sustainably reduce our cost of risk. This leads to a 2% upgrade of our EPS guidance and thus an expectation for a higher distributable amount. Now allow me to spend some time on the strategic actions we have taken that are equally important starting with Slide five. In May, we signed a landmark partnership with Hellenic Post.

Alfa Bank will offer a full suite of financial services through Altas 1,100 service points nationwide. We are proud to support Hellenic Post in its ambitious transformation journey by offering our tech expertise and state of the art financial products to their customers. As such, by the end of the year, Altas branches will roll out daily banking services and soon enough customers will have the exclusive access to Alfa Bank’s product suite in areas such as lending, insurance and investment. This is a partnership that promotes financial inclusion, a key priority for our group for over 1,000,000 Greek citizens, particularly in rural and underserved areas. For Alfa Bank, the partnership not only increases our physical footprint to over 1,400 locations, which is the most among any financial institution in the country, but financially, it opens up new revenue and liquidity streams for the group.

It is a powerful example of how we can use partnerships to better service our clients and the wider community in a sustainable manner. Let me now turn to our strategic partnership with UniCredit, which constitutes to be a cornerstone of Alfa Bank’s transformation growth agenda, and this is on slide six. As of May 2025, UniCredit has increased its stake in Alfa Bank to just over 20%, reinforcing the depth and commitment of our alliance. It is not just a financial investment. As Andrea Orsell has repeatedly stated, it’s a strategic partnership delivering tangible, commercial, operational and systemic benefits for both institutions.

We have successfully combined our Romanian subsidiaries creating a stronger regional footprint and unlocking synergies in cross border operations. Our clients now benefit from UniCredit’s pan European network across 13 countries. This positions Alfa Bank as the bank of choice for over 5,000 wholesale clients in Greece. In Wealth and Asset Management, the launch and expansion of the One Markets Fund Suite has been a major success with over $600,000,000 distributed to date. We have also issued three unit linked products in collaboration with UniCredit, totaling $110,000,000 in notional value and launched five structured note private placements.

In wholesale banking and syndications, we have co led over $200,000,000 in letters of credit and guarantees and approved 300,000,000 in international syndicated lending since the partnership began. Additionally, bilateral FX payments volumes have reached $650,000,000 year to date reflecting strong transactional momentum. In Capital Markets and Advisory, the integration into our investment banking platform is progressing well. Together with UniCredit’s advisory franchise, we’re targeting joint deal origination across various sectors. Lastly, beyond commercial gains, we are also leveraging UniCredit’s expertise in customer experience, process simplification, upscaling and rescaling programs, compliance and operational resilience areas that are crucial to our long term sustainability.

This partnership aligns with Europe’s vision for cross border integration and financial stability. It supports the Capital Markets Union and enhances systemic resilience across Europe. Looking ahead, we aim to scale our syndicated lending and M and A advisory, expand fee based income and broaden the distribution of asset management products across UniCredit’s network. Our partnership with UniCredit gives us competitive advantage that differentiates us from the rest of the pack. One, that we aim to fully utilize to enhance the value that we create for the benefit of all of our shareholders.

Our story remains intact as you can see on Slide seven. Our strategic actions alongside our balance sheet positioning will allow us to maintain an upward trajectory to our bottom line for 2025 despite the income from falling rates. Our defensive net interest income profile should now be evident as the first quarter saw the bottom in net interest income and we are now amongst the first commercial banks in Europe to see growth in their top line. We continue to dynamically manage our balance sheet. We’re capturing the tailwinds of loan growth.

We’re stepping up on our target for fee income generation and we are seeing the partnership with Unicredit accruing additional benefits quarter after quarter. Our profitability is on an upward path. The structural growth potential of the regions that we operate will allow us to maintain a pace of net credit expansion above the $2,000,000,000 mark. At the same time, our franchise is strongly positioned to benefit from the long term uplift in the penetration of fee generating banking services, which coupled with the partnerships we have put in place allow us to improve the revenue generation capacity of our business. These factors will work even more so in our favor beyond 2025, where we see earnings growing by 12% on an annual basis, still notwithstanding the impact of any share buybacks.

Now let’s move to Slide eight please. The trends for 2025 and beyond allow us to maintain a differentiating positive EPS growth trajectory in the medium term. These differentiations should now be apparent vis a vis our domestic and European peers. EPS is expected to grow by 9% per annum over the planning period above consensus estimates even before accounting for the effect of any buybacks. And then lastly on my side, on slide nine please.

We have been diligent and clear on how we intend to allocate capital and our hierarchy remains unchanged. Our first and foremost priority is to fund profitable loan growth. Our capital generation capacity suggests that we ought to be paying north of 50% of profits on an ongoing basis. And last but not least, our excess capital provides us with significant firepower to do more. The pace of capital generation and our strong capital position mean that we are comfortably able to fund both an acceleration in loan growth as well as a more generous distribution and bolt on acquisitions to maximize shareholder value.

And the uses of excess capital to conduct bolt on M and A, an area where we now have established a track record, should allow us to boost earnings and thus increase shareholder remuneration. And with that, Vasily, over to you.

Vasilis Kosmas, CFO, Alfa Bank: Thank you, Vasili. Hello to everyone from my side as well. Let’s first go through the one off items on P and L in Slide 11, please. First thing to note is that this quarter, we have had an accounting recognition of additional deferred tax assets. This is a byproduct of the merger between the holding company and the operating entity that was concluded in June.

These DTAs used to sit at the holding company level and were previously written off and sitting off balance sheet, as the holding entity was not expected to generate sufficient taxable earnings to recover them. Now that all taxable earnings sit within the same tax entity, we have reassessed the recoverability of these DTAs and have been able to recognise an additional €245,000,000 Note that there’s a good chance that part of this might need to be reversed by year end to the tune of 35,000,000 to €40,000,000 most likely in Q4. I appreciate this is an unfortunately volatility towards early results, but this is just how tax accounting works. As you can appreciate, these DTAs are not accretive to capital, but they have created additional room in our P and L. So we have used this opportunity to further fortify our balance sheet and future proof our P and L.

First, we have taken a post model adjustment for paying mortgage customers, CHF loans and transacted NPE perimeters. The proactive management of loans with modification has been in place for a long time. On CHF loans, please note that this is a small book for us with a relevant perimeter close to just EUR90 million. And second, we have taken a one off provision for a new NPE transaction to the tune of €60,000,000 net. This is in line with our existing strategy to be opportunistic when it comes to inorganic options.

With this transaction, we have been able to drive the NPE ratio down to by about 45 basis points in one go, taking us a fair bit closer to the 3% target we have set for the end of the business plan horizon in 2027. With the provisions we have taken this quarter, we have conclusively dealt with the issues of CHF loans and other retail mortgages. As a reminder, we don’t have any other pocket of loans with state guarantees, so nothing else to expect from us. As a result, we expect to have a lower cost of risk going forward of 45 basis points, and that includes servicing fees and securitization expenses. With that, let’s move to the next slide and talk about the underlying results and the main P and L items.

Operating income was slightly down quarter on quarter, as expected, due to a more normal contribution from trading. However, the underlying picture is solid with both NII and fees growing sequentially. On costs, we saw an uptick versus a seasonally low Q1. But importantly, total operating expenses are just 1.3 year on year, reflecting the benefits from the 2024 VSS program and the full amortization of certain IT assets. Looking ahead, we still expect gradual increase of staff costs and G and As, less so on depreciation charges.

Impairments came in at GBP40 million for the quarter, bringing the cost of risk shy of 40 basis points at GBP39 million, reflecting a benign credit environment. And finally, on the bottom line, reported profit after tax rose 31% Q on Q to CHF $294,000,000, while normalized profits stood at CHF $221,000,000. The strong performance reinforces our confidence in delivering full year guidance and sustainable earnings momentum in the second half. Next slide for the main balance sheet items. Performing loans were up 1% in the quarter and a jump 15% from last year.

Customer funds also 2.7 up in the quarter, with a year on year increase at 9%. Tangible book value was up 5% in the quarter, with the annual growth rate at 14% when we adjust for payouts. And then on capital, we stand at 15.7% in terms of fully loaded CET1. Moving to the next slide, Slide 14, we show the two main components of revenues. Net interest income was up this quarter as promised.

So after five quarters of decline, we’re now officially on an upwards trajectory. At €9,000,003 we’re seeing the impact of faster rate declines and the dollar depreciation. But it’s important that things have now turned the corner on the commercial side, with deposits and funding costs materially down. On the noncommercial side, the securities book hasn’t really grown this quarter, so the improvement you’re seeing here in its contribution stems from reinvestments of low yielding maturities, something that we have flagged repeatedly in the past. On the fee and commission side, we saw a 13% increase in the quarter.

Note that there is a gain from one scheme partnership with Visa. Leaving that aside, fees were still up 3% on account of better business credit related commissions, whereas first half is now up 16% versus last year, meaning that we’re tracking better than the full year guidance. Let’s now move to Slide 15 to look at loans and customer funds. Performing loan balances reached 34,900,000,000 €900,000,000 of net credit expansion in the quarter. We’re well on track to meet our full year guidance for net credit expansion with some risk to the upside.

Once we account for the negative FX headwind from the weakening dollar impacting primarily our shipping book as well as provisions in the reclassification of the NPE portfolio to HFS, growth came in at 1% for the quarter. Yet another quarter of strong new disbursements, euros 2,800,000,000.0 this time. Same pattern as before with corporates, including SME, driving growth and pretty evenly spread out across sectors. Spreads continue to be under pressure, but we remain disciplined in our underwriting criteria. As such, we avoid deals or refinancings that do not meet our own credit criteria and are not accretive to our shareholders.

Turning to customer funds. This quarter saw some solid growth with the £900,000,000 of deposits you see here, mainly coming from corporates going into core deposits. On AUMs, we continue to see good underlying net sales, with this quarter mainly driven by our own factory, although we did see some further growth in One Market Funds. Contrary to the local industry, the dominant products here are equity and balance funds with good management fees and are the typical target maturity products that replicate time deposits. The above reflect the strength of the Alfa Bank customer franchise.

And even though probably nobody would have bet on this a few months ago, we also had a positive valuation effect this quarter. Slide 16 on asset quality shows that the NPE ratio dropped to 3.5%. This is mainly on account of a circa €200,000,000 transaction that has been moved to held for sale. These, combined with post model adjustments I mentioned earlier, have driven the coverage ratio up to 57%. Underlying picture remains solid, and we’re not particularly concerned with flows, as should be evident by the underlying cost of risk that stood at just 16 basis points this quarter.

We don’t expect any meaningful surprises in the coming quarters, and thus we’re changing the full year guidance to 45 basis points. Then on Slide 17 on capital to finish up with results. This quarter, we had 40 basis points of capital generation organically, and this includes everything that’s visible as usual, so P and L, DTAs, the usual DPC amortization and RWA growth. This quarter has been more normal in terms of the increase in RWAs that comes with loan growth. Overall, we’re still very much on plan for organic capital generation.

The benefit you see from other capital elements relates to lower intangibles. And then for transactions, on one side, you have the RWA relief from the deconsolidation of YEA, which is, however, more than offset by the P and L provisions we have taken this quarter. As we have mentioned, DTA gains on the P and L is not capital accretive this quarter, but these are DTAs we expect to recover. So by definition, there will increase capital generation in the coming quarters. Finally, there was a dividend accrual of £147,000,000 taking the total year to date to two two fifty nine million pounds 60% of the target for the year.

All in, CET1 ratio stands at 15.7 on a fully loaded basis. Compare apples to apples, note that the transitional CET1 ratio stands at 16.1%, and there’s an additional 50 basis points and when we take into account pending transactions, taking the full number at more than 16.5%. Last one on my side on the 2025 guidance and outlook. Let’s turn on Slide 18, please. We still expect to deliver more than 2,200,000,000 of revenues.

This is likely going to come with slightly different mix as we see a better performance on fees and have delivered a strong first half on other revenue lines. That will help offset the marginal pressures from the faster decline in interest rates and the weaker dollar. Costs are still projected to land at about €870,000,000 so no change here. Provisions, if we took out the underlying core provisions, were running better than the 50 basis points guidance for the year. And the actions we took this quarter allow us to reduce the cost of risk guidance to 45 basis points for the year and going forward.

So all in, we expect EPS to land some 2% higher both this year and in the coming years, and that should filter through ROTE and tangible equity. Just note that capital is now expected to land above 15% this year on account of the acquisitions. And now let’s open the floor to questions.

Mina, Conference Call Operator: The first question is from the line of Sevin Ahmed with JPMorgan. Please go ahead.

Sevin Ahmed, Analyst, JPMorgan: Good afternoon. Thanks very much for taking my question. I have two, please. Firstly, on NII. It seems like you’re now citing additional pressure from the Eurodollar parity, and that is, I think, in addition, obviously, to the prevailing rate pressures.

So can we assume that the previous assumption of flat NII no longer holds? And if that’s the case, how should we think about the quarterly trajectory from here? And my second question is on capital. And if you could please make a bridge between the previous guidance of 16.3% plus CET1 for this year and the new guidance of 15% plus. You are citing the impact of acquisitions, Vasiles, you also mentioned, but I’m unable to reconcile these two figures based on the previously guided impact of the acquisitions.

Thanks very much.

Iasson Kepapsoglou, Head of Investor Relations, Alfa Bank: I guess both of those are for our CFO. Great. Thank you.

Vasilis Kosmas, CFO, Alfa Bank: On NII first, I think we’re pretty clear from now on quarter on quarter, NII is going to be growing. The trends are very clear, at least to me. We have rates that have moved a bit faster. And then based on our NII sensitivity, that saves off some €10,000,000 from NII, which is not a big number. If we end this year with policy rates up around about 2%, there’s really no implication for the future.

With regards to the U. S. Dollar, you mentioned it, it has been weaker than what we expected at the beginning of the year. Mind you that this week, it went up 4%. So it’s very unclear to me your guess is as good as mine what it holds for FX.

So maybe that’s another CHF 10,000,000 into NII. On the other hand, we have tailwinds, primarily from our securities book as the yield curve is steeper. And overall, I would say the risk is small, but it’s clearly on the downside. Clearly, all this is fully offset by our fee income overperformance, so we don’t expect any downside on the revenue for the year. Taking note of capital, you rightly mentioned that the 16.3% guidance is somewhat different to what we’re currently putting in front of you.

Now remember, there’s two elements to this. Roughly, the split is fifty-fifty. Some of it is the acquisitions that we’ve done. So we have guided that the acquisition of Flexfin, Astrobank primarily and Akcea will have an impact of roundabout 60 basis points for the year. And clearly, there is the items that we just mentioned on the PMAs, which account for the rest.

Mind you that this is only for these years. So these PMAs will be recovered in the coming quarter. So this last piece will be covered as we see in the coming quarters. Hope this clarifies.

Sevin Ahmed, Analyst, JPMorgan: Yes. Yes, indeed. In fact, I think the 16% for 2027 is in line with what you were saying previously. I was just wondering about the 15% for this year. That’s clarified.

If I may just follow-up with with with one more question here based on this. If I look at the impact of the Athena transaction, just the transfer cost of, you know, 89,000,000 of provisions here and the gross book value is approximately 200,000,000, which looks like quite a big capital cost. I understand the p and l impact of DTAs, but, you know, from a capital perspective, it looks quite costly. Can you just explain your thinking here in general and if we can expect anything further like this going forward? Or do you think that is basically pretty much done now?

Thank you.

Vasilis Kosmas, CFO, Alfa Bank: Sure. Thank you. Let me clarify on Athena. Athena, as you rightly mentioned, is shy of €200,000,000 gross book value, and the cost we have quoted on a capital level is roundabout €60,000,000 six-zero. I think more importantly, though, what you’re having to consider is what we have been saying for many, many quarters, that we’re very opportunistic when considering such transactions.

So we don’t see an organic need to do Athena. But as I mentioned, we had this $250,000,000 non accretive windfall profit. So we took an opportunity to do that. I think the price is right from prior situations. And as I said, Athena as well as the rest of PMAs have allowed us to decrease our cost of risk guidance.

So in my opinion, this is money very well invested for the shareholders.

Sevin Ahmed, Analyst, JPMorgan: Okay. That’s very clear. Thanks very much for the color.

Mina, Conference Call Operator: The next question is from the line of Kemeny Gabor with Autonomous Research. Please go ahead.

Kemeny Gabor, Analyst, Autonomous Research: Hello. Just two brief questions from me, please, both on capital and distributions. I think you mentioned 50 upside to the 50% payout that you would like to keep the the the payouts above 50% going forward. Is there any possible movement around the payouts from this year’s results at all? And the EUR 111,000,000 interim distribution later this year, did you say that it was a cash dividend?

Or is there a buyback element as well? Thank you.

Iasson Kepapsoglou, Head of Investor Relations, Alfa Bank: The second question, the interim dividend will be cash. And on the first question on whether the upside to the 50% payout comes from 2025 or later? Vasily, if you can take it.

Vasilis Kosmas, CFO, Alfa Bank: Gabur, thank you. I think the dividend payout discussion, it’s an ongoing discussion with the regulators. So it’s very difficult for me to give you firm guidance for 2025. Think but I think we are in continued discussions about that. And I think we will have some more news on this matter in the next in the coming quarters.

This is not you know, 50% is not like closed deal for 2025. So this is relevant both for 2025 and 2026, but I’m not going to give you a more than 50% number now for 2025.

Kemeny Gabor, Analyst, Autonomous Research: Interesting. Thank you. And just another small question on lending. I believe you alluded to an increased competition. I believe you mentioned being selective on some of the lending deals.

How do you see the competitive environment evolving? Has this, now stiffened a bit? What’s your sense here?

Vasilis Boussaltis, CEO, Alfa Bank: Gabriel, I’ll take that. It’s the other, Vasilis. Despite having practically five banks in the market, the competitive landscape as we have been highlighting for a few quarters is increasing. The good thing is that it is increasing whilst at the same time there is a strong bid from our customers. You have also other things that play a role, which is that the Greek economy is doing better.

Therefore, the rating of our good clients is improving, and that makes you also consider the relationships and its pricing on a dynamic basis. Having said that, though, we are utterly focused on ensuring that the underwriting is happening in such a way that, a, we’re focusing on the rating of clients which we deem as the right one. Number two is that we are very diligently adhering to the returns that we have committed to our shareholders in delivering. Number three, we are beefing up our product factories both in those that we’re working together with UniCredit and also others so that we are able, and you have seen also acquisitions that we have made to that front, in order to ensure that we penetrate, much better, into the wallet of our customers and we offer holistically the full Alfa Bank services to them. That obviously may shift certain things from net interest income into fees.

But what is important is that it augments the services and the value that we deliver to our customers. So whilst the competition is quite heavy, we are very, very focused in ensuring that the relationship between pricing, profitability and rating of the customer is intact.

Vasilis Kosmas, CFO, Alfa Bank: If I may add to that, Gabor, I mean, just to give you a case study, for instance. We have had excellent sponsors, shipping sponsors doing M and A. As a case study, we have a large refinancing linked to an M and A transaction to CRE. When we looked at the project economics, it was it’s still our loan when we looked at project economics, the credit terms looked much more of a private credit situation rather than commercial bank situation. Same applied to the spread.

Seems that two of our peers felt different about that, and I think I would wish them every good luck with that. From our side, our team opted to allocate the capital to another project and leveraging the momentum to be selective at good ROEs. This might have an impact on our lending expansion in Q3. Having said that, that does not move the needle for the annual budget and fiscal year 2025. There’s positive momentum in Greece and an abundance of good opportunities for us.

Kemeny Gabor, Analyst, Autonomous Research: Right. Useful color. Thank you, team.

Mina, Conference Call Operator: The next question is from the line of Butov Mikhail with Goldman Sachs. Please go ahead.

Mikhail Butov, Analyst, Goldman Sachs: Good day. Thank you very much for the call. I have few questions. Firstly, on the cost of risk and provisions. On a sell side call few weeks ago, I think you mentioned that due to macroeconomic volatility, some of the metrics on macro might be required by the auditors to be revised down.

And my reading from that was that this macro assessment can trigger some technical provisions at some point. Is there still a risk related to that or it is now also accounted for your revised guidance? So that’s my first question. Second, just quick clarification on the return on tangible equity guidance in ’27. So I think you previously guided that 13% is achievable including acquisitions.

The new target of 13%, is it pro form a acquisitions or it’s even excluding them, you expect 13% in the year ’27? And lastly, on your previous performing loan guidance, if we look at the growth on a year over year basis, it seems that it is gradually accelerating in ’26, 2027 from 2025. What drives this gradual acceleration on a year by year basis later on? Thank you.

Iasson Kepapsoglou, Head of Investor Relations, Alfa Bank: I’ll leave the last question on the acceleration, the apparent acceleration of paid loan growth to Vasilis, although it has to do with decimal places. I think you’re overrating this. I’ll take the first two. On 2027 return on tangible equity, the above 13% includes M and A. It’s exactly what we told you with Q1 results.

There is a tiny upside to EPS, as we mentioned, from the reduction in cost of risk, but it doesn’t really change the decimals in terms of return on tangible equity. On cost of risk and provisions, I think you have misread the comments we made on the pre close call. What I mentioned was a reminder of what we had said with Q1 results that we might be revisiting macro parameters. The macro environment remains volatile, so there’s always a possibility that, that might happen in the future. We haven’t felt the need to do it currently or with Q2 results.

It’s something that we will be assessing and we are assessing as a normal course of business on a continuous basis. So on loan growth for 2026 and 2027, Vasyl, if you want to take this?

Vasilis Kosmas, CFO, Alfa Bank: Sure. Thank you, Yasunav. On loan growth, I think we’re going to be closing this year, as mentioned, pretty much on target. This as we mentioned, a bit of an upside risk there, which should help our NII for 2026 and 2027. But going into the volumes, we see a pretty good environment for 2026 and 2027.

I think the economy is still resilient, is still growing, albeit a bit faster than we have expected. And the very fact that rates have landed to 2% around about six months earlier than what we were thinking seven or eight months ago means that our corporate department is a bit busier with pipeline proposals. So I think I will still be sticking to the guidance because we haven’t had the time to run the numbers for ’26 and ’27. But clearly, there is some upside risk to that by what’s happening on the ground.

Mikhail Butov, Analyst, Goldman Sachs: All right. Thank you very much.

Mina, Conference Call Operator: The next question is from the line of Nelly Simon with Citibank. Please go ahead.

Nelly Simon, Analyst, Citibank: Hi, thanks for the opportunity. I just have some questions, if you could clarify the capital walk over the quarter. So if I understand correctly, the tax gain from DTAs was not occurring to the CET1. Is that right? And then just on the dividend deduction for this quarter, would you take 50% of the €294,000,000 Just if you could walk me through the capital, why the capital reduced over the quarter despite the strong result.

Thank you.

Iasson Kepapsoglou, Head of Investor Relations, Alfa Bank: I’ll take both of those questions. As you know, we’ve hit the Basel III threshold for DTA inclusion for so any new DTAs are excluded from capital. So indeed, the DTAs you’ve seen on the balance sheet are not accretive to capital, as Vasilis mentioned. And then we have stated that we are accruing at 50% of reported net profit.

Mina, Conference Call Operator: Mr. Neles, are you done Okay. With your

Nelly Simon, Analyst, Citibank: basically, the earnings that did accrue so just to clarify, so the earnings that did accrue to CET1 were €49,000,000 less the, I guess, 147,000,000 dividend deduction.

Alex Kantarovitz, Analyst, Romer Capital: So it’s negative. Is that right? Is that how I think about it?

Iasson Kepapsoglou, Head of Investor Relations, Alfa Bank: Let’s take it offline, Simon, so I can run you through the EUR 1,000,000 numbers, okay?

Nelly Simon, Analyst, Citibank: Okay. Okay.

Mina, Conference Call Operator: The next question is from the line of Kantarovitz Alex with Romer Capital. Please go ahead.

Alex Kantarovitz, Analyst, Romer Capital: Yes. Thank you. Can you please give us more color on fees and commissions in the second half? If run rate of the second quarter would be repeated or if there are any deviations?

Vasilis Kosmas, CFO, Alfa Bank: Sure. Thank you. Practically, the drive what has driven the growth in fees in the first half, I mean, the drivers are still pretty much the same as in the second half. So I would say, effectively, we do expect asset management fees to continue growing. Second half generally top year, if you like, on transaction income the basis that you have more tourism flows in Greece.

And then last but not least, on transaction banking, the way our budget is done is that we’re heading up we’re building up the volumes in the second half. So back to the year end numbers, I think if I remember properly, I think we have guided for an 11% increase year on year for the full year. I think we’re now at around about 16%, 1.6% the first half year on year. I wouldn’t expect to be higher than 11%. It’s not easy to guide you to to to an exact number, be it thirteen, fourteen, 15%.

Alex Kantarovitz, Analyst, Romer Capital: That’s great. That’s great. Yes. Thank you.

Mina, Conference Call Operator: The next question is from the line of Mamishou Lohsmann with Ambrosia Capital. Please go ahead.

Mikhail Butov, Analyst, Goldman Sachs: Hi. Many thanks. Just a quick one. In your NII breakdown, there seems to be a shift historically as well from bonds to loan PE loans. Just curious what’s driving that.

Thank you.

Iasson Kepapsoglou, Head of Investor Relations, Alfa Bank: There has been a reclassification of CLOs to loans in order to align with peers in terms of disclosure and following the reverse merger, and that is also reflected in the NII breakdown.

Sevin Ahmed, Analyst, JPMorgan: Okay. Thank you.

Mina, Conference Call Operator: The next question is from the line of Nigro Alberto with Mediobanca. Please go ahead.

Sevin Ahmed, Analyst, JPMorgan: Yes. Thank you for taking my questions. I have two technical ones. The first one, if you can just clarify and repeat the NII guidance for this year. And the second one is on the PS target for this year on the 37.

Is this including the ongoing share buyback out of 2024 results? And the last one is, it is more strategic. You have an outstanding and granular relationship with UniCredit. Last week, the UniCredit CEO stated that they will not move on alpha unless ALFA believes is a good thing for them. How do you answer to this?

Thank you.

Iasson Kepapsoglou, Head of Investor Relations, Alfa Bank: Vasilis Cosmas will take the question on the NII guidance. I think you might need to repeat the second question. It relates to dividend per share. What we have stated is that dividend accrual will continue at 50% of reported profits. So I think that should answer that part of the question.

And then Vasilis Sartis will answer on UniCredit. Let’s start with the NII guidance, please.

Vasilis Kosmas, CFO, Alfa Bank: Thanks, Alberto. I think just to wrap up the numbers on the NII, I mean, don’t have full guidance, but rather than repeating myself a while ago from a question a while ago, let me try to put some numbers behind this. For the total revenue line, we are roundabout plus CHF 10,000,000 on fees. We are a bit less, maybe let’s call it CHF 15,000,000 down on NII and plus CHF 5,000,000 on other revenue. That pretty much gives you the flat the guidance confirming the guidance, if you like, on revenue.

I think we’ve discussed in another question the drivers of that, and I’m happy to discuss it again. But just to make it quickly, on the headwinds on the NII are rates that have moved faster to the 2% than we have expected, and a weaker dollar even though it has strengthened in the last week. On the positive trends, the refinancing of the securities book is even steeper than what we thought of before. And then spreads, we need to keep an eye on how these are going to be evolving. We think that especially time deposit spreads in the second half would move better since we don’t expect a very steep move on the rates, if any.

Vasilis Boussaltis, CEO, Alfa Bank: Vasily, on Well, since we are not the owners of the stake, I think I’m simply going to echo what Andrea said at UniCredit’s results recently when asked about the same thing. I mean, our side, let me reiterate that we do have an outstanding relationship at all levels with UniCredit. And this is not just me and Andrea. This is not just the top management, but it is indeed a wide array of people at UniCredit that are regularly involved with our people as we’re doing by now so many things together. We and they I think we’re all excited to do it because it’s truly a mutually beneficial relationship both in terms of the commercial activity as well as exchange of know how.

This is for us very important. The partnership, I can only describe it as as outstanding, and, also, I’m amazed how well it is progressing on all fronts. Therefore, a result, we at Alfa Bank, but also I think Greece as a country, we have all welcomed unit credit to Greece. And as the saying goes, if it works, then don’t fix it. But beyond that, I think I don’t think there is more at the moment to say as far as the current stake is concerned.

Vasilis Kosmas, CFO, Alfa Bank: Thank you.

Mina, Conference Call Operator: Ladies and gentlemen, there are no further questions at this time. I will now turn over the conference to management for any closing comments. Thank you.

Vasilis Boussaltis, CEO, Alfa Bank: Well, thank you very much, for attending this call, at the beginning of, August month. Therefore, I would like to wish you wholeheartedly, that you take some good relaxing vacations, that you energize yourselves, and you come back with more ideas and more followership on us. We’re gonna be doing the same. Therefore, we are very much looking forward to catching up with you again on the road. Iasson, the AR team, Lazarus, Vasilis and myself will be on the road meeting many of you.

And then we’re looking forward to early November to catch up on our nine month results call. Thank you very much and have a nice summer.

Mina, Conference Call Operator: Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone. Thank you for calling and have a pleasant day.

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