Alpha Bank Tops Q4 Earnings Estimates by 16%, Boosts Dividend Payout to 55%

Alpha Bank (OTC:ALBKY) reported a fourth-quarter net profit of €237 million, outstripping analyst expectations by a hefty 16%. The Greek lender's win was driven by fee income outperformance and tighter cost control, which helped push pre-provision profits 5% above consensus.

Fee income notably exceeded forecasts by 10%, buoyed by higher disbursement fees and a surge in asset management revenues, which climbed nearly 50% year-over-year as assets under management hit €22.4 billion. Operating expenses came in 4% lower than expected, trimming the cost base and resulting in a Q4 cost-to-income ratio of 29%.

Net interest income held steady, climbing 3% from the previous quarter. This uptick reflected the impact of consolidating Astrobank's results, alongside higher lending volumes. However, that was partly offset by shrinking loan spreads, with Greek corporate spreads falling by 7 basis points quarter-over-quarter - suggesting some margin pressure amid ongoing competitive lending conditions.

The bank experienced faster credit growth, with performing loans up 5% sequentially and 10% year-over-year. Corporate loans in Greece contributed substantially to this expansion. Even excluding Astrobank, loan book growth registered 3% sequentially, with net credit growth accelerating to €1.3 billion in Q4 from €700 million in Q3.

Alpha Bank's cost of risk rose unexpectedly, reaching 58 basis points in Q4 compared to estimates of 45 basis points. For the full year 2025, the cost of risk averaged 48 basis points, slightly above guidance. This suggests a cautious approach to provisioning, possibly reflecting uncertainties in the credit environment.

Capital metrics took a small hit, with the Common Equity Tier 1 ratio slipping 70 basis points to 15.0%, below expectations by 40 basis points. This drop was attributed to dividend accruals and some capital return activities offsetting organic capital build-up. Tangible book value per share improved 9% year-over-year to €3.28, sustaining shareholder value.

Signaling confidence, Alpha Bank upped its 2025 payout ratio to 55%, higher than the previous 50% plan, splitting distributions evenly between dividends and share buybacks. Notably, the bank has already paid a €111 million interim dividend in the final quarter of last year.

Looking forward, Alpha Bank projects normalized earnings per share of €0.40 for 2026, aligning with current analyst consensus and up from €0.36 in 2025. The institution also plans to hold an investor day in Q2 2026 to lay out new strategic priorities and goals, a move that will be closely watched for insights on the bank's direction in a challenging European banking sector.