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ALPHA BANK
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Press Release
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April 3, 2008 At the Annual General Meeting of Shareholders of Alpha Bank, which took place on Thursday April 3, 2008, spoke the Chairman of the Board of Directors Yannis S. Costopoulos and the Managing Director Demetrios P. Mantzounis. The Chairman of the Board of Directors Yannis S. Costopoulos stated that: "The successful progress of the Bank continued into 2007. For yet another year, we have achieved high profitability and growth. Our good performance confirms that we are moving in the right direction as we apply our strategy consistently and effectively. We continue to develop our activities in a region with strong growth dynamics that are expected to remain for the coming years, in spite of the current difficulties in the financial markets and the likely slowdown of global economy. Alpha Bank is evolving into a major regional player in Southeastern Europe. The Bank has made significant gains in market share which opens up opportunities for further dynamic and sustainable growth. These prospects are based, among others, on the favourable developments in the Greek economy, but also in the economies of the countries in the wider region. The prevailing environment in conjunction with sustained high oil prices, will inevitably impact the Greek economy. This makes all the more urgent the need for structural reforms, especially in the social security system. It also requires decisive steps to be taken for promoting investments in crucial sectors, such as energy, which may provide renewed growth impetus. With regard to the countries of Southeastern Europe, despite the difficulties in the global financial markets, growth has not been substantially affected. The macroeconomic stability of these economies is necessary for their successful convergence within the European unification process, of which we are confident they can achieve. Countries such as Bulgaria and Romania continue to attain high growth rates, even after their accession to the European Union, while preparing their economies for joining the Eurozone. The dynamic growth of Alpha Bank is portrayed by the expansion of its market share in the Greek market as well as in the markets of Southeastern Europe, despite the intensification in competition. Indicative examples are our leading position in business lending as well as our position as one of the largest banks in the mortgage, consumer credit and mutual funds sectors in Greece. In Cyprus, Romania and Albania, Alpha Bank is ranked among the five largest banks, while in Bulgaria, Serbia and F.Y.R.O.M. it is already ranked among the top ten banks. Our policy of organic expansion is also supported with selective investments as was the case with Astra Bank that was recently announced, by which we will enter the Ukrainian market, a market with significant potential. We are working diligently to carry out our business plan. In several areas, we have exceeded our targets in the last two years. As a result we have already updated our Agenda 2010 Business Plan, setting more ambitious targets. By the end of this decade, we will operate more than 1,500 Branches, employ a total of 19,000 people and generate profits in excess of Euro 1.4 billion in the area. Taking into consideration the positive prospects in the markets where we operate, we are confident that we can face future challenges with success. We have built our operations on strong foundations, we have a sound capital position and we have improved steadily our internal control and risk management systems across the entire range of our activities based on the best international practices. Of course, the problems in the financial markets and the climate of uncertainty that prevails globally require us to be on the alert. The inclusion of the Alpha Bank Personnel in the newly established Auxiliary Pension Fund for Bank Employees (ETAT) was concluded during 2007. This development is of particular significance, as it establishes conditions of equal treatment and competition for the Bank, while the pension rights of Employees are secured under the guarantee of the State. Furthermore, we have already announced the third pillar of insurance, complementing the main and auxiliary pensions. To the 13,000 Employees of Alpha Bank, we express our thanks for their commitment to the work being carried out to expand our business activities and improve our profitability. I would like to thank them for their contribution to the progress of the Group. To our 3,500,000 Customers, we express our gratitude for the confidence they have shown in us, and we promise that we will continue in the future to support them in the achievement of their financial plans and goals. Finally, to our more than 110,000 Shareholders, we reiterate our confidence that Alpha Bank will continue to grow with steady and carefully planned steps, always safeguarding their interests while securing robust returns." Next, the Managing Director, Demetrios P. Mantzounis spoke about the Bank's performance in 2007: "Last year was another year of high profitability, dynamic growth and gains in market share, both in Greece and in the wider region of Southeastern Europe. In the second half of the year growth continued despite the uncertainty in the international markets. Net earnings in 2007 grew by 54% to Euro 850 million, up from Euro 552 million in 2006. Adjusted to account for the substantial donations to the areas that were stricken by the extensive fires in the summer of last year and the newly introduced tax levied on reserves, earnings stood at Euro 875 million against a targeted result of Euro 830 million. Earnings per share posted a commensurate growth of 50% and stood at Euro 2.10, versus Euro 1.40 in 2006. Net interest income after impairment losses grew by 18.5% to Euro 1.4 billion, as a result of the particularly high growth of our loans by 29%. Net interest margin rose to 2.7% from 2.5% in 2006, due to the dynamic expansion of the more remunerative activities. Fee and commission income also grew significantly by 16%, with income from credit cards and capital markets posting the highest growth rates, 28% and 36% respectively. On the cost side, operating costs grew by 15.5%, driven mainly by our accelerating expansion not only in Southeastern Europe but also in Greece. Expenses for 2007 include the cost of our financial assistance to the fire-stricken areas, which amounted to Euro 24.6 million. On a comparable basis, excluding this cost, the increase in operating costs is limited to 12.8%. This further improves the cost-to-income ratio to 44.7%, down from 45.7% in 2006, despite our rapid growth, thus confirming the effectiveness of our cost control policy. The improvement in the operating efficiency of Alpha Bank is largely due to the extensive restructuring plan applied in recent years. The key directions of this plan during 2007 were the transformation of the Branches into sales units focusing on the needs of consumers and small businesses, the establishment of uniform procedures at group level, the completion of the project for the centralisation of related activities under specialist central units for product and service support as well as the upgrading of IT infrastructure and systems. Furthermore, Alpha Bank is constantly expanding and improving its alternative distribution channels and, as a result, in 2007 46% of customer transactions were conducted via these channels. The increase in the Bank's capital by 22.9% was equally important and helped sustain the Bank's capital adequacy at high levels. The capital adequacy ratio currently stands at 12.5%, significantly above the 8% minimum limit set by the Bank of Greece, thus allowing the Bank to cover sufficiently the expansion of its activities across all sectors. The Bank's liquidity was not affected by the turbulence in the international money markets, thus demonstrating that it has in place an effective asset/liability management policy. The timely and accurate coverage of our funding requirements, during the first half of the year, contributed to the sustained high expansion rate of our activities. In this environment, customer funds under management grew by 13.4% to Euro 46.7 billion, of which Euro 2.3 billion represent new deposits attracted during the last quarter of the year, a development of particular significance since it was achieved without any adjustments to our pricing policy. A contribution to this increase was made possible by the expansion of our range of products, the receptiveness of customers for Alpha Bank products, and the development of the Alpha Prime programme, under which selected Branches act as advisors for promoting investment opportunities to our mass-affluent segment of our clientele. In Private Banking, customer assets under management grew by 17%, while in the Mutual Funds sector we managed to expand our share of the market significantly by 5.5 percentage points to 23.1%, with assets standing at Euro 5.6 billion. Furthermore, 2007 was yet another year during which Alpha Bank Mutual Funds achieved yields that ranked them in the top positions of their respective classes. It should be noted that Alpha Bank was selected among Greek and foreign banks as the administrator for the very first Exchange Traded Fund listed on the Athens Stock Exchange, enhancing our product offer to the investors. Loans reached Euro 43 billion, up by 29% from last year, mainly driven by our high credit expansion by 88% in Southeastern Europe, but also due to the satisfactory increase by 19.4% in the more mature and competitive Greek market. In Greece, in order to consolidate our position in retail banking we expanded our Branch network, by opening 20 new Units during 2007, with another 50 Branches scheduled to come into operation in 2008. In parallel, an extensive renovation, expansion and relocation programme for our Branches and support Units is also being implemented. In terms of the various loan categories in Greece, consumer loans grew by a significant 35%, increasing our market share by 0.8 percentage points to 13.1%. Growth in loans to very small businesses also increased considerably to 21%. The Bank's mortgage lending grew by 17.5% despite strong competitive pressures throughout the year. This performance enabled us to maintain our ranking as the market's second largest player. Finally, our presence in the small business segment was strengthened further by organisational and operational changes, with a number of our Branches focusing on loans up to Euro 150,000, and by the promotion of tailor-made products addressing the requirements of every business. In medium and large corporate lending, we have been occupying the top position in the market for many years. During 2007, we achieved further growth of our business volumes by 21% while, at the same time, we improved the quality of our portfolio. In particular, 2007 was a year of operational redesign for our business activities for medium-sized businesses, so that centralised management of operations also applied to this sector. In this context, we established seven Business Centres, soon to be followed by another three, bringing their number up to the planned total of ten. These Centres will assume the management of relationships with all medium-sized business customers. Large corporate lending grew by a significant 26%, with special mention due to shipping where loan balances reached Euro 1.4 billion. Additionally, in compliance with the new regulatory framework which calls for the separation of the credit approval and credit decision responsibilities, we established a Group Credit Unit, responsible for managing credit risk in Greece and abroad. The redesign of credit procedures and of the mechanisms for collection of debts are already producing results and, owing to the improvement in credit conditions in Greece and Cyprus, allowed us to reduce considerably impairment losses for 2007, as a percent of average loans, to 0.6% down from 0.83% in 2006. Accumulated loan impairments, amounting to Euro 841 million, account for 2% of total loans. The further improvement of our lending portfolio quality is also reflected by a significant decline of the non-performing loans ratio to 3.7%, down from 5.1% in December 2006, with coverage through provisions and collaterals standing at a very high 130%. Our performance and prospects are also confirmed by the major international rating agencies. Standard & Poor's recently upgraded our credit rating to "A-". As mentioned in their report, they took into consideration our centralised credit risk management system which improves credit control and debt collections procedures. They also noted that the reserves formed by the Bank as coverage against credit risk are adequate, with our strong profitability providing further comfort. Our aim is to establish Alpha Bank as a leading financial institution in the wider region of Southeastern Europe. To this end during 2007 we strengthened our Network in Southeastern Europe with 133 new Branches, and we created more than 1,000 new jobs. Thus, by the end of 2007, our Network in the Region consisted of 403 Branches with 5,000 employees. Despite the limited time during which the new Branches have been in operation, their performance in terms of business volumes and results is already satisfactory due to successful choice of locations. Loans grew by 88%, twice the market growth rate, driving our market share up to 7.3%, from 5.7% in 2006. It should also be noted that of the total value of Euro 2.6 billion which corresponds to the increase of total loans during the last quarter of 2007, almost half has been derived from Southeastern Europe, a development confirming our expectations that our expansion in this region will accelerate the growth dynamics of our business operations. Deposits grew by 46% due to the visibility of the Bank's franchise as our presence in the region expands. Profits before tax grew by 67% to Euro 117 million, already accounting for 14% of our total profits. The marketing of products which were successfully received in Greece coupled with the application of our know-how and its adaptation to the environment of Southeastern Europe contributed to the growth of our international activities. In Cyprus, with a loan growth of 59% we have gained third place with a market share in excess of 12%. Last Monday the Blessing Ceremony of our new headquarters and Main Building took place. In Romania, our presence was significantly strengthened with the establishment of 55 new Branches during 2007, bringing the total number of Branches to 125 from 70 Branches in 2006. Loans grew by 126%, establishing Alpha Bank as one the country's five largest banks with a market share of 6.5%. Special mention should also be made to loans to private individuals which tripled, driving our share of the mortgage market up to 8.5%. By 2010, our Network in Romania will number 380 Branches. In Bulgaria, by opening 35 new Branches we increased our Network to 80 Branches from 45 last year. Moreover, we have tripled our business volumes and are now established as one of the country's ten largest banks in terms of loans. In Serbia, where we operate with a Network of 130 Branches, having added 27 new Branches from 2006, we hold a significant market share of 5.7% and we have plans for further expansion, by establishing 60 additional Branches within 2008. In Albania, our network of 20 Branches places us in fifth place in the market and generates Euro 13.1 million of profits before tax. Finally, in F.Y.R.O.M. we have achieved a growth of 79% in loans, and we are planning further expansion. The dynamic outward-looking orientation of Alpha Bank is of the utmost strategic importance for accelerating our growth. We are fully committed to implement successfully our Agenda 2010 Business Plan, according to which by 2010 30% of our profits will be generated from Southeastern Europe where we will be operating with a total of 1,000 Branches (excluding the Branches we will be operating in Ukraine), twice the number of Branches in Greece. Starting from this year, we are issuing our Social Responsibility Report in a separate volume in which we present all the activities undertaken by the Bank during 2007 as expressed by the three - fold theme of Human Resources - Society - Environment. In cultural affairs, our actions aim primarily at supporting the arts and promoting the Greek letters and culture. The Bank's Museum of Banknotes in Corfu is one of the most comprehensive of its type in the world. Moreover, the Bank possesses one of the most significant collections of ancient Greek coins with over 10,000 exhibits. In an exhibition entitled "Hellenic Coinage: the Alpha Bank Collection" at the Benaki Museum, coins from the Bank's collection were displayed. Moreover, we are organising a series of speeches in various cities around Greece about the ancient coins while participating in exhibitions and international conferences. Some of the coins of the collection can be seen in the 2007 Business Review volume. Alpha Bank has, also, organised special events throughout Greece with exhibits from the Bank's "Works of Art Collection". For 2008 a road show of the exhibition "Greek Posters", which consists of large posters created by important Greek artists, has been organised. Moreover, the exhibition at our Main Building "Greek Women Engravers in the Alpha Bank Collection" will run until the end of the year. With respect to our policy for the protection of the environment, we have taken specific actions towards saving energy, reducing heating oil consumption by using natural gas, conserving water, using environment-friendly materials, recycling and effectively managing pollutants. Furthermore, the Bank supports, through sponsorships, environmental programmes such as "Blue Flags" and "Garbage-Free Nature" organised by the Hellenic Society for the Protection of Nature as well as the "Recycled Centres" programme organised by the Municipality of Athens. With regards to athletic activities, we are the exclusive sponsors of the Classic Athens Marathon as well as the Official Sponsors of the Hellenic Association of Amateur Athletics and the National Track and Field Teams. Furthermore, in 2007 we sponsored the Euroleague basketball Final Four competition held in Athens as the Official Bank of the games. The Alpha Bank Sports Panorama visited 21 cities and for the first time went abroad and toured 4 cities in Serbia. This year the exhibition will visit Romania and Bulgaria. Furthermore, we continue to sponsor our Champions Nikos Kaklamanakis, Tasos Gousis, Aris Grigoriadis, Periklis Iakovakis and Louis Tsatoumas. Our Personnel is the most important contributor to our success. As such in the Social Responsibility Report there are many interesting subjects concerning the Bank's human resources. The continuous professional training and education of our Personnel is one of the key priorities of the Bank. To this end, we have created a model Training Centre with 15 fully equipped training rooms. Moreover, a 150 seat auditorium will soon be operational. Our Training Centre is capable of responding to the increased and diverse training requirements of the Bank. A Bank that is constantly progressing, improving and developing to the benefit of all. For this reason I would like to thank, once again, the Personnel for their contribution. Moreover, I would like to express our gratitude to our Customers and Shareholders for their trust and support all these years." The General Meeting approved the dividend distribution of Euro 0.90 per share, a 20% increase compared to last year's Euro 0.75 dividend, to be paid on April 15, 2008.
PIRAEUS BANK S.A.
Continued growth for Piraeus Bank Group's operations and profitability in 2008 Piraeus Bank entered 2008 with a stronger capital base and robust liquidity ratio; based on the development of figures in the first quarter, deposits growth has further accelerated, while all other Group operations are also exhibiting strong growth dynamics and increase in market shares where it participates. These were the key messages by Michalis Sallas, Chairman of Piraeus Bank Group, during his presentation at the Ordinary General Meeting of Shareholders of Piraeus Bank, at which approximately 40% of shareholders were represented. Mr. Sallas pointed out that Piraeus Bank will be stronger this year, growing in a healthy and dynamic domestic banking and economic environment, despite the turmoil in international markets. He also noted that for 2008 profitability is forecasted significantly above 600 million euros against 503 million euros in 2007, i.e. excluding the net profit from the Bank of Cyprus stake disposal. With respect to quality of the loan portfolio, he mentioned that this is showing continuius improvement both in Greece and internationally, in parallel with the substantial growth of the Group volumes. Regarding the Group's 3-year Business Plan for the period 2008-2010, Mr. Sallas was confident that it is developing in accordance with management's plan, both in terms of business growth as well as branch openings in Greece and abroad, with the additional positive element, that deposits are expanding at even better pace of growth and the ratio 'loans to deposits' is improving further in the first quarter of 2008 compared to December 2007. Full Year 2007 Results and Volumes Specifically, as far as the Full Year 2007 results are concerned, Mr. Sallas noted: "2007 was yet another important year for Piraeus Bank, as we continued the Group's dynamic growth and achieved the targets that we had set. Group's net profit attributable to shareholders increased by 50%, amounting to 653 million euros, before the additional tax burden incurred in January 2008 to banking capital gains retroactively as of 2007. Taking into account the additional tax burden, net profit amounted to 622 million euros, up by 43%. In 2007, Piraeus Group expanded its international presence in Ukraine with the acquisition of International Commerce Bank and in the beginning of 2008 in Cyprus with Piraeus Bank Cyprus, following the acquisition of the branch network of Arab Bank Cyprus. Thus, currently, Piraeus Bank Group has a presence in 9 countries abroad. In total, 208 new branches were added to the Group in 2007, out of which 19 in Greece and 189 abroad. Additionally 3,104 new job positions were created, out of which 826 in Greece and 2,278 abroad. Thus, on December 31st 2007, human resources increased to 12,357 employees, out of whom 6,600 were allocated in Greece and 5,757 abroad. The Group's network reached 744 branches, specifically 320 branches in Greece and 424 abroad. At the end of December 2007, the Group's total assets reached 46.4 billion euros, up by 50% yoy, loans amounted to 30.7 billion euros, an increase of 48% and deposits & retail bonds issued to customers and retail investors reached 23.9 billion euros recording an increase of 33%. The number of customers in Greece exceeded 1.9 million compared to 1.6 million at the end of 2006, while taking into account customers in South Eastern Europe and Egypt the total number of customers at the end of the year surpassed 2.7 million". Dividend for 2007 Based on net earnings per share which amounted to 2.14 euros (calculated on the weighted average number of shares in issue during the year), the Bank's Board of Directors proposed and the General Meeting decided on the distribution of a total dividend of 0.72 euros per share for 2007, of which 0.36 euros has already been distributed as an interim dividend. The dividend is up by 41% against 2006 (euro 0.51 per share, adjusted for the share capital increase) and corresponds to a dividend yield of 3.4% based on yesterday's closing share price. Record date is Thursday, 15 May 2008. As of Friday, 16 May 2008, the share will be traded ex-dividend, while the payment of the remaining dividend amount (i.e. 0.36 euros per share) will commence on Monday 26 May 2008.
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