Alpha Bank Sa

Ladies and gentlemen, thank you for standing by. I am Yoda Yokoro's call operator. Welcome and thank you for joining the Alfa Bank conference call to present and discuss the full year 2025 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. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Alfa Bank Management. Gentlemen, you may now proceed.

Hello, everyone. This is Iasson Kepap-Tsoglu, Alfa Bank's head of IR. Welcome to the presentation of our full year results. Vassilios Psaltis, our CEO, will lead the call as ever with a short summary. And then it's over to Vassilis Kosmas, our CFO for the numbers. Q&A will come at the end of the call, and we should wrap up within the hour. Vassili, over to you.

Good morning, everyone, and thank you for joining our call. Let's start with an overview of 2025 on slide four, please. For 2025, we recorded 943 million euro profits. This is up 44% versus last year. On a normalized basis, profits stood at 907 million, up 5% year on year. Of the 81 coupon payments, earnings came up 36 cents per share, and this is up 3%. we are proud of the growth we have been able to deliver. On the one hand, we have defended against the fall of interest rates due to our prudent positioning of the balance sheet. On top, we have leveled up our feed generation capacity, enhancing our product factories. But at the same time, we have kept costs well contained as we continue to optimize the way we work, and we have managed to instigate a lower recurring cost of risk through management actions and the overlays taken at the end of the second quarter. Growth has come with solid commercial trends. As you can see, net credit expansion reached 3.5 billion for the year, and this is driven by corporates. Deposits were up 4 billion for the year, and we have generated 1.3 billion in net sales of assets under management. Thus by, asset quality was stable. Return on tangible equity stood at 11.9% on a reported basis and 13.8% based on normalized profits, while organic capital generation reached 206 basis points. We continue to position the business to maximize the recurring value we can create for our stakeholders in a sustainable way. And that value is increasingly distributed back to shareholders, as you can see on slide five. Here you can depict that we intend to pay 55% of 2025 reported profits as an ordinary distribution, always subject to AGM and regulatory approval. That equates to 519 million in distributions, which is a 6.1% yield on our current market cap. Since the reinitiation of dividends out of 2023 profits, we have been able to increase the payout ratio from 20% to 43% and now 55%, with ordinary distributions up fourfold in EURMJ. We intend to split the 2025 ordinary payout equally between a cash dividend and a buyback. At 259 million, this means that total cash distributions for 2025 profits will be more than three times those of last year. Given the 111 million interim dividend paid in December, the final dividend should be 148 million or approximately 6.5 cents per share. At 259 million, the size of the proposed buyback is proportional to the one conducted out of 2024 earnings. It is also in line with feedback we have received from a wide range of shareholders. In 2025, we have also built a demonstrable track record of disciplined capital deployment in inorganic transactions, as you can see on slide six. Astrobank added scale to our Cypriot presence, instantly positioning us as a top three bank in the country with a circa 10% market share and doubling local profitability while remaining NP neutral and CET1 light. FlexFin enhanced our data-driven factoring platform, unlocking access to small businesses and lower tier SMEs with a strong risk-adjusted returns and EPS accretion from year one. Axia. forms a backbone of our new regional investment banking and capital markets platform, bringing market-leading advisory capabilities and immediate scale in Greece and Cyprus. All of the above transactions have now been closed, and we are progressing swiftly with full integration. We finished the year announcing one more deal, which we can look at in more detail on slide 7. Alphabank has reached an agreement on the key commercial and legal terms for a transformational combination of insurance activities in Cyprus, bringing together universal life and outage insurance. The agreement comprises of two parallel steps, the acquisition of 100% of outage insurance and the merger of universal life and outage into a single combined entity in which Alphabank Group will acquire a majority stake. To support execution and ensure continuity, we are forming a long-term strategic partnership with the Fotos Fortiades Group, Universal's cornerstone shareholder. The RTS management team, which has delivered an impressive turnaround in recent years, remains fully committed, and this is materially reducing any integration risk. Completion is expected towards the end of 2026, subject to regulatory approvals. We will keep investors updated as the process progresses, in line with all legal requirements. This transaction will create one of the top three insurance groups in the country with a leadership position in accident and health and a clear path to long-term growth. The combination creates a platform with over 400 agents and more than 100,000 clients, more than doubling our cross-selling potential for banking products and boosting our asset management revenues. It also allows us to actively shape the Cypriot insurance market, building a powerful, diversified insurance platform with strong positions across life, non-life, and health. Universal brings an impeccable brand and deep expertise in life and health, while Altius contributes strong non-life capabilities, bank of France expertise, and a high-performing sales force. The combined strengths of the two franchises unlock a clear winning proposition, a broader, more competitive product suite, a more extensive distribution network, a stronger ability to serve households and businesses, and an enhanced customer experience and digital capabilities. This partnership offers a rare opportunity to build the best quality insurance group in Cyprus, supported by exceptional talent from both Universal and Altius. It positions us as a major player in financial services with a scalable insurance platform complementing our lending and wealth positions. It reinforces AlphaBank's enduring commitment to Cyprus, a market where we already hold a strong banking presence and see attractive macro prospects. From a financial perspective, the transaction is fully aligned with our disciplined capital allocation framework and exceeds all group-level M&A criteria. It delivers an EPS accretion of circa 2%, reflecting a strong profit uplift from Cyprus. a return on tangible equity accretion above 30 basis points, and a minimal cost for equity or one impact of just 23 basis points, fully consistent with our commitments. This is exactly the type of capitalized, fee-based growth we aim to prioritize. Scalable, accretive, resilient, and consistent with our long-term strategy. Let's now turn to slide eight, please. For yet another year, we have delivered on our promises. Results for 2025 have surpassed our original expectations. Revenues have come in line with guidance as we have been able to counteract exogenous headwinds to our net interest income through a significant outperformance in fees. Costs have also come in line with guidance, showing our disciplined approach to cost management. And cost of risk has been better than expected, as during the second quarter, we were able to boost management overlays on provisions releasing future cost of risk. The bottom line is that on EPS, on returns, on tangible book value and capital generation, we have been able to surpass expectations. At the same time, capital has been invested through value-accretive M&A to boost future earnings. Let's now turn to slide 9, please. As you can understand, we're going to be a bit frugal with guidance this time around, as our investor day is just around the corner. Vasilis, our CFO, will give you more details on the numbers in a minute, but I would like to highlight one or two things. First, 2025 was a fantastic year for us. We have been fortunate to produce more than 940 million profits for our shareholders. But, admittedly, our recurring profitability stood closer to 907 million. Secondly, we need to be cognizant of the fact that 2026 is a transitional year for us. We are razor focused on integrating the acquired entities, but quite reasonably, we will not see the full benefit of the expected synergies from year one. The bottom line is that we expect to deliver 11% growth on normalized elements. Credible recurring earnings growth is the natural outcome of our strategy and what we believe will continue to differentiate us going forward. The rest, I'm afraid, will have to wait until our investor day. And with that, Vasile, over to you.