Alpha Bank Sa

Ladies and gentlemen, thank you for standing by. I am the Autege Chorus Call Operator. Welcome and thank you for joining the Alpha Bank conference call to present and discuss the first quarter 2026 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 Alphabank Management. Gentlemen, you may now proceed.

Hello, everyone, and welcome to the presentation of our first quarter results. I am Yasan Kebabsov, Alphabank's Head of Investor Relations. Our CEO, Vassilios Psantis, will lead the call with the usual summary and a few updates. Our CFO, Vassilios Kosmas, will then go through this quarter's numbers in some detail. And 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 the first quarter results on slide four, please. This quarter, we have reported 182 million euros of profits, or 221 million on a normalized basis. These numbers are down both on a quarterly and on an annual basis, affected by one of items that do not reflect underlying dynamics in the business, relating to a voluntary separation scheme and non-recurring factors affecting the performance of income from associates. On closer inspection, we are firing on all cylinders. Our net interest income is up 1% versus Q4 and 5% versus last year. Fees have increased 3% versus a seasonally strong fourth quarter and have jumped 29% versus last year. At 39%, our cost-to-income ratio has remained within guidance. At 44 basis points, the same can be said also for our cost of risk. Performing loans have grown a double digit versus last year, and customer funds are up both on a headline and on an underlying basis. Asset quality remains benign, and we continue to post good levels of organic capital generation in spite of the quarter-specific headwinds. Overall, the first quarter serves as a solid foundation to deliver on our guidance for the year which remains firm, despite the geopolitical uncertainty. And with that, let's take a look at the macro picture, starting with slide 5. Well, here you can see that Greece entered 2026 with a macroeconomic profile that would have seemed highly improbable a decade ago. Declined public debt as a shadow of GDP, sustained primary surpluses, and resilient growth. The first chart here highlights the continued de-escalation of public debt, which reflects a combination of sizable and sustained primary surpluses through fiscal management and the credibility gains achieved in recent years, combined with persistent headline inflation, mainly driven by services. Sizable and sustained primary fiscal surpluses have strengthened the country's resilience to external shocks. Fiscal discipline over recent years has not yet reduced vulnerabilities but has also created policy space, allowing the economy to absorb uncertainty more effectively than in the past. Greece's sovereign position has strengthened. The country now holds an investment rate rating by all rating agencies. Despite an environment of hate and global uncertainty, Greece continues to expand at a pace above the European average. According to the latest official data, real GDP grew by 2.1% in 2025, and this compares with a 1.4% average in the Euro area. This performance confirms that the recovery has both momentum and depth. What is particularly encouraging is the change in composition of growth. For the first time since the pandemic, investment has become the leading contributor, surpassing private consumption. In 2025, investment contributed 1.5 percentage points to GDP growth, reflecting growth-based momentum across housing, equipment relating to logistics, industry, and defense, and construction. Exports continue to grow, albeit at a more moderate pace of 1.7%, reinforcing the ongoing transition towards a more export-driven growth model. Turning to the labor market, unemployment fell below the 10% threshold for the first time in 15 years, marking a significant structural improvement, reflecting stronger job creation and enhanced labor market efficiencies. Tourism remains a cornerstone for the Greek economy. Travel receipt reached 23.6 billion in 2025, reflecting a new record year with nearly 10% growth. This underscores Greece's global competitiveness as a tourist destination. At the same time, the expansionary phase of the Greek real estate cycle continues, with residential prices having surpassed the pre-crisis level. Finally, economic sentiment remains robust. Although it has moderated over the past two months amid hate and geopolitical uncertainty, the economic sentiment indicator continues to stand up above both its long-term and the European averages, signaling sustained confidence, especially in construction and services. That said, moving now to slide six, improved fundamentals do not eliminate exposure to global shocks. The conflict in the Middle East adds yet another supply-side disturbance to an already fragile international environment. For Greece, the impact of the war does not stem from direct energy dependence on Iran. The country does not import oil or natural gas from Iran, with oil energy supplies fairly diversified across a number of countries. However, price risk is global, not bilateral. For Greece, the transmission of this shock operates through four main channels. First, energy. A supply shock, especially via the disruptions in the state of Hormuz, translates into higher oil and gas prices, pass-through into consumer inflation, and a potential widening of the trade deficit. This dynamic is already unfolding, with oil prices remaining above $100 per barrel since late April, contributing to renewed inflationary pressures. Thus, recent inflation forecasts for the current year were revised upwards by 1% of points on average. As a net energy importer, Greece remains vulnerable to sharp increases in international energy prices. Oil, oil products, and natural gas together amount for 61% of final energy consumption, one of the highest shares in the EU. Any sustained rise in prices would therefore affect inflation, production costs, and the external balance. Second, shipping and logistics. Longer routes, higher insurance premium, and increased rate costs affect maritime activity and disrupt supply chains. For a country with a globally significant shipping sector, this presents both operational complexities and pricing pressures. Ultimately, however, these dynamics imply an inflationary chain reaction across global supply chains, allowing dominant operators to leverage capacity shortages to command premium freight rates. Third, tourism. Tourism represents one of the highest direct contributors to the total gross value added in Europe, second only to Croatia. Hating regional risk perceptions can interrupt inbound tourist flow, especially in the eastern Mediterranean. Cruise activity is especially sensitive, with potential pressures on travel receipts during peak seasons. That said, past experience points to a potential substitution effect. If the conflict remains geographically contained, Greece could capture market share from more directly affected destination, as we have already seen during the Arab Spring in the early 2000s. And fourth, uncertainty. Prolonged geopolitical ambiguity delays investment decision and leads to a broad repricing of risk premium. 2026 is the final year of the Next Generation EU program, with strict milestones for the absorption of recovery and resilience facility funds. Delays will therefore jeopardize timely fund absorption and reduce the program's intended microeconomic impact. At the same time, this same timeline can act as a stabilizing force, incentivizing the timely completion of investment projects and supporting growth dynamics in the real term, as we have actually seen. The key challenge at the current juncture is not the immediate shock, but the duration the scale, and the spillover dynamics of the conflict. These factors remaining inherently unpredictable, particularly given the risk of renewed escalation of military actions in the region. Should the shock persist for several months, inflationary pressures could reemerge through both energy prices and elevated transport costs, echoing for probably on a smaller scale the supply shock observed after the Russian invasion of Ukraine. For now, we have updated weights using the ECLC Despite the downward revision to recent GDP forecasts, the growth outlook currently remains positive, with the Greek economy still expected to expand by just under 2% this year. The healthy starting point, combined alongside the available fiscal buffer, should allow the Greek GDP growth to remain in positive territory, even in adverse scenarios, outperforming our European peers. the ability to use fiscal space to caution the impact of hate and inflation, as has been the case in the recent past, provides some comfort for the asset quality outlook on individuals. While in the corporate space, healthy balance sheets with low leverage and ample cash buffers, particularly in the more exposed sectors of shipping and tourism, alleviate any concerns. And last but not least, we are positively geared to higher rates, both to our interest rate sensitivity of circa 1 million per basis points, as well as the current environment, creates opportunities for reinvestments in our bond portfolio. Despite this uncertainty, we have continued to build upon our track record of disciplined capital deployment and inorganic transactions, as you can see in slide seven. FlexFIN, enhance our data-driven factoring platform, unlocking access to small businesses and lower-tier SMEs with strong risk-adjusted returns and EPS accretion from year one. Astrobank added scale to our Cypriot presence, instantly positioning us as the number three bank in the country with circa 10% market share and doubling local profitability while remaining NP neutral and core equity of one light. Axia forms the backbone of our new regional investment bank in the capital markets platform, bringing market-leading advisory capabilities and immediate scale in Greece and Cyprus. The combination of Altis and Universal scales our insurance presence in Cyprus, creating a top three player, strengthening our life, non-life, and health offering, and materially expanding our distribution and cross-selling capabilities. All of the above transactions are progressing swiftly towards full integration, with a full EPS accretion visible from 2027. Across all these transactions, a clear and consistent strategic rationale emerges. We are selectively acquiring through the factories in Greece and Cyprus, platforms that enhance our ability to originate, manufacture, and distribute high-value products, while simultaneously driving consolidation in our core markets, where we see structural opportunities to build scale. This disciplined approach ensures that every acquisition is earnings-accretive, strengthens our core franchise, expands fee-generating capabilities, and deepens client penetration, ultimately reinforcing the resilience and sustainability of our operating model. This year, we have announced one more deal, which we can look at in more detail on slide 8. The acquisition of Alpha Trust marks a decisive step in scaling our wealth and asset management platform, expanding our high-net-worth individual client base, enhancing product debt and offshore capabilities, and delivering capitalized fee-based growth fully aligned with our disciplined M&A framework. Alpha Trust is a leading independent asset manager in Greece, managing over 2.2 billion of AUMs, having delivered a roughly 19% cargo between 2022 and 2025 across retail, private, and institutional clients, with a long-standing tradition spanning more than three decades. Importantly, Alpha Trust benefits from a highly recognized and trusted brand in the domestic markets, consistently earning best-in-class distinctions over time, reflecting the strength of its investment performance and client franchise. Strategically, the transaction delivers multiple benefits. It broadens our client base, including a meaningful high-net-worth individual segment, accelerated AUM growth through the addition of a proven discretionary model. It also enhances our product offering, expanding our range of mutual funds, discretionary mandates, and alternative investment solutions while supporting the development of our offshore wealth proposition, including private banking initiatives outside Greece. A key differentiator is the strong profitability of Alpha Trust asset management business, with mutual fund margins structurally higher than the sector average, driven by a more active allocation towards equities, alternatives, and higher yielding products, further strengthening our overall fee generation capacity. A key pillar of the transaction is talent. Alpha Trust brings a seasoned management team and a high-quality pool of private banking and asset management professionals, significantly strengthening our human capital in a segment where expertise is scarce and difficult to replicate. The founder and the CEO will remain actively involved post-completion, ensuring continuity, alignment, and a smooth integration, while playing a pivotal role in shaping the group's broader wealth strategy. The combination accelerates Alphabet's ambition to build a scale, key-based, capitalized wealth and asset management platform, enhancing recurring income, and reinforcing the diversification of our revenue mix. The transaction also brings group efficiencies in custody, transactional income, and the optimization of operating costs. From a financial perspective, the acquisition fully meets our group M&A criteria. It is expected to deliver circa 1% EPS accretion, a return on capital employed exceeding 15%, and a return on tangible equity uplift of more than 10 basis points, with a limited core equity to one impact of approximately 17 basis points. Completion of the transaction is expected by the end of the second quarter of this year, subject to regulatory approvals. We will keep investors updated as the process progresses and for compliance with applicable legal and regulatory requirements. Overall, this acquisition represents exactly the type of growth we prioritized. scalable, fee-based, capitalized, and accretive, reinforcing Alkabun's leadership in wealth management and positioning the group to capture long-term structural growth in private wealth, both domestically and offshore. Let's now turn to the outlook, starting with page nine. We need to be cognizant of the fact that 2026 is a transitional year for us. We're very much focused on integrating the acquired entity. Both, quite reasonably, we will not see the full benefits of the expected synergies from year one. The bottom line is that we expect to deliver 11% growth in normalized earnings. Incredible. Recurring earnings growth is the natural outcome of our strategy and what we believe will continue to differentiate us going forward. Now on slide 10, we present the model that is driving this earnings growth. We're fortunate to operate in a conducive macro environment. Yet our earnings growth is not simply driven by cyclical tailwinds or one-off optimization. Our structurally differentiated operating model is built around deep client relationships, capital life, revenue expansion, and disciplined execution. That is what drives superior earnings growth. The model rests on four mutually reinforcing pillars. Alphabank is evolving into the only truly universal business bank in Greece and the region, combining relationship banking debt with a breadth of advisory, capital markets, and transaction services that no domestic peer can replicate in an integrated way. The core advantage lies in share of wallet capture. Our offering extends beyond lending into investment banking also, transaction banking, trade finance, structured products, and cross-border solutions. converting existing relationships into recurring capitalized fee income. The ACIA acquisition gives us a vertically integrated investment banking and capital market platform, enabling clients to access M&A advisory and market-based financing in a single conversation, activities that historically migrated entirely to international banks. This structurally upgrades revenue mix and improves returns across the wholesale portfolio. Transaction banking is being strategically scaled to close the historic gap between our lending market share and fee penetration, transforming credit relationships into durable annuity-type revenues. Shipping and ciphers act as proof points, demonstrating that the model already works at scale. D, longstanding relationships supported by multi-product coverage, cross-border reach, and disciplined balance sheet usage. Our corporate offering leads to higher fee income growth, improved capital efficiency, and reduced volatility versus pure lending-led models. Second, we're moving from a transaction-led retail offering to financial planning at scale. A single integrated wealth engine serves all segments, combining asset management, structured products, discretionary mandates, pension, bank assurance, and cross-border booking through Cyprus, Luxembourg, and London. This democratizes private banking quality services while retaining operating leverage and cost discipline. The defining advantage is the introduction of a retail advisory capability and early mover increase. This allows our relationship managers to proactively advise clients, accelerating the penetration of investments and advisory mandates and shifting revenues from transactional to recurring fee-based income. The model is built on a unified financial planning framework, ensuring consistent penetration across the existing and new client bases. AlphaBank's existing best-in-class goal segment, investment penetration, demonstrates both the credibility of the model and the remaining upside across underserved segments. Again, this second engine leads to fee income growth, lower RWA intensity, and more predictable earnings through higher recurring revenues. Third, our growth will be accelerated and amplified by our partnership with Unicredit. This is a permanent structural advantage we have and a structural accelerator embedded across both revenue engines. Unicredit provides product factories, balance sheet scale, and cross-border reach that is hard to replicate organically, immediately expanding the addressable wallet of both corporate and wealth clients. For corporates, it enables participation in large-scale cross-border and complex financings while also allowing Alphabank to bring international capabilities into domestic mandates that exceed local balance sheet limits. For individuals and wealth clients, Unicredit broadens the investment product shelf and strengthens wealth capabilities, reinforcing free-reach growth without proportional capital consumption. Importantly, the partnership is positioned as enduring, embedded in daily client coverage, revenue generation and strategic planning, rather than dependent on episodic initiatives. It leads to faster revenue scaling, higher value client engagement, and enhanced competitiveness versus fears. And fourth, our growth engines are funded and sustained by a performance-led operating model. We have already demonstrated delivery credibility, reducing our cost-to-income ratio from 54% to below 4%, with further productivity gains embedded in the forward plan. Our investments in technology focus on measurable financial outcomes, process automation, cross-selling uplift through next-desk action engines, and risk reduction, directly supporting revenue growth while protecting asset quality. but also a refreshed people model, links career mobility, targeted learning, and performance incentives explicitly to commercial outcomes with enhanced relationship management productivity, treated as a core earnings lever. The result is a model where efficiency gains fund growth in investments, preserving discipline while enabling scale. This model delivers structurally higher returns, operating leverage, and sustained EPS compounding. Our earnings growth is driven by a coherent system, deeper client coverage, capital life expansion, permanent external acceleration, and discipline execution. This combination underpins faster compounding of EPS, tangible book value and shareholder distribution than peers, even where point in time profitability matrix temporarily converged rather than lead. It also comes with enhanced diversification. both in terms of an increase in share of fees, but also in terms of sourced assets due to higher growth in our international insurance and real estate businesses. And lastly, from my side, on slide 11, on how we create and return value to shareholders. We have been deliberate and consistent in how we think about capital allocation, and our framework and the hierarchy within it remain very clear and unchanged. our first and foremost priority is to fund profitable loan growth. Loan growth in Greece continues to show solid resilience, with corporate lending firmly leading the way. This is a reflection of strong underlying fundamentals, an active investment cycle, and increasing corporate engagement with the banking system. We are deploying capital where returns are attractive, while remaining disciplined in underwriting, particularly in a competitive large-cap corporate environment. This allows us to grow the balance sheet without compromising profitability, ensuring that capital is deployed where it generates sustainable value. Beyond lending, our investments in transaction banking, trade finance, asset management, and advisory businesses are strengthening the quality of our earnings growth with diversified revenue streams enhancing the durability and visibility of earnings. Second, Our capital generation capacity supports higher and sustainable shareholder payouts. The strength of our earnings growth is giving us confidence that distribution should continue to increase over time, underpinned by strong capital generation through the cycle. As a result, we are currently accruing, aligned with our objectives of delivering predictable and growing returns to shareholders. This is reflected in our actions. We reinitiated dividends conservatively, scaled them rapidly as confidence grew, and have now embedded a higher payout as part of our capital planning. The introduction of an interim dividend further reinforces both our confidence in the outlook and our disciplined approach to capital deployment. Share buybacks remain an important complementary tool, particularly in periods of market dislocation. and we continue to assess the optimal mix between cash returns and buybacks based on market conditions and relative returns. And, last but not least, our assessed capital provides us with significant firepower and increased strategic flexibility. So far, this has come in the form of value-accreted M&A, but, where appropriate, we may consider extraordinary distributions. The recent bolt-on acquisitions are a textbook illustration of this approach. highly selective, strategically aligned, earnings accretive, and capital efficient. This way, we can balance between rewarding shareholders with good returns, while at the same time keeping firepower to grow EPS to M&A. And with that, Vasile, over to you.