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Greece's Alpha Bank swings to profit as loan impairments drop

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A man walks past an Alpha Bank branch in Athens
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By George Georgiopoulos

ATHENS (Reuters) - Alpha Bank, Greece's third-largest lender by market value, turned profitable in the January-to-March period after a loss in last year's first quarter on lower loan impairment provisions and higher fee and commission income.

Alpha Bank, which is 9% owned by Greece's HFSF bank rescue fund, reported net earnings of 125.4 million euros ($134.37 million) versus a loss of 281.9 million euros in the first quarter of 2021.

Loan-loss provisions dropped 30.4% year on year to 50.5 million euros.

"Alpha Bank enjoyed a strong start to the year, demonstrating that the completion of the restructuring set out in our business plan is delivering sustainable profitability," Chief Executive Vassilis Psaltis said.

Despite headwinds, he sees Greece's economy staying "robust" this year, supported by improving unemployment, a strong rebound in tourism and significant investment inflows.

"We are on track to meet 2022 targets, while non-performing exposures, which declined to 12% in March, are expected to reach a single-digit level already in the second quarter," Psaltis said.

The bank's new loan disbursements in Greece picked up to 2.4 billion euros in the first quarter, with the momentum driving its loan book's expansion seen sustainable into the next quarters given a strong pipeline of underwriting projects in the energy, hospitality and infrastructure sectors.

On the asset-quality front, the group's non-performing exposures (NPE) ratio shrank to 12.2% from 42.8% a year ago and pending transactions in the second quarter should help it fall to single digits by mid-2022, the bank said.

Alpha Bank's NPE stock in Greece was reduced to 4.7 billion euros.

($1 = 0.9333 euros)

(Reporting by George Georgiopoulos; Editing by Mark Porter)

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