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UPDATE 1-Alpha profit fall sets tone for Greek bank results

Published 11/23/2010, 11:18 AM
Updated 11/23/2010, 11:20 AM

* Alpha 9 month net profit falls 78% to 75.5 million euros

* Net interest income grows 5.2 percent to 1.373 bln euros

* Provisions rise 30 percent y/y to 644 million euros (Releads, adds chairman, analyst comment, background)

By Harry Papachristou and Lefteris Papadimas

ATHENS, Nov 23 (Reuters) - Greece's Alpha Bank set the tone for results from the recession-hit country's other lenders, with a one-off tax, rising provisions and weaker loan growth causing a sharp fall in nine-month net profit.

Alpha is the first to report third-quarter results. Greek banks have underperformed European peers since the start of the year as the debt crisis weakened demand for credit, leading to rising bad loans.

Greece's third-largest lender reported net earnings of 75.5 million euros ($102.6 million) on Tuesday, down 78 percent year-on-year but slightly above market expectations. Analysts in a Reuters poll were forecasting net profit at 71 million euros.

The bank booked a 61.9 million euro one-off tax hit on 2009 earnings, imposed by the government to shore up public finances.

"What we see in Alpha results and expect to see in other lenders is lower operating costs to boost core profit as much as possible," said Nick Koskoletos, analyst at EFG Eurobank Equities.

The country's debt crisis, which sparked contagion fears and roiled the euro, has hurt banks through higher funding costs and trading losses tied to their government bond holdings.

"In this difficult juncture our business model has proven very robust," Alpha Chairman Yiannis Costopoulos said in a statement.

Alpha hiked provisions by 30 percent to 644.3 million euros to shield itself against possible loan losses. Its deposit base stabilised at 39.9 billion euros, broadly flat compared with the previous quarter.

Alpha still managed to grow net interest income by 5.2 percent to 1.373 billion euros, in line with analysts' estimates. (Editing by Alexander Smith)

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