Alpha Bank is satisfied with the way meetings have been going with foreign investors ahead of its upcoming 800 million euro share capital hike, boosting expectations for a strong result to the rights issue.
Speaking to reporters yesterday, Lazaros Papagaryfallou, General Manager - Chief Financial Officer and Dimitris Costopoulos, Head of Institutional Investor Relations and Analysts, stressed that last week there were 25 virtual meetings with foreign investors, existing shareholders holding 20 percent of the bank's shares but also with some new investors, while the meetings will continue as of today.
"To new investors who are interested in participating in the share capital increase, we emphasize that the only way to do this is to become shareholders before the rights issue," they said.
According to Alpha Bank officials, existing shareholders are very supportive of the capital increase, as the requested funds are intended to back the bank’s growth: the financing of its expanded loan portfolio. According to the business plan, new loans, and especially those intended to be granted under the Recovery Fund, will have a return on equity of 15 to 20 percent. These are extremely high yields that are hard to find in Europe.
The development narrative of the country, underlined by the executives of Alpha Bank, is very well received.
"It is preceded by the presentation of the government program which is a very detailed action plan and perhaps one of the most reliable programs for the use of European funds in coming years. Many investors we talk to, both existing shareholders and new investors, have closely followed the plan and forecasts for the economy. Our increase is based on the contribution of the banking system with very specific numbers associated with the Greek government’s action plan. Large international organizations already predict high growth rates for Greece based on the investments that will be made. Alpha Bank's growth is in line with the country's development narrative", they note characteristically.
Golden opportunity for banks
As noted by the Alpha Bank executives, the Recovery Fund and resources that will be channeled into our country create a unique opportunity for the Greek banking system to increase its assets and revenues.
“Essentially we can replace non-performing loans, which will soon be out of bank balance sheets, with new performing, healthy loans," they said.
It is estimated that business loans will increase by 24 billion euros during 2021 - 2026. According to Alpha Bank’s Tomorrow project, the return on equity from being marginally negative in 2020 will rise to about 7 percent in 2022, to 9 percent in 2023 and to 10 percent in 2024, something that will pave the way for a dividend distribution from the fiscal year 2023 onwards.
According to Alpha Bank's plan, about 100 virtual meetings with shareholders will have taken place by the end of June.
As decided by the bank, the new shares will be issued at a nominal price of 0.30 euros and the offering price will be determined through the book building process. Existing shareholders who will participate in the public offer will be entitled as a priority to the distribution of new shares.
The bank’s extraordinary general shareholders meeting to approve the rights issues will be held on June 15.