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Alpha Bank profits fall, plans 12 bln euro bad loan sale

Alpha Bank on Tuesday reported lower third-quarter profits after higher bad debt provisions and said it would launch a big securitisation of soured loans to clean up its balance sheet.

By George Georgiopoulos

ATHENS, Nov 19 (Reuters) - Alpha Bank ACBr.AT on Tuesday reported lower third-quarter profits after higher bad debt provisions and said it would launch a big securitisation of soured loans to clean up its balance sheet.

Alpha, 11% owned by the country's bank rescue fund HFSF, reported net profit from continuing operations of 4.8 million euros after net earnings of 59.4 million euros in the second quarter. Provisions for bad debt rose 6.3% quarter-on-quarter to 261.5 million euros.

Alpha, Greece's fourth largest bank, said it planned a 12 billion euro ($13.29 billion) securitisation of soured loans or so-called non-performing exposures (NPEs) to speed up balance sheet clean-up and cut its NPE ratio to 20% from 44%.

"We are embarking today on a comprehensive transformation plan, designed to leave the financial crisis behind us by dealing decisively with legacy asset quality issues and by improving significantly our profitability," CEO Vassilis Psaltis said in a statement.

The bank said the Greek government's Hercules asset protection scheme will "act as a catalyst" as it intends to apply for up to 3.7 billion euros of state guarantees for the securitisation under the scheme.

The scheme, approved by the European Commission in October, will help Greek banks to offload the non-performing loans clogging their balance sheets and constraining them from funding the country's recovering economy.

Banks in Greece have been working to reduce a pile of about 75 billion euros in bad loans, the legacy of a decade-long financial crisis that shrank the country's economy by a quarter.

Alpha said its non-performing loans ratio dropped to 30% of its book from 32.7% at the end of June.

($1 = 0.9028 euros)

(Reporting by George Georgiopoulos. Editing by Jane Merriman)

((george.georgiopoulos@thomsonreuters.com; +30210 337 6437; Reuters Messaging: george.georgiopoulos.thomsonreuters.com@reuters.net))

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