AstroBank on Wednesday posted an after-tax profit of €41.8 million for the year ending December 31, 2024, along with a capital adequacy ratio of 31.1 per cent, its highest ever.

AstroBank Chief Executive Officer Aristidis Vourakis hailed 2024 as “a remarkable year”, crediting the strong performance to the bank’s strategy and a favourable macroeconomic backdrop.

“Systematic efforts over the past few years, towards a focused business model, streamlined operations, reshaping and derisking our balance sheet, together with favourable interest rates and macroeconomic environment, contributed to delivering a strong financial performance,” he said.

Vourakis added that the bank’s strategic actions culminated in the binding agreement announced on February 27, 2025, which will see AstroBank’s operations merge with those of Alpha Bank Cyprus.

“The decisive actions of AstroBank’s management and personnel over last four years culminated in the successful transaction, announced on February 27, 2025, for the combination of AstroBank’s operations with those of Alpha Bank Cyprus to create an enlarged banking group in Cyprus,” he said.

“We are looking forward to the successful completion of the transaction and the enlarged bank’s contribution to the Cyprus economy within Alpha Bank Group,” he added.

Strong profitability and capital performance

AstroBank reported profit after tax before one-off costs of €41.8 million, while net profit reached €36.2 million, up from €30.4 million in 2023.

In addition, the return on equity increased to 14.3 per cent from 13.9 per cent the previous year.

Total operating income remained stable at €97.6 million, while net fee and commission income, alongside other non-interest income, rose to €23.3 million from €22.5 million in 2023.

Expenses were reduced significantly by 8.7 per cent to €46.5 million, down from €50.9 million in 2023.

This was largely attributed to cost efficiency measures and a reduction in other operating expenses, which dropped 20 per cent to €12.9 million.

Personnel expenses amounted to €26.5 million, a 2.1 per cent decrease from €27.1 million in 2023.

A voluntary redundancy scheme saw 25 employees depart at a total cost of €3.6 million, compared with 55 employees in 2023 at a cost of €7.0 million. Staff numbers fell from 392 to 365.

The bank’s cost-to-income ratio improved to 47.6 per cent from 52.3 per cent, reflecting its continued focus on efficiency and cost discipline.

Pre-provision income from core banking activities rose by 10.3 per cent to €51.2 million, up from €46.4 million in 2023, while total impairment charges declined to €5.8 million, largely due to reduced impairment on real estate owned assets.

Resilient balance sheet and capital ratios

Total assets stood at €2.609 billion at the end of 2024, down from €2.725 billion the previous year, mainly due to the repayment of Central Bank funding under the TLTRO III scheme.

Net loans fell to €773 million from €933 million, reflecting early corporate repayments, controlled loan growth, and successful resolutions of non-performing exposures (NPEs).

New lending during the year totalled around €73 million.

Customer deposits rose by 2.8 per cent to €2.216 billion, up from €2.155 billion in 2023.

The Common Equity Tier 1 (CET1) ratio improved markedly to 29.3 per cent from 22.1 per cent, while the total capital adequacy ratio rose to 31.1 per cent from 23.7 per cent.

This improvement was driven by internal capital generation and reductions in risk-weighted assets.

AstroBank also exceeded its Minimum Requirement for own funds and Eligible Liabilities (MREL) target, reaching 35.8 per cent, well above the regulatory minimum of 26.0 per cent.

Continued progress on NPE reduction and asset sales

The NPE ratio declined significantly to 10.6 per cent from 14.9 per cent in 2023, achieved solely through organic resolutions. Provision coverage remained steady at 43.3 per cent.

Disposals of real estate owned assets totalled approximately €40 million in 2024, of which €34.2 million were direct sales.

Over the past four years, cumulative real estate sales have reached around €180 million.

Moreover, liquidity remained strong, with a liquidity coverage ratio of 467 per cent, far exceeding the regulatory minimum of 100 per cent.

Pending merger with Alpha Bank Cyprus

On February 27, 2025, AstroBank announced a binding agreement with Alpha Services and Holdings S.A., the parent company of Alpha Bank S.A., for the sale of substantially all of AstroBank’s banking assets, liabilities, and personnel to Alpha Bank Cyprus Ltd.

The transaction is subject to final documentation and regulatory approvals and is expected to be completed by the fourth quarter of 2025.

Finally, the bank reported that the consideration for this transaction will be no less than €205 million.