NPL&REO News

Piraeus Bank rewards borrowers with home loans who pay on time

Piraeus Bank, Greece’s largest lender by assets, announced the launching of a reward programme for borrowers with home loans who service their debt regularly and have no arrears.

The move is an attempt to embed a culture of paying on time in a country where many borrowers struggled to service their debts during the country’s economic crisis.

Saddled with € 80 billion of non-performing loans (NPL), Greek banks have been shedding non-core assets and shrinking branch networks to reduce the pile.

The NPL ratio of Greece’s four major banks, including mortgages, remained the highest in the European Union at the end of 2018 – more than 12 times bigger than the EU average of about 3.2%.

Piraeus said it would start returning cash to borrowers, equivalent to a 0.10% reduction of the interest rate on their home loans, in January every year. The benefit will be a lump sum for payments made during the previous year.

Under the programme, Piraeus will also offer home repair loans at preferential low rates of one-month Euribor plus a spread of 1.5%.

The reward programme will apply to borrowers who took out mortgages up to the end of 2014, the bank said.

Original Story: Euronews | Reuters/ George Georgiopoulos 
Photo: Piraeus Bank
Edition: Prime Yield

Alpha Bank works on NPL securization plan

Following the steps of Eurobank, Alpha Bank is also working on a plan for the securitization of its non-performing loans (NPL) and their management by an independent company to which the lender’s competent staff will be transferred.

Named «Galaxy», this plan provides for the securitization of NPL’s worth over € 10 billion and the concession of their management to a company that will also absorb some 700 staff from Alpha, according to Kathimerini.

This is the so-called «carve-out» model based on splitting an activity from a company to form a new entity, which has been applied in countries such as Spain and Italy where banks had similar NPL problems. In the last 12 months this model has been adopted in Greece by Eurobank, while Piraeus has opted for a similar version.

Alpha will soon be putting this option to its board for approval so that it can launch procedures to find an investor. Viewed as the fastest and most efficient way for Alpha to tackle its bad-loan problem, this solution is also seen reducing costs for the bank via the transfer of staff to the new entity.

The same sources say that the solution proposed is closer to Eurobank’s model, i.e. the securitization of loans, so that they can be removed from the bank’s books and Alpha’s financial accounts can be streamlined.

Original Story: Ekathimerini | Author: Evgenia Tzortzi
Photo: Alpha Bank Site
Edition: Prime Yield

 

Hipoges reinforces in Greece with the acquisition of Alsvit

HipoGes strengthened its presence on the Greek market by acquiring Alsvit, having completed a majority shareholding agreement with that management services provider. The expansion into Greece started two years ago.

During this period, HipoGes has incorporated professionals in key positions to manage its Greek subsidiary. Currently it collaborates with one of the country’s leading financial entities on a debt recovery project and  it’s involved in several processes of NPL portfolios.

Alsvit is a REO Management Services company with over 12 years of experience in the Greek market, working with the country’s leading financial institutions and investors, providing a wide range of REO services, from asset valuation and pre-acquisition support, to sale preparation and execution. Alsvit is also active in construction, and has built and refurbished commercial and residential buildings, including a large number of branches for Greek banks.

«With this partnership, HipoGes guarantees professional and quality REO services in the Greek market and, at the same time, it incorporates knowledge and expertise in a new market where great development is expected, says the company in a press release.

Original Story: Hipoges | Author: PR 
Photo: HipoGes Site
Edition: Prime Yield

Greece’s four systemic banks slash NPEs stock by over € 15 billion in a year

Greece’s four systemic banks have reduced their stock of nonperforming exposures (NPEs) by € 15.3 billion in the last year, as their financial reports at the end of June showed that their total NPEs stood at € 78.8 billion, compared to € 94.1 billion a year earlier.

This reduction is the outcome of loan restructurings and settlements as well as the extensive sales of loan portfolios.

According to the second-quarter results issued by banks, Eurobank considerably reduced its NPE stock from € 18.9 billion a year earlier to € 14.3 billion, bringing down its share of NPEs from 40.7% to 32.8%of all loans issued.

Alpha Bank cut its NPEs from € 28.8 billion in June 2018 to € 24.7 billion last June, reducing the NPE share from 51.9 to 48.1%.

National also significantly contained its NPEs, from € 17 billion to € 13.7 billion within a year, pruning the share of NPEs from 42.4% at end-June last year to 36.5%just over two months ago.

Piraeus Bank lightened its load of NPEs from € 29.4 billion to € 26.1 billion by end-June, but it still has the largest sum, as well as the biggest NPE share, which came to 51.4 %, from 54.7% in June 2018. Within this month the lender is expected to complete an agreement with Swedish group Intrum for the concession of the management of Piraeus Bank’s entire NPE portfolio. Next year Piraeus is targeting the sale of NPE portfolios totaling € 4.5 billion.

Eurobank is also in the process of conceding NPE portfolios, aiming to bring its NPE index below 16% by the end of this year and to less than 10% by the end of 2021. National aims to contain its NPE stock by another € 1.8 billion, mainly via portfolio sales, while Alpha is eyeing the sale of €5.5 billion of loans in total this year.

Original Story: Ekathimerini | Author: Evgenia Tzortzi
Photo: Site Alpha Bank
Edition: Prime Yield

Greek banks met NPL shrinking targets this year

Greek banks have met their targets on reducing non-performing loans (NPLs), European Central Bank’s (ECB) Andrea Enria said in an interview to Eesti Ekspress, an Estonian newspaper.

Speaking on NPLs in southern European banks overall, the chairman of ECB’s Supervisory Board said that ECB had a very strong policy plan on dealing with NPLs, including what targets to set. The policy, he said, was successful, as over € 1 trillion in loans were reduced to € 580 billion.

The reduction includes Greek banks, he said which succeeded in meeting their reduction targets this year and will continue to reduce them next year. The ECB is following their progress, he told the newspaper

Original Story: The National Herald | Author: Ana
Photo: Photo by Toomas Järvet from Free Images.com
Edition: Prime Yield

National Bank of Greece sells € 1.2 billion unsecured NPL to CarVal

National Bank of Greece has agreed to sell € 1.2 billion euros of unsecured non-performing loans (NPL) to asset manager CarVal Investors as part of efforts to clean up its balance sheet.

«The price of the transaction was above 9% of the unpaid principal,» National Bank said.

The management of Greece’s second largest bank wants to reduce its NPL portfolio to around 5% of total loans by 2022, from 41% at the end of 2018.

Original Story: Thompson Reuters | Lefteris Papadimas 
Photo:Photo by Michalis Famelis / Wikimedia Commons
Edition: Prime Yield

Moody’s outlook positive for Piraeus Bank

 

Moody’s said that Piraeus Bank’s outlook is positive, reflecting expectations of an improvement in the systemic lender’s fundamentals in the next 12 to 18 months, after the completion of its restructuring plan.

In its update to investors, the agency gave Piraeus a Caa2 rating, which reflects the challenge the bank is facing in the reduction of its nonperforming exposures.

Non performing Exposures (NPEs) accounted for 52.1%of Piraeus’ loans in March, amid a gradual improvement of financial conditions in Greece, Moody’s said, adding that the bank’s prospects for further improvement in its financing, the quality of its assets and its profits are likely to have a favorable impact in its next rating assessment.

Piraeus is seen as able to return to sustainable profits in 2019-20, putting an end to a period of capital reduction; however, the failure of efforts to reduce its bad loans in 2019 and 2020 or a deterioration in the general economic environment could lead to a credit rating downgrading, Moody’s warned.

Original Story:Ekathimerini 
Photo: Piraeus Bank Site
Edition:Prime Yield

Real Estate shows «great potential» in Greece’s economic rebound

Greece’s property and construction sector could play a significant role in the country’s economic rebound, thanks in part to the measures on property taxation and bolstering building activity that the new government is about to pass, according to a report by Alpha Bank.

In its economic bulletin published in the end of July, the lender’s analysts wrote that the construction sector’s contribution toward Greece’s gross domestic product amounted to 0.9% over the first quarter of the year, up 32% on an annual basis.

This is the biggest sectoral contribution toward the growth of GDP, the same as that of the tourism sector.

Besides the rise in residential property prices last year, for the first time in a decade, there has also been an increase in the construction sector output index, which last year expanded 18.8 % year-on-year to reach 43.5 points.

Original Story:Ekathimerini 
Photo: Site Alpha Bank
Edition:Prime Yield

NPG sells secured NPL portfolio for €250 million

Greece’s National Bank (NBG) is transferring its first portfolio of loans secured against property, named “Symbol,” to a consortium comprising Centerbridge Partners and Elliott Advisors for €250 million.

The lender announced that the price of the transaction comes to about 28% of the outstanding capital on the package’s loans, which stands at €900 euros, and the sale forms part of NBG’s strategy for managing non-performing exposures (NPE) as submitted to the European Central Bank’s Single Supervisory Mechanism.

The Symbol package contains 2,800 non-performing loans (NPL) issued to small and medium-sized enterprises and professionals, with collateral that comes to a sum of 8,000 properties. After the transaction is completed the consortium will concede the management of the portfolio to Cepal Hellas Financial Services.

Symbol is the third portfolio of loans secured against properties that a Greek bank has conceded in the battle against bad loans. It follows the sale of the Amoeba package by Piraeus Bank, which is worth €1.4 billion, and the Jupiter portfolio by Alpha Bank (800 million). Eurobank and Piraeus intend to concede two new portfolios within 2019.

Original Story:Ekathimerini | Evgenia Tzortzi
Photo: Photo by Michalis Famelis / Wikimedia Commons
Edition:Prime Yield

Second home sales jump by 54% in Greek islands

Holiday home transactions on selected islands of the Cyclades recorded a 54% annual increase in the first half of the year, according to an analysis of data from the Property Transaction Value Register of the Finance Ministry’s General Secretariat of Information Systems.

The majority of buyers originated from other countries and that some of sought not only to acquire a holiday home in Greece but also to secure a residence permit for non-European Union citizens (Golden Visa).

Bank of Greece data for the first quarter of the year show a 130% year-on-year growth rate in capital inflows from abroad for the acquisition of properties.

Original Story:Ekathimerini | Nikos Roussanoglou
Photo: Toomas Järvet for FreeImages
Edition:Prime Yield

  Greek banks aim to shrink their NPL pile in €54 billion by 2021

A reduction of €54 billion in bad loans is expected to be achieved by Greek banks, which they are able to do if they work hard, stressed sources of the institutions.

With regard to the tools that banks have adopted in reducing NPLs by 2021, they have a good balance as they rely on sales and securitisations. According to the same sources, a major and crucial role in reducing red loans will play the course of the macroeconomic magnitudes of the Greek economy and real estate prices.

If there is an improvement on these two fronts, banks could go beyond the targets set by the end of 2021. However, reducing the  non-performing loans (NPL) by €54 billion will bring their percentage to 19% when that the average in the eurozone is at 3.8%

With regard to the banks’ preferred solutions for reducing red loans, they should create a balance between the interests of borrowers and the maintenance of stability for the banks, without these solutions being too dependent on the “haircut”.

As far as the capital position of banks is concerned, it is in good standing and capable of dealing with non-performoing exposures (NPEs).

The two plans for reducing NPEs

The two more drastic, horizontal reduction plans for NPEs promoted by the FSF and the Bank of Greece are positive and good systemic solutions that can help banks.

With regard to the TFM project, which provides for an APS mechanism to support a larger volume of NPLs and is currently awaiting the approval of the Commission, decisions need to be taken quickly. It should be noted that in other countries, such as Ireland, Spain and Portugal, where banks faced similar problems with non-performing loans, the adoption of systemic solutions (NAMA, SAREB, contributed to their effective management, with the result that the percentage of red loans being now in a single digits).

Beyond that, the reduction in red loans and the increase in loans that are necessary to boost the profitability of the banking system are directly interdependent and go hand in hand. As long as the red loans are reduced and the macroeconomic environment continues to improve, banks will also grant new loans.

Regarding the issue of auctions, the same sources reported that they are being monitored and banks have to reduce the stock of real estate they have in their portfolios and as the prices on the real estate market improve, to get rid of the real estate from the balance sheets.

Original Story: IBNA | Giannis Agouridis
Photo: Jonte Remos for FreeImages
Edition:Prime Yield

Greece’s banks plans’ to shrink NPE pile considered to be «ambitious»

Plans by Greek banks to reduce their load of sour loans by €54 billion by the end of 2021 are «ambitious», a source familiar with the situation in the country’s banking sector said.

«They must work hard to achieve it,» the source said to Reuters.

Bad loans or so-called non-performing exposures (NPEs) are the biggest challenge facing Greek lenders, the legacy of a multi-year debt crisis that shrank the economy by a quarter and drove unemployment to a high of nearly 28% in 2013.

Banks have made progress in reducing the pile and repairing balance sheets, but the pace needs to speed up to enable them to finance the recovering economy.

At the end of the first quarter, Greek banks were still saddled with €80 billion of NPEs, meaning their ratio of sour credit over total loans was 45.2%. They aim to bring the ratio down to below 20% by the end of 2021.

«Banks need to work hard to achieve this target and try to overachieve it, if they can,» the source said. «It is crucial for the recovery in their lending ability and profitability

The target of bad loan reduction is the maximum amount feasible given banks’ current levels of capital, the source said, and it will be a significant achievement if they meet it.

But even if the hoped-for €54 billion reduction is attained, Greek banks will still be far away from peers in the euro zone, where the average NPE ratio stood around 3.8% at the end of the first quarter, the source said.

«If bank balance sheets remain clogged with non-performing assets, this impairs their ability to finance new initiatives in the economy,» the source said.

Greek authorities, seeking to help banks to clean up their loan books faster, have put together new schemes to help lenders offload bad debt by wrapping it into asset-backed securities.

«These initiatives are very important to reach the desired (bad loan) levels,» the source said.

Original Story:Reuters |George Georgiopoulos
Photo: Markellos P. from FreeImages
Edition:Prime Yield

Alpha and Eurobanc report fall in quarterly profit

Greek lenders Alpha and Eurobank reported a drop in profit in the first quarter of 2019, hurt by lower trading gains and a fall in net interest income.

Alpha Bank, Greece’s fourth largest lender, reported net profit from continuing operations of €27.5 million, down from €65.4 million in the same period a year earlier. It reported a net loss of € 800,000 in the last quarter of 2018.

The lender, 11% owned by the country’s bank rescue fund HFSF, said provisions for non-performing loans (NPL) fell to €178.3 million from €336 million in the same period a year earlier and €669 million the fourth quarter.

Greek banks ae working to reduce their NPL stocks and meet targets on so-called non-performing exposures (NPEs) agreed with European Central Bank regulators.

Alpha’s non-performing loans ratio dropped to 33% of its book from 33.5% at the end of December.

Peer Eurobank, Greece’s third-largest by assets, reported a 43% drop in net profit from continued operations compared to the same period a year earlier, hurt by a fall in net interest income.

Eurobank, which is 2.4% owned by the country’s HFSF bank rescue fund, reported net earnings of €20 million, down from a profit €35 million in the first quarter of 2018.

Credit loss provisions fell 1.5% year-on-year to €165 million. So-called non-performing exposures (NPEs) dropped to 36.7% of its loan book from 37% at the end of December. The company said cleaning up its balance sheet remained its top priority.

According to information from Reuters, Eurobank has received binding offers for a €2-billion securitization of sour residential mortgages and non-binding offers for a multi-asset securitization of about € 7.5 billion.

Original Story: Reuters | George Georgiopoulos 
Photo: Site Alpha Bank
Edition:Prime Yield

Greek lenders optimistic on road to recovery

The four Greek systemic banks – Piraeus, National Bank of Greece, Alpha Bank and Eurobank — are burdened with €85bn of non-performing exposures, equal to 45% of their loan books and to almost half the country’s forecast gross domestic product for 2019. They have cut non-performing loans (NPLs) by 21% over the past four years through write-offs and sales of packages of soured loans, but are still struggling to meet rising demand for liquidity as the Greek economy recovers.

An unusually high percentage of NPLs at Greek banks compared with other EU member states hit hard by the financial crisis — Spain’s percentage of NPLs is about 6 % — is the result of a long period of inertia by bank boards and regulatory authorities, says Emilios Avgouleas, professor of international banking law and finance at Edinburgh university in the UK.

«This mountain of bad loans is the biggest challenge the banks face. It’s been taking far too long for their balance sheets to be cleaned up, but there’s been sizeable progress recently,» says Nikos Karamouzis, former chairman of Eurobank.

The European Central Bank’s banking watchdog, the Single Supervisory Mechanism (SSM), in March injected a new sense of urgency into the lenders’ effort to reduce their piles of soured loans. Under pressure from the SSM, the banks agreed to slash their bad loan portfolios by more than €60bn by the end of 2021, cutting NPLs to below 20%. The ECB watchdog has kept the banks under scrutiny even though Athens last year finished its third international bailout and has resumed borrowing on the international capital markets.

Two plans to further reduce NPLs could be a catalyst for banks to achieve the ambitious targets set by the SSM. But both still have to be approved by the EU’s competition directorate. One is a new version of the original HSFS plan presented last year. The finance ministry appointed JPMorgan Chase to complete the proposal, which was loosely modelled on the US bank’s rescue of Italy’s Banca Monte dei Paschi di Siena.

The scheme calls for transferring bad loans to a special-purpose vehicle and securitising them using a state guarantee for the senior tranches. An amount of €5bn in state guarantees would suffice to remove €15bn-€17bn from the banks’ balance sheets, says Martin Czurda, chief-executive of the Hellenic Financial Stability Fund (HFSF), the body established by Greece’s bailout creditors that manages the Greek state’s stakes in the banks.

The second plan, devised by the Greek central bank, could wipe as much as €38bn off the NPL pile and would not require additional state funding. The banks would transfer €7bn of deferred tax assets to a special-purpose vehicle, which would then issue bonds and use the proceeds to acquire NPLs held by the banks. Deferred tax assets were granted to the banks to offset losses suffered during a restructuring of Greek government debt in 2012. They comprise some 60 per cent of the capital at the country’s banks. The competition directorate must decide whether the tax credits could be considered as illegal state aid if they were transferred to a separate unit selling bonds.

«We argue that no state aid is involved as the bonds would be sold at market prices,» says Yannis Stournaras, governor of the central bank, adding that investors «responded enthusiastically» to the scheme at roadshows held by the Bank of Greece in London and New York. Rothschild is advising the central bank.

«It’s not an unusual solution — Portugal, Spain and Italy have all used deferred tax assets for securitisations,» says Stournaras. He notes that the scheme, if successful, would reduce the NPL stock by almost 50% and cut the contribution of deferred tax assets to the banks’ regulatory capital to 30% . «At the end of the process, we would have profitable and much healthier banks with fewer provisions that would qualify for investment grade ratings. They would also have unloaded most of the deferred tax assets, which are not the best quality form of capital

If all goes to plan, the finance ministry would launch the first bond issue at the end of 2019, followed a few months later by the central bank. Greek bankers have welcomed both schemes as a useful extra weapon in the battle to reduce their NPL percentages to low single digits in line with the EU average.

«I can see light at the end of the NPL tunnel,» says Christos Megalou, chief executive of Piraeus Bank, the largest Greek lender. «We think both plans are good: they’re complementary and cater to different segments of the market. We’d use them alongside our other NPL-reduction projects

Piraeus reported the sector’s highest percentage of non-performing exposures at 49% of its loan book in December, compared with 48% for Alpha Bank, 41% for National Bank of Greece and 37% for Eurobank. In the meantime, the banks will continue selling and writing off soured loans. All the banks are expected to sell packages of secured corporate loans this year.

Eurobank, the third-largest lender by assets, has made the most progress, thanks to a €780m EU-approved takeover of Grivalia Properties, a Greek real estate fund that gave the bank’s capital base a significant boost.

The merged company plans to securitise about €7bn of bad loans, which would be transferred to a special-purpose vehicle that would issue senior, mezzanine and junior notes. Eurobank hopes to cut NPLs to 15% by the end of 2019 and to single digits by 2021.

Yet the struggle to make the banks investible again is far from over. The SSM will continue to keep a close watch on progress as part of an «enhanced surveillance» programme agreed with the EU after Greece emerged from its third bailout last August.

Original Story: Financial Times |Kerin Hope
Photo: FreeImages.com/Takis Kolokotronis
Edition:Prime Yield

  National Bank of Greece launches new NPL reduction program

National Bank of Greece’s (NBG) new program aimed at settling nonperforming housing loans provides for a more aggressive approach to the management of its bad-mortgage portfolio, including debt write-offs.

Bearing the English name “Split & Settle,” the program intends to offer incentives to debtors to pay off part of their dues, and, according to NBG chief executive officer Pavlos Mylonas, is seen leading to 150,000 settlements.

Mylonas explained that the write-offs will not be granted to everyone, and that the selection will be based on the income and property profile of each borrower. They will, however, spearhead the effort to reduce the sum of bad housing loans from €  billion at the end of 2018 to just 1 billion at end-2022.

According to the bank’s management, loan write-offs could be supported by the high level of provisions, which distinguishes National from the competition and allows it to proceed with more aggressive moves on the restructurings front, to the benefit of its clients. Provisions amount to 59% of NBG’s entire loans portfolio and 42% of the mortgage portfolio, and, as Mylonas said, the bank would prefer a solution through write-offs than via the sale of a portfolio to funds, which would inflict greater losses on the lender.

Original Story: Ekathimerini |Evgenia Tzortz 
Photo: Photo by Michalis Famelis / Wikimedia Commons
Edition:Prime Yield

Greece’s second-largest lender gets 1stQ profit lift from trading gains

National Bank (NBG), Greece’s second-largest lender by assets, said profit from continuing operations had risen in the first quarter of 2019 on the back of higher trading gains.

NBG, 40% owned by the country’s bank rescue fund HFSF, said net profit from continued operations reached €131 million versus a net profit of €8 million in the last quarter of 2018.

Greek banks are focused on reducing their bad debt portfolios and meeting targets on so-called non-performing exposures agreed with regulators.

Trading income rebounded to €101 million in the first quarter from a loss of €47 million in the previous quarter.

«The results of (the) first quarter are beginning to reflect NBG’s significant efforts at transformation,»NBG Chief Executive Paul Mylonas said in a statement.

NBG’s ratio of non-performing exposures (NPEs), which includes non-performing loans (NPLs) and other credit likely to turn bad, edged lower to 38.9% from 40.9% in December. Its provisions for credit impairments rised by 70% quarter-on-quarter to €103 million.

Original Story:Reuters | Lefteris Papadimas 
Photo: National Bank of Greece
Edition:Prime Yield

Banks to cut up staff in 2019 as NPL sale slashes assets

The reduction of Greece’s banks NPL stock is also leading to shrinking of the credit system’s assets and followed by reduction on the banks staff, according to the online newspaper Ekathimerini.

The total assets of Greece’s four systemic banks reached 225 billion euros in end-2018, 60% of which consisted of loans to businesses and households. This is due to come down by some 50 billion euros, which is the target for the reduction of bad loans by 2023.

The banks’ aim, therefore, is not only to slash their bad-loan stock but also to reduce the staff employed in managing those loans. This effort will also take place at the group level, through the divestment from activities that are not at the core of banks’ purview, as well as by ceasing certain activities abroad.

At its peak in 2008, the number of employees in the Greek banking sector exceeded 66,000. Last year this figure (including non-systemic banks) dropped to 39,380 people, a reduction of 26,780, or over 40%. The number of branches shrank by over 51% in a decade, from 4,097 in 2008 to 1,979 in 2018.

The reduction of staff has been much faster in the last few years than the diminishing of the system’s assets, because banks were slow in relieving their books of nonperforming loans.

The size of the banking system in the next few years will depend on the growth of the Greek economy, but in any case, digital banking is set to change its structure and operation as well.

After a voluntary redundancy program in 2018 that led to 2,582 fewer bank jobs in Greece, estimates for this year speak of a reduction in staff by up to 4,000 people. Banks’ initiatives for the reduction of their employees will not be confined to voluntary exit programs, which are set to see some 1,500 staff depart. Even greater staff cuts are expected – by up to 2,500 people – through the transfer of the management of NPLs to investment entities, with a parallel transfer of employees.

National Bank is due this week to present its transformation plan, a key dimension of which is the reduction of its staff by 2,000 by the end of the year.

Original Story:Ekathimerini | Evgenia Tzortz
Photo: Bank of Greece
Edition:Prime Yield

 

Investors eye holdings in domestic REICs

The managing officers of real estate investment companies as well as foreign funds exploring the Greek market in search of opportunities have their eyes fixed on the real estate assets in the portfolios of secured nonperforming loans that were sold last year.

According to Kathimerini news, preliminary talks for the gradual sale of properties from those portfolios have already started, as the special administrators have made progress in settling a number of pending issues in order to make the transfer feasible.

It is reminded that two portfolios of loans secured on real estate collateral were sold over the course of 2018, for about €770 million. These were the “Amoeba” package by Piraeus Bank, and Alpha Bank’s “Jupiter” package. The cost of the former came to €432 million for buyer Bain Capital, while the latter fetched €337 million from Apollo Global Management.

The real estate assets of the above property packages comprise more than 140 hotel units, worth a total of more than €282 million, which are expected to come into high demand, regardless of whether they are sold off individually or as portfolios.

However, according to property market professionals, there is even greater interest in the way that the properties from the bad-loan packages will be sold.

According to well-informed sources, both Bain Capital and Apollo Global Management are likely to invest directly in a real estate investment company (REIC), in which they plan to bring property assets they have acquired in exchange for a certain number of shares in that company.

In that context, Piraeus Bank’s intention to concede the 39.4% stake it continues to control in Trastor REIC is seen as a springboard for developments in the immediate future. Certain negotiations to that effect have already taken place since the end of the last year, though without any positive conclusions having been reached so far.

Another real estate investment company that is likely to be open to such discussions is Trade Estates, an REIC founded by the Athens-listed Fourlis group whose establishment will have been completed by this fall. The new company has already been endowed with a particularly significant portfolio of properties, all of them of the Fourlis group, with a total value of €176 million.

Nevertheless, the Greek company’s management intends to enrich its asset portfolio further. It is therefore planning to reach out to companies active in the property management sector, and likely with funds too, in order to find co-investors.

The company aspires to evolve into the biggest real estate investment firm in the country in terms of commercial property concentration.

A good illustration of the significant demand being seen from institutional investors, such as real estate investment companies, as well as foreign funds, is the fact that some €300 million have been placed in the acquisition of income properties, such as office blocks and commercial stores, in the first quarter of this year alone.

This amount constitutes a historic high for the sector in a period of just three months, taking into account that as a rule such sums used to be invested in the Greek market over the course of an entire year and certainly not in just a single quarter.

The biggest transaction in terms of value concerned the acquisition of four hypermarket properties of the Sklavenitis supermarket chain by Grivalia Properties REIC. The Athens-listed company carried out the investment, which was worth around €119 million and is set to be officially completed over the next few weeks, before becoming a part of the Eurobank group.

Trastor Properties REIC was also particularly active in the first quarter of this year, as it invested a sum of €46 million, against a total of €38 million over the entire course of 2018. This amount went to the buyout of a series of office buildings, and of a store on Voukourestiou Street in the upscale downtown Athens district of Kolonaki.

Trastor’s biggest transaction this year concerns the portfolio acquired by Argentinian group Grupo Dolphin SA in Greece a few year ago. The portfolio in question, whose final price came to €27.8 million, contains four commercial properties in the Attica area.

Besides this transaction, Trastor has also obtained an office complex that had previously belonged to Prometheus Gas of the Copelouzos group and is located at Paradeisos in Maroussi, north of the capital. The cost of that transaction came to an estimated €12 million.

Likewise, Brook Lane Capital is in the process of completing investments that are expected to reach up to about €110 million. The biggest move in this direction has concerned winning a tender by Alpha Bank for the portfolio of five office buildings, mainly consisting of properties that used to belong to the now-defunct Babis Vovos construction company. Brook Lane Capital has paid Alpha the sum of €95 million for this portfolio.

Original Story: Kathimerini | Nikos Roussanoglou 
Photo: Photo by Markellos P. from FreeImages
Edition:Prime Yield

NBG to securitise €3 billion of NPL by 2022

Greece’s National Bank (NBG) plans to securitise €3 billion of non-performing mortgage loans (NPL) by 2022, its chief executive said, as the country’s lenders battle to deal with a legacy of bad debt.

Non-performing exposures (NPE) in the Greek banking sector totalled € 81.8 billion in December, which at 46.7% of their loan books is the euro zone’s highest.

The government and central bank have come up with more radical initiatives involving securitisations as the urgency for Greek banks to slash their soured loans rises.

Presenting the 2019-2022 strategy of the country’s second-largest lender, Chief Executive Paul Mylonas told a news conference that NBG also plans to sell 3 soured loans portfolios within 2019.

NBG said that it aims to reduce its non-performing loan portfolio to around 5% of total loans by 2022, from 41% at the end of 2018.

This target does not take into account the possible inclusion of its soured loans into two different schemes that Athens and the central bank have been working on, Mylonas said.

One plan to solve the problem is an asset protection scheme (APS) that was put together by the finance ministry and the country’s bank rescue fund HFSF, which holds stakes in Greek banks after taking part in three recapitalisations.

It involves special purpose vehicles (SPVs) that would issue bonds with a government guarantee for senior tranches, similar to a model known as GACS which has been tried in Italy.

A second plan proposed by the Bank of Greece is a scheme to have banks transfer NPEs to an SPV, aiming for a single-digit NPE ratio within two to three years.

Banks would transfer a portion of NPEs and deferred tax credits to an SPV that would fund the transfer with securitisations.

Under an EU-approved restructuring plan to divest non-core assets, NBG twice failed to sell a 75% stake in its wholly-owned insurance unit last year.

Mylonas recently said that NBG will start talking to potential investors for the sale of its insurance business soon. «We have an obligation to sell it by 2020,» he said. Asked if there was serious interest in the unit at the moment, Mylonas said “no”.

Original Story: Reuters | Lefteris Papadimas
Photo:Photo by Michalis Famelis / Wikimedia Commons
Edition:Prime Yield

Many Greeks still struggle to claw out from mountains of debt

According to many investors, Greece is in the midst of a supercharged recovery after being the euro debt crisis’s poster child and suffering under years of recession and austerity. But many Greeks are not buying the turnaround story…

By many measures Greece has turned a corner: Its stock benchmark has jumped 26% in 2019, set for its best first half in two decades, and trumping European shares’ 8.1%  gain. Last year, the country recorded the strongest economic growth since 2007. Greece’s 10-year bonds yield 3.3%, a fraction of the 37% the country had to pay at the height of the financial crisis.

For all that, many Greeks are still struggling to claw out from under mountains of debt after a decade during which the economy cratered, contracting by more than a quarter. The country’s unemployment rate of 18.5% is still among the highest in the European Union.

Since the start of the financial crisis in 2010, more than 87,500 small and medium-sized businesses have folded, while personal disposable income has shrunk by 14.5%, national statistics show. About 4 million taxpayers, or about 37% of the population, owe the state €104.4 billion in back payments—more than triple the arrears in 2010 of €32.5 billion.

Many Greeks are exhausted and are no longer putting up a fight to preserve their assets. With cases winding their way through Greek courts, which can take years, many people who were once determined to protect their properties, have seen the ceaseless pressure take its toll, said Dimitris Anastasopoulos, a lawyer who handles cases to stop banks from taking over primary residences.

Borrowers feel harassed, with the collection agencies calling them on a daily basis, Anastasopoulos said to Bloomberg.

Repossession of Greek homes, which was unheard of, is becoming more prevalent as banks themselves face pressure to slash bad loans. Bank non-performing exposures stand at €81.8 billion, or almost half of the country’s gross domestic product. They are the biggest drag on the Greek economy.

Faced with an election year, the government of Prime Minister Alexis Tsipras is seeking to help protect primary residences. At the end of March, parliament voted a primary-residence protection framework after a long-drawn dispute with the country’s creditors over the eligibility criteria.

Distressed home owners can apply for help, and if they meet the criteria, banks will restructure the loan with the state subsidizing a part of the installments and the borrower having to repay the rest without any new delays.

The new framework covers bad loans worth around €25 billion, based on data from the Hellenic Bank Association. Of that, the trade body expects about €10 billion—corresponding to around 160,000 debtors—to use the new legislation and eventually some €5 billion may be restructured and turned into performing loans.

If the estimates are right, the new plan will help both borrowers and lenders. Greece’s creditors and the European Central Bank have identified the reduction of bad debt as the country’s top priority.

Looks Ambitious

Greek banks are auctioning off repossessed residences to clean up their balance sheets but so far the main buyers of these properties have been the banks themselves—with few other bidders emerging. In 2018, some 10,000 properties, or about 85% of the ones put on the block, were bought by the banks. Lenders estimate they’ll buy back some 15,000 homes this year.

While the government is diving in to try and help, for some that aid is coming too late.

Original Story: Bloomberg | Antonis Galanopoulos and Sotiris Nikas 
Photo: FreeImages.com/Takis Kolokotronis
Edition:Prime Yield

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