National Bank of Greece has reached an agreement to sell a portfolio of non-performing (NPL) shipping loans with an aggregate face value of €262Mn to investment funds advised by Cross Ocean Partners. 

In a note, the lender explained «the transaction is being implemented in the context of NBG’s NPE reduction strategy». In the same statement is said that the sales price is about 50% of the portfolio’s worth on the balance sheet and would have a «marginal» impact on the bank’s capital.

A source with knowledge of the transaction told Lloyd’s List that the agreed portfolio comprises about a dozen individual loans including some coastal ferry lending, but the majority relate to oceangoimng dry bulk and tanlker business, the source said.

Servicing of the loans is expected to be assigned to QQuant Master Servicer, which is licenced by the Bank of Greece as an independent specialist in servicing of non-performing Greek debt.

Recent research put the bank among the top 10 lenders to the Greek shipping industry.

Cross Ocean Partners, led by ex-Bank of America Merrill Lynch managers Graham Goldsmith and Steve Zander, was set up in 2015 with backing from US-based private equity firm Stone Point Capital. 

Nat West Markets acted as financial advisor on the sale while NBG retained Watson Farley & Williams as legal counsel.

Original Story: Loyds List | Nigel Lowry 
Photo: Photo by Michalis Famelis / Wikimedia Commons
Edition: Prime Yield

The stockpile of Nonperforming Loans (NPL) in the European Union has halved since 2015, but, and even though all the progresses, remains hefty at lenders in Greece and Cyprus, according to the latest data released by the bloc’s banking watchdog.

The volume of NPLs across EU banks has fallen from €1.15 trillion in June 2015, when they were 6% of total loans, to €636 billion or 3% by June 2019, according to the European Banking Authority (EBA). It looked at a sample of 150 banks that account for over 80% of the sector’s total assets.

The overall drop was due to regulatory intervention, «political determination» to tackle the problem properly, and the boost from economic growth and low interest rates, EBA said.

While the average level of NPLs for the bloc has halved, some countries remain at a high level as they try to tackle a stubborn legacy of NPL stockpiles.

Greece’s NPL ratio was 39.2% in June this year, with Cyprus at 21.5%. Five other countries were above 5%, Portugal included. In 2015, 10 EU countries reported double digit NPL ratios.

Italy recorded the biggest drop, down €145 billion in over the four years, followed by €81 billion in Spain, €60 billion in Britain, and €43 billion in Germany.

Poor loans now account for nearly 8% of Italian loans, down from nearly 17% in June 2015.

«There are significant ongoing initiatives that aim to further boost the reduction of legacy assets both at European level and in specific countries,» the EBA statement said.

As the economy weakens, banks should closely monitor the quality of assets on their books to actively manage their NPLs, it added. 

Original Story: Reuters | Huw Jones
Photo: FreeImages.com / Jonte Remos
Edition: Prime Yield

Since beginning the sale of coveted “Golden Visas” that come with residency permits and European Union passports, Greece has peddled off 4,154 to wealthy foreigners while even members of the Diaspora often have to wait a year or longer for papers allowing them to live in the country.

That covered up to the end of March this year in a program where Greece – which has among the lowest eligibility limit – granted the visas to people investing at least €250,000 in property or other means.

Most of that has come in the purchase of apartments and homes for sale cheap during a nearly nine-year-long economic crisis, with many of them turned into short-term rentals like Airbnb, emptying whole neighborhoods in Athens of long-time residents and driving up rents to prohibitive limits.

The Golden Visa property purchasers don’t have to live in the units they buy and the Paris-based Organisation for Economic Co-operation and Development (OEC) said the schemes, that run in many European Union countries, are also being used by criminals to launder money and get passports allowing them to move freely around the bloc.

Visas can also be bought outright, with criticism there’s no vetting of applicants, by investing in Greek securities, such as shares of ATHEX-listed companies, Greek state bonds or with money deposited in Greek banks.

In 2018 alone, 1,399 such long-term residence permits were granted, the business newspaper Naftemporiki said in a report. Including dependents, the program numbers 11,445 people with Chinese nationals receiving 2,416 since the program began, followed by Russians and Turks.

Original Story: The National Herald 
Photo: FreeImages.com/ Toomas Järvet
Edition:Prime Yield

Themass sale of properties by banks is getting under way with Eurobank’s initiative for the concession of two major real estate owned (REO) portfolios with a gross nominal value of €120 million, ekathimerini.com reports.

Named “Opus” and “Star”, these portfolios contain residential andcommercial assets, and their progress will be the initial test for the market of major real estate managers.

“Opus” consists of 258 commercial assets with a gross value of €88 million euros, including offices, stores, industrial properties and warehouses, among others; of which 58% located in the Attica region. The bank has opened the data rooms for the package and nonbinding bids are expected by the end of the month.

“Star” consists of 685 properties, chiefly residential but also some that are commercial. Half of those assets are located on the Greek mainland outside the areas of Attica and Thessaloniki, and bids are expected by end-April.

Against the backdrop of a stable real estate market with some signs of price recovery, Eurobank’s move represents the first attempt at the mass liquidation of assets that are not associated with loans and are in the bank’s full ownership. It remains to be seen whether the fragmented Greek real estate market can attract the interest of major investment funds that might be interested in the group utilization of those assets mainly for tourism purposes through short-term rentals, the acquisition of the Golden Visa residence permit, or for use by students.

Eurobank’s initiative forms part of local banks’ efforts to rid themselves of the massive stock of properties in their ownership, and is an indispensable part of the plans for the reduction of nonperforming exposures submitted to the European Central Bank’s Single Supervisory Mechanism (SSM) through the next three years.

Original Story:Tornos News | News
Photo: Eurobank site
Edition: Prime Yield

Greece’s mortgage credit market is expected to recovery along this year, after several year of very low levels of activity. The major banks forecast a 30% growth rate in the new credit concession in 2019.

This comes after a 20% rise in the demand of new mortgage last year, with banks granting €320 million to home purchase in 2018, a figure that compares with the €260 million in new mortgage credit granted in the previous year.

According to bank numbers, the average mortgage loan amounted to €70,000 euros last year, while new issues are now made on stricter terms than in the past. A necessary condition is the borrower’s participation in covering at least 25% of the cost of the property acquired. The borrower’s contribution largely dictates the interest rate level, ranging from 4% to 5.5% for the purchase of a house, while for repair loans that are not secured against the property the rate ranges between 7% to 8%..

The state subsidy program Saving at Home (Exoikonomisi Kat’ Oikon) provided a further boost to the housing loans market last year, as banks disbursed an additional €40 million through the scheme, raising the total amount of new loans in the housing sector to €360 million.

Naturally, these figures are nowhere near the past highs recorded in this market, when bank funding powered the economy. However, the return of the credit sector to funding residential property purchases is generating optimism regarding both the increase in bank activity and the strengthening of the credit sector’s interest revenues, which in recent years had been in constant decline.

This improvement comes in the context of the property market recovery during the last couple of years, which Moody’s said will continue for at least the next 12 to 18 months.

In 2018 house sale prices rose 1.5% y-o-y in Greece. This was attributed to the increased flow of foreign investment and the improving macroeconomic environments. Moody’s added that this is also positive for the valuation of Greek bonds, banks and loans secured against real estate. The rise in real estate values is also set to offer borrowers additional incentives to refinance their mortgage loans, Moody’s estimated.

Original Story:Tornos News
Photo: FreeImages.com/Jonte Remos
Edition:Prime Yield

Greek banks’ full repayment of emergency liquidity assistance (ELA) drawn from the domestic central bank is credit positive as it reduces their funding costs, ratings agency Moody’s said in a credit outlook report.

Greek banks’ outstanding ELA balance was around €1.0 billion at the end of December, or about 0.4% of the banking system’s total assets, down sharply from a peak of €86.8 billion reached in June 2015 at the height of the debt crisis.

Deleveraging, coupled with the gradual return of deposits, helped banks improve their funding profile, allowing them to fully repay the emergency funds they borrowed from the Bank of Greece over the past three and half years.

«Without their dependence on ELA and given the sustainable improvement in liquidity conditions, Greek banks will likely attract greater interest from international unsecured bond investors,» Moody’s said.

It said Greek banks were also able to repay the ELA balance by increasing their interbank repo transactions as international banks’ appetite for Greek assets gradually increased over the last years.

The ELA repayment helps to strengthen depositors’ confidence in Greek banks, allowing them to attract more deposits. Between June 2015 and February 2019, private-sector deposits rose by about 8% as market sentiment, economic activity and employment began to improve.

More expensive than borrowing from the European Central Bank, the ELA’s full repayment helps lenders to diversify their funding mix.

«Greek banks started issuing covered bonds as an alternative source of funding to repay their ELA balance amid increased appetite among international investors for Greek banking risk,»the report said.

National Bank was the first of the large Greek banks to fully eliminate its ELA exposure in December 2017, followed by Piraeus Bank in July 2018.

Last month Alpha Bank told investors it had fully eliminated its ELA in February as did Eurobank. The two lenders were the last of Greece’s four big banks to fully eliminate their emergency borrowing from the Bank of Greece.

Much smaller Pancretan Cooperative Bank fully repaid its ELA exposure in August 2017, while Attica Bank repaid its exposure in the second half of March this year, Moody’s said

Original Story: Reuters | George Gerogiopoulos
Photo: Bank of Greece
Edition:Prime Yield