After a pile of new nonperforming loans (NPLs) worth almost €5 billion emerged in 2021, Bank of Greece increased its concerns regarding the creation of new generation of bad loans this year after the outbreak of the geopolitical and energy crisis.

Addressing the 4th NPL Summit by ethosEvents, Bank of Greece Deputy Governor Christina Papaconstantinou noted that the first signs show that “we have new flows of NPLs and an increase in arranged debts,” This warning came ahead of the definitive withdrawal of the pandemic support measures for borrowers within 2022.

“This impact cannot be assessed with precision yet, but it does constitute a cause for concern, especially if the geopolitical crisis lasts for long or grows bigger,” she stated, noting that “no complacency is allowed.”

A similar concern emerged at the same conference from the chief executive officer of doValue Greece and president of the association of servicers, Tasos Panousis: He noted that “the crisis is calling on us to act before developments overcome us and we see new defaults.” He then stressed that “the companies managing loans worth €123 billion will have to double their efforts so as not to see the securitization plans derailed.”

The first worrying signs came in 2021, when, despite the overall reduction in the stock of NPLs in banks’ portfolios, new bad loans amounting to €4.2 billion were created, an amount that grows to €5.3 billion when interest is included, according to the central bank.

As the Bank of Greece notes, “during 2021 the loans shifting from performing to nonperforming were greater by €823 million than those moving the opposite way.”

At the same time a significant deterioration has also been recorded in some other key indexes in the industry, such as the index of uncertain collection, which reached 35.5% of all loans at end-2021, up from 29.4% at end-2020, and the index of loans delayed for more than 90 days, which climbed to 31.1% from 23.3% respectively.

Original Story:  Ekatemerini | Evgenia Tzortzi
Photo: Photo by Magda S in FreeImages
Edition: Prime Yield  

Piraeus Bank reported a sixfold jump in first-quarter net earnings from last year’s fourth quarter, boosted by strong trading income.

Greece’s fourth-largest lender by market value reported net profit from continued operations of 521 million euros after a profit of €78 million in the fourth quarter of 2021.

The bank had lost €404 million in the first quarter of 2021.

Trading income was boosted by one-off gains booked in its sovereign bond portfolio and other transactions, Piraeus Bank said.

Net interest income fell 10% quarter-on-quarter to €286 million, affected by the bank’s accelerated balance sheet bad loan cleanup.

Excluding forgone income from so-called nonperforming exposures (NPEs), net interest income reached €246 million in the first quarter and was up 11% year-on-year, the bank said, supported by an expansion of its performing loan book.

Chief Executive Christos Megalou said he was confident about meeting business plan targets. 

Original Story: Ekatemerini | Evgenia Tzortzi
Photo: Piraeus website
Edition: Prime Yield

The Greek state and the Hellenic Bank Association will operate an e-platform to follow up on and evaluate investment plans, Alternate Finance Minister Theodoros Skylakakis said at the Delphi Economic Forum.

Skylakakis also said that any adjustments to the Recovery Fund due to changes in investment plan costs affected by the energy crisis and inflation will be limited.
The Recovery Fund was designed with conditions of crisis in mind, he added, therefore nearly half the plan is not affected by the current circumstances, while the rest will be subjected to small adjustments. As a result, the overall planning, purpose and works submitted will not be affected, while the categories in the Fund related to green transition and energy investments will be accelerated.

Original Story: Helenic News of America | News 
Photo: Photo by Jonte Remos on FreeImages
Edition: Prime Yield

The Bank of Greece will operate an online platform allowing for the digital submission of all loan settlement applications to banks and servicers, through the Code of Ethics on debt arrangement.

The central bank will attempt via this code to put in order the settlement procedures, mainly by debt management companies that have received a significant portion of the private arrears. This way it will introduce standardized procedures that can will monitor closely, along with examining complaints submitted by debtors.

That should put an end to the problems reported in the efforts to have debts settled between debtors and creditors, leading to imperfect arrangements and delays in the process to find an agreed solution. On several occasions debtors submit proposals based on their repayment ability as their disposable income points to, and not based on the property assets they own because they do not know (and no one explains to them) that the minimum tranche is determined by the value of the properties their loans are secured against.

Sources add that filling a Code of Ethics application is fairly complicated, requiring multiple documents and data from authorities.

Original story: Ekathimerini | Evgenia Tzortzi 
Photo: Big Stock Photo
Edition: Prime Yield

Piraeus Bank, Greece’s fourth largest lender by market value, agreed to fully acquire investment firm Iolcus for about €10 million to boost its fee-generating pools.

Set up in 2011, Iolcus manages the Apolis alternative investment funds and portfolios for private and institutional investors and has €1.0 billion in assets under management.

“The transaction will further diversify our fee revenue pools and deepen our know-how around the expanding asset management business in Greece,” Piraeus CEO Christos Megalou said.

Grant Thornton advised Piraeus Bank on the deal.

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

Greek banks are well positioned to deal with any new bad loans that develop this year, after significantly improving their asset quality in 2021, rating agencies say.

Greece’s aggregate non-performing loan (NPL) ratio fell to 18.65% in the third quarter of 2021, the latest period for which data is available, according to the European Central Bank. This is down from 32.92% in the third quarter of 2020, and much nearer to the ratios for other Southern European economies such as Cyprus and Portugal. Greece’s NPL coverage ratio rose on a yearly basis to 47.45% in the third quarter of 2021, from 45.04% a year before.

Any increase in new non-performing exposure, or NPE, inflows should be manageable for the big Greek banks and cost of risk should fall, DBRS Morningside Vice President Andrea Costanzo wrote in a March 23 note. NPEs include “unlikely to pay” loans in addition to loans of more than 90 days past due.

Less risky balance sheets and better internal capital generation should support banks’ capitalization, Costanzo said.

Piraeus Bank SA, Alpha Services and Holdings SA, National Bank of Greece SA and Eurobank Ergasias Services and Holdings SA are set to reduce NPEs and loan loss provisions in 2022, and to keep a tight grip on costs, S&P Global Ratings said in a March 28 report. This will probably allow NBG and Eurobank to reinstate dividends from 2022 earnings, and Alpha could follow a year later, Ratings said.

The four banks’ long-term deposit ratings were upgraded by rating agency Moody’s on March 30, driven by better asset quality and improved operating conditions, among other factors. The banks are likely to further improve their credit profiles over the next 12 to 18 months and are well positioned to tackle any new bad loans.

The war in Ukraine could indirectly slow the Greek banking sector’s recovery through inflation, less tourism spending and greater investor risk aversion, Ratings said.

Falling NPL ratios

Alpha and Piraeus sharply reduced their problem loans as a proportion of gross customer loans between the fourth quarter of 2020 and the final quarter of 2021, according to S&P Global Market Intelligence data. Alpha’s declined to 6.15% from 30.15%, while Piraeus’ dropped to 8.47% from 34.51%.

lpha Bank completed €16 billion of disposals and securitizations of nonperforming exposures in 2021, and began ramping up domestic lending significantly in the final quarter, following a decade of deleveraging, the bank said.

Piraeus’ sale of NPLs through securitization also helped bring down the sector’s bad loan stock. Both Alpha and Piraeus made use of the government-backed Hellenic Asset Protection Scheme, or HAPS.

The NPL clean-up led to a €2.9 billion loss at Alpha in 2021, compared to profit of €104.0 million in 2020. The accelerated de-risking also put pressure on Piraeus’ net interest income, which fell to €318 million in the fourth quarter of 2021, from €1.49 billion a year before.

Alpha Bank told Market Intelligence that it aims to reduce its NPE ratio to 7% at the end of 2022, from 13% at the end of 2021. Eurobank said it expects to cut its NPE ratio to 5.8% in 2023, from 6.8% in 2021.

Piraeus Bank and National Bank of Greece did not respond to a request for comment.

European banks still face risks amid the phaseout of state pandemic-related measures and Russia’s invasion of Ukraine, which could place pressure on asset quality, Bank of Greece Governor Yannis Stournaras said in a March 22 speech.

Original story: S&P Market Intelligence Global  News | Rhema Penaflor, Marrissa Ramos 
Photo: Website Bank of Greece
Edition: Prime Yield

Greece’s banks and bad-loan servicers are on alert regarding the behavior of loans that have entered a government support program that subsidizes the monthly instalments, in order to prevent a new generation of nonperforming loans (NPL).

This concerns the Gefyra 1 program, which provides for the subsidization of loans secured against a borrower’s main residence. Some 82,000 debtors have joined it, with total dues of €6 billion. The state subsidization has been gradually coming to an end since the start of the year, depending on the time of entry into the program.

There is also a similar worry over the 13,000 enterprises that have debts of €5.4 billion and have joined the Gefyra 2 program; their subsidies will end within the year’s first half. Therefore, a sum of €11.4 billion of credit is about to come out of state support.

Addressing the last edition of Fin Forum, National Bank Director General for Corporate and Retail Banking Loan Management Fotini Ioannou noted that banks have not had any indications of delays to date; however, uncertainty from both geopolitical developments and the reduction of disposable incomes due to soaring energy costs and rising inflation requires caution in order to prevent the forfeiture of those obligations.

There were similar concerns expressed by the president of the servicers’ association and chief executive at doValue Greece, Tasos Panousis: He explained that these loans are under close monitoring by servicers, as installments for the servicing of those loans will soon burden only the borrowers.

Kathimerini data show that 67,000 debtors in the Gefyra 1 program have already lost state support, and depending on whether their loan was performing or not, they will have to pay the entire tranche each month out of their own pocket for the next six to 18 months; otherwise, they will have to return the subsidies received to the state.

There is a similar clause for the enterprises that entered the Gefyra 2 program, a provision that bank officials say will serve as an incentive against delays in the repayment of those loans.Ioannou noted that as “Greek banks have set as a target an NPL index below 10% by end-2022, the start of the new bankruptcy code is a significant parameter.”

Original Story: Ekathimerini | Evgenia Tzortzi 
Photo: Photo by Takis Kolokotronis in FreeImages.com
Edition: Prime Yield

The battle for the “Ariadne” nonperforming loans (NPL) portfolio is going to be fierce and involves some major names, according to some Greek press.

The bad-loans package that PQH has put up for grabs – with an accounting value of €5.2 billion – has led to important alliances, as the consortiums of Bain with Fortress and doValue on the one hand, and of Davidson Kempner with Cepal on the other, have now tabled a joint bid.

Offers were submitted last week, Kathimerini understands, and the joint bid must rival that by Intrum, which has entered the running in cooperation with Cerberus, according to the same sources.

The coalition of the biggest funds that are active in Greece is explained by the fact that “Ariadne” is the biggest loan portfolio that has ever been put up for sale in the country, and its acquisition would require sizable funds from candidate buyers. 

Notably, the nominal value of this NPLs package, i.e. the requirements with the interest, add up to some €13.9 billion.The main reason that competition is so fierce for this portfolio is that its loans are secured on properties worth a combined €7.4 billion, which is why the starting price PQH has set is close to €800 million, according to sources.

Original Story: Ekathimerini | Newsroom 
Photo: PQH Linked In
Edition: Prime Yield

The annual growth rate of total credit extended to the domestic economy stood at 9.9% in January 2022, compared with 10.2% in the previous month, the Bank of Greece said.

It also said the annual growth rate of total deposits stood at 8.1%, compared with 8% in the previous month, and deposits placed by the private sector decreased by €2.232 billion in January 2022, compared with an increase of €4.26 billion in the previous month.

The central bank reported that the monthly net flow of total credit was positive by €1.52 billion last month, compared with a negative net flow of €1.5 billion in the previous month. In January, the monthly net flow of credit to the general government was positive by €2.8 billion, compared with a negative net flow of €3.416 billion in the previous month; the annual growth rate decreased to 32.7% from 33.4% in the previous month.

The annual growth rate of credit to the private sector decreased to 0.9% from 1.4% in the previous month.

The monthly net flow of credit was negative by €1.3 billion, compared with a positive net flow of €1.92 million in the previous month.

Original Story: Ekathimerini | Newsroom 
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Edition: Prime Yield

Large property portfolios, with a total number of more than 3,000 assets and valued at more than €1.5 billion, are about to change hands through deals in the local market, driven by the aim of banks to rid their financial figures of their burden and to boost revenues.

They concern properties lenders have obtained by way of auctions in the last couple of years and whose sale they are now considering, either directly to interested investors or through their real estate management subsidiaries.

In the next few weeks Alpha Bank will choose its preferred investor for the sale of a property portfolio worth over €500 million, combined with the transfer of its Alpha Astika Akinita subsidiary. This is the so-called “Project Skyline,” which has attracted four suitors: Prodea Investments with parent company Invel, the Dimand Real Estate-HIG consortium, and investment funds Brook Lane Capital and Davidson Kempner.

Their interest mainly regard the assets to be transferred to Alpha Astika Akinita, which the bank will concede and hold on to a minority stake in. They include some 50 top-quality properties valued at about €280 million, such as the landmark Alpha building on Aiolou Street in Athens.

The investor to be chosen will control both the majority and the management of Alpha Astika Akinita, introducing a business plan to be agreed on in the context of the tender.

Piraeus Bank’s “Project Terra” is even greater in value: The process that started last fall has just entered its second stage, pertaining to the transfer of approximately 2,300 properties with a total value in excess of €800 million, the biggest realty portfolio to change hands in Greece. The package incorporates 125 assets that Piraeus Bank itself uses and have a combined value of €307 million.

National Bank is also planning to sell a package of properties valued close to €100 million over the next few months. The market expects this portfolio to concern mainly residential and possibly some commercial assets, although no final decision on the portfolio has been made yet.

Original Story: Ekathimerini | Nikos Roussanoglou  
Photo: Site Alpha Bank
Edition: Prime Yield

Funds that have acquired Greek bond portfolios are now the main drivers of property auctions, taking over from banks, with over 70% of assets scheduled to go under the hammer within 2022 via the e-auction platform having various funds as their sellers.

Data from the online platform of notaries reveal that the landscape has change concerning the sellers at auctions in favour of the special-purpose vehicles with various exotic names (Cairo, Galaxy, Sunrise, Vega, Pillar, Mexico, Orion etc.), pointing to securitizations and sales of bad loans by banks in recent years.

Data compiled by Kathimerini, based on the processing by the iMEDd Lab, show that funds are behind 70.7% of the online property auctions planned for 2022 in Greece. There are over 9,900 auctions listed on the platform for the entire 2022, and the list is growing every week.

Until recently, banks were behind up to 84% of auctions, but their share has now gone down to just 22.2% for this year. Another 7%, approximately, concerns private owners or other corporations.

The dominance of funds also changes the policy in the domain of auctions, which will constitute a vital instrument for “Hercules” to meet its targets. This is the state mechanism that has guaranteed a significant share of the revenues from the securitizations that banks have implemented.

Kathimerini understands that the business plans funds have submitted to the state for it to supply state collateral for the securitizations provides for 40%-50% of the takings of funds to come from real estate asset liquidation. That makes auctions a priority for the new owners of the bad loans in order for the business plans to be executed and the state collateral activation to be averted.

Contrary to banks’ policy in recent years, with lenders pressuring borrowers by buying back 80%-90% of the assets the banks themselves had put up for auction, the funds seek the genuine resale of those properties to third parties.The funds only buy back certain properties that are particularly popular for commercial purposes and can secure even higher prices later on. However, their main strategy is far from buying back the assets they auction, as they prefer to collect as much money as possible from the first stage and achieve their targets.

Original Story: Ekathimerini |EvgeniaTzortzi 
Photo: Photo by Jason Morrison in FreeImages
Edition: Prime Yield

All four Greek systemic banks will have attained the goal for the reduction of their nonperforming loans (NPL) below 10% by the end of this year: Eurobank already reached it at the end of 2021, Alpha Bank and National Bank should make it by the end of the year’s first half and Piraeus will achieve it by year-end.

Toward the end of 2021 banks accelerated their efforts to reduce their NPL pile, summarily executing transactions worth a total of €25 billion through securitizations and sales of portfolios, though they still have quite a way to go before they hit the European average.

Even if the business plans for the full streamlining of banks’ fundamentals are adhered to perfectly, the average level of the NPL index in 2022 for the four main lenders will be three times the European average, which according to the latest European Banking Authority (EBA) data for the first half of 2021 amounts to 2.2% of all loans.

Greek lenders also have a significant share of their serviced loans portfolio (estimated at €8-9 billion) relying on state support programs (Gefyra 1 and 2); therefore, according to the supervisory authorities, the impact of the pandemic is not yet reflected in their fundamentals.

Banks estimate that the conditions set for the concession of state collateral ensure that those loans continue to have serviced status in the medium term. The prevailing sense is that these loans will not leave behind them the effects seen in the previous crisis, in the 2010s; this is because the commitments corporations and households have made, as provided for by the Gefyra 1 and 2 programs, force them to remain consistent in their obligations to service their debts for at least one year after the expiry of the subsidy they receive from the state. Otherwise, they will have to return to the state the subsidy they have benefited from and lose the advantage they enjoy from these programs.Nevertheless, given the persistence of the coronavirus pandemic, the possibility of at least a part of those loans turning bad cannot be ruled out, though that would constitute a step backward for banks. This risk could force them to make additional provisions within 2022, depending on the course of the pandemic and the economy, undermining the effort to keep the NPL rate in the single digits and to support earnings.

Original Story: Ekathimerini |EvgeniaTzortzi 
Photo: Photo by Jonte Remos in FreeImages
Edition: Prime Yield

Piraeus Bank announced it had reached a deal to sell a portfolio of nonperforming shipping loans (NPL) to an entity affiliated with Davidson Kempner Capital Management. 

The agreed price will be about 53% of the portfolio’s gross book value of €400 million, the bank said. 

The sale of the portfolio, dubbed project Dory, is subject to approval by the Hellenic Financial Stability Fund, a shareholder in Piraeus Bank, the lender said. 

The transaction will reduce Piraeus Bank’s ratio of non-performing exposures to about 15% from 16% at the end of September 2021 and increase its NPE coverage ratio to about 40% from 39%. 

The sale’s expected capital impact will be around minus 20 basis points versus the bank’s end-September total capital ratio.

Original Story: Ekathimerini |Newsroom 
Photo: Piraeus Bank website
Edition: Prime Yield

Piraeus Bank has sold a portion of its securitized bad loans (NPL) to Intrum and Serengeti Asset Management as part of efforts to clean up its balance sheet.

The transaction is part of Piraeus Bank’s so-called Sunrise transformation program announced in March and follows the closing of its €7.2-billion Sunrise I securitization.

Piraeus, one of the country’s four largest banks, said it had sold 44% of the mezzanine notes of its Sunrise II securitized bad loans to Intrum and 7% to Serengeti Opportunities Partners.

The Sunrise II portfolio comprises about 47,000 retail and corporate loans with a gross book value of €2.7 billion.

When it announced the deal in early November, Piraeus said the implied valuation of the sale, based on the nominal value of the senior notes and proceeds from the sale of the mezzanine and junior notes, corresponded to 47.4% of the portfolio’s gross book value.

Goldman Sachs Europe and Alantra CPAI acted as arrangers and financial advisers to Piraeus, which aims to achieve a single-digit nonperforming exposure ratio by early 2022.

Piraeus Bank will retain 5% of the mezzanine and junior notes of the Sunrise II securitization in line with relevant regulatory requirements, and all of the senior notes.The bank said the capital impact of the sale represented a 50-basis point boost to its total capital ratio in September.

Original Story: Ekathimerini |Newsroom 
Photo: Piraeus Bank website
Edition: Prime Yield

Waterwheel Capital Management has joined doValue’s portfolio of clients through the completion of the €3.2 billion (bn) Project Mexico HAPS securitisation in Greece.

Founded in November 2017, Waterwheel Capital Management is a US based institutional investor focused on targeted investment opportunities, and currently concentrated on Greek assets including the non-performing loan (NPL) market.

As a reminder, in H1 2021, Eurobank has started the HAPS securitisation process for the €3.2bn Mexico Portfolio (already under management by doValue). As part of Project Mexico, Waterwheel Capital Management has acquired a 90% stake in the mezzanine and junior notes related to the securitisation of the portfolio with doValue retaining the related servicing mandate of the Mexico Portfolio.

The completion of the €3.2bn Project Mexico with Eurobank and Waterwheel Capital Management (which follows the completion of the €5.7bn Project Frontier with National Bank of Greece, Bain Capital and Fortress) reinforces doValue leadership as a servicer in the Greek HAPS securitisation market.

Original Story: Market Screener | PR 
Photo: Photo by Sergey Klimkin in FreeImages
Edition: Prime Yield

Alpha Bank has completed the securitization of a loan portfolio worth €1.9 billion with Christofferson, Robb & Company (CRC) as lead investor, along with AnaCap Financial Partners and the European Bank for Reconstruction and Development (EBRD).

The “Project Aurora” portfolio concerns performing corporate loans and will relieve the lender’s financial report of provisions of €1.2 billion, Alpha said.

The transaction forms part of Alpha’s announced business plan “Project Tomorrow,” and is expected to contribute some 47 basis points to its Total Capital ratio 1 as of September 30, 2021.

Original Story: Ekathimerini |Newsroom 
Photo: Alpha Bank website
Edition: Prime Yield

Piraeus Bank, one of Greece’s four biggest lenders, reported a significant drop in its exposure of bad loans.

“Our NPE (non-performing exposures) reduction plan is well on track with more than 90% of actions already executed. NPE reduction in the first nine months of the year amounted to 16 billion euros, bringing our NPE ratio down to 16%,” Chief Executive Christos Megalou said.

The reduction of NPE helped Piraeus Bank to announce a smaller loss in Q3 than the previous three months. The bank reported a net loss from continued operations of 635 million euros, down from 2.045 billion euros in the second quarter, as loan impairment provisions slumped to 811 million euros from 2.28 billion.

The Bank announced that in the first nine months of 2021 it has granted 4.6 billion in new financing, in line with its target of €5.7 billion for the whole year. During the same period, customer deposits and mutual funds have increased by €3.4 billion.

Original Story: Greek Reporter | Tasos Kokkinidis 
Photo: Piraeus website
Edition: Prime Yield

Bank of Greece governor Yannis Stournaras urged nonperforming loan (NPL) servicers to exploit an existing regulatory framework and to make more efficient management of debt, ANA reports.

In an interview with “Naftemporiki” financial newspaper, the responsible noted that these NPLs were out of banks’ balance sheets but this debt was not disappearing. “For this reason,” he said “it is important that NPL servicers manage the stock of NPLs more efficiently. This means exploiting an out-of-court mechanism for debt settlement and a recent new law on debt settlement and bankruptcy. It is important that servicers offer sustainable solutions to debtors or more efficient management of collateral – when necessary – to facilitate the return of debtors to the production process.” 

In the same occasion, he also stressed that successful management of NPLs by servicers is a prerequisite for the success of the Hercules program.

Original Story: Tornos News | News 
Photo: Bank of Greece
Edition: Prime Yield

Invel Real Estate (INVEL) announced the completion of two transactions in the Greek Market, reinforcing in 70 million euros its investment in the country.

The real estate investment and asset manager has acquired a single-borrower nonperforming loan (NPL) portfolio, secured against logistics assets in Greece and comprising a total of 55 million euros of unpaid principal balance, from a pool of Greek banks and in the cooperation with the borrower.

In a separate transaction, Invel has provided a 15 million euros secured corporate facility to the AIM-listed owner of a number of high-end hospitality and residential development projects in Greece and Cyprus. The facility was sourced off-market and was raised by the borrower to generate free cash flow following a challenging period created by the Covid-19 pandemic.

Alexis Pipilis, Invel’s Head of Acquisitions in the Hellenic region, says: “These recent deals not only demonstrate the strength of our network, relationships and platform in Greece and southern Europe, but our capabilities to undertake complex opportunities and provide creative, flexible and efficient solutions. In particular, we have a unique track record in co-operative NPLs, something that is particularly key in the successful realisation of such transactions in our core markets where the legal frameworks differ from the more established markets of northern Europe, as well as the credit market more broadly. We have successfully agreed a number of these transactions in several European jurisdictions in recent years and see significant opportunities for growth in the future.”

Since 2013, Invel has become the largest ever investor in the Greek real estate market, having acquired a 98 % equity stake in PRODEA Investments, formerly known as NBG Pangaea REIC for 1 billion euros. Under Invel’s steering, PRODEA Investments has since increased in size and it is now the largest listed REIT in Greece with a GAV of circa 2.4 billion euros.

Original Story: Property Funds World | News 
Photo: Photo by Toomas Järvet for FreeImages.com
Edition: Prime Yield

Eurobank, one of Greece’s four largest lenders, signed a deal with credit servicer doValue to sell a portion of mezzanine and junior notes of a 5.2 billion euro nonperforming loan (NPL) portfolio securitisation.

Greek banks are cleaning up their balance sheets from non-performing loans via outright sales and securitisations in an effort to reach single-digit NPL ratios next year to bring them close to eurozone averages.

The portfolio of NPL, dubbed project Mexico, has a gross book value of 3.2 billion euros and doValue will be servicing the sour loans.

The transaction is expected to be completed by end-December subject to certain conditions, including the issuance of a ministerial decision to include the Mexico securitisation in the government’s Hercules II bad loan reduction scheme.

Eurobank said the NPL of the Mexico securitisation will be reclassified as ‘held for sale’ in the third quarter.

Completion of the sale of Mexico notes and the derecognition of Mexico loans will take place in this year’s fourth quarter.

The transaction will have no material impact on Eurobank’s regulatory capital ratios and its NPE (non-performing exposures) ratio is expected to stand at 7.3%.

Alantra Corporate Portfolio Advisors International advised Eurobank on the sale.

Original Story: Reuters | Staff 
Photo: Eurobank website
Edition: Prime Yield