Property deals by Piraeus Bank may have cost 6.4 mln euros, report says

TAGS: Banking

Property deals by Piraeus Bank may have cost the bank 6.4 million euros, according to a report by Greece’s anti money-laundering authority cited by Bloomberg. 

In the report, the regulator said it looked at the bank’s sale of five properties to a Cypriot firm in 2016 and found that “there are strong indications that Mr. Sallas and other members of Piraeus management who participated in the deals are guilty of malfeasance,” referring to the bank’s former chairman Michalis Sallas.

Sallas, who stepped down in July 2016, has disputed the findings of the report, which relate to a period when he was not managing the bank, and denies any wrongdoing. 

The properties, which had been sold in 2003 to companies “linked to Sallas or members of his family” and then repurchased in 2006 by Piraeus, were offloaded to the Cypriot company in 2016 using loans from the bank, Bloomberg cited the report as saying. 

The transactions, which involved funds going through a series of intermediate companies, showed the lender was “breaching prudent banking methods,” resulting in a financial hit for the bank, the regulator was quoted as saying. 

The body’s report on Piraeus Bank, dated November 2, is the third such study into the bank’s property transactions.

The property sales also featured in an audit report by the Bank of Greece audit report which last September confirmed that it was probing suspected irregularities at Piraeus Bank relating to writedowns of bad loans and breaches of capital controls.

Greek banks are under pressure by the country's creditors to reduce the large proportion of non-performing loans burdening their portfolios.