Greek lender Piraeus Bank’s partnership with Swedish loan servicer Intrum to manage bad loans will create the biggest independent loan servicer in the Greek market, executives at both firms said on Friday.
Last month Piraeus, Greece’s largest lender by assets, wrapped up a deal with Intrum, setting up a large servicer of nonperforming loans and real estate assets, as part of efforts to reduce its risk from bad debt.
Greek banks have been working to reduce a pile of sour credit, about 75.4 billion euros at the end of June, the legacy of a financial crisis that shrank the country’s economy by a quarter.
“The deal is the biggest foreign direct investment by a Swedish company in the Greek financial sector,” Christos Megalou, CEO of Piraeus Bank, told reporters.
“We have created the first independent servicer of size in the Greek market.”
The transaction valued the loan servicing platform at 410 million euros with Intrum acquiring 80 percent of the new company for 328 million euros.
The remaining 20 percent will be held by Piraeus Bank. Intrum Hellas is already up and running, managing Piraeus Bank’s 26 billion euros of nonperforming exposures.
In comparison, the 18 licensed credit servicers in Greece were servicing a total of 17.5 billion euros of nonperforming loans as of June this year.