Greece’s largest lender Piraeus Bank said on Monday it agreed to sell a pool of unsecured non-performing loans (NPLs) to APS Investments for around 50 million euros, confirming what banking sources told Reuters last month.
The pool, dubbed Arctos, includes sour credit card and consumer loans equivalent to total legal claims of 2.24 billion euros. The sale is part of efforts to shrink the bank’s bad debt load.
Piraeus, with 30.8 billion euros of bad loans, is working on shrinking its stock of soured debt by 34 percent to 20.3 billion euros by the end of next year.
The value of the deal was 5 percent of the 1 billion euros outstanding principal amount,” Piraeus Bank said.
Ernst & Young advised Piraeus on the transaction, which is expected to boost the bank’s core equity tier 1 capital ratio by about 4 basis points.
The closing of the sale is subject to regulatory approvals by the authorities in Greece, including the Hellenic Financial Stability Fund, which owns 26.2 percent of the bank.
The sale of the loan pool, which has a gross value of 385 million euros on the bank’s books, is expected to reduce its non-performing exposures (NPE) ratio by 30 basis points, Piraeus Bank said.
Active in distressed debt markets, APS has been buying, servicing and advising on non-performing loan (NPL) portfolios since 2004. [Reuters]