The European Bank for Reconstruction and Development (EBRD) and Waterfall Asset Management have joined B2Holding in investing in a bad loan portfolio originated by Greece’s Alpha Bank, EBRD said on Monday.
Alpha Bank sold a portfolio of non-performing loans (NPLs) to B2Holding in March, as part of efforts to reduce its bad loan pile and meet targets agreed with the Bank of Greece and the European Central Bank’s Single Supervisory Mechanism (SSM).
B2Holding is a pan-European debt specialist headquartered in Oslo while Waterfall Asset Management focuses on structured credit and private equity investments.
Greek banks are saddled with billions of euros of sour loans, struggling with the highest ratio of so-called non-performing exposures (NPEs) in Europe following the country’s seven-year debt crisis.
Top lenders including Alpha had an NPE ratio of 47.6 percent at the end of June versus an average 4.5 percent in Europe.
Reducing the pile is a crucial step towards cleaning up balance sheets, helping banks to cut loan-loss provisions and free up capital for new lending to support Greece’s economic recovery.
The EBRD started investing in Greece on a temporary basis in 2015 to support its recovery. To date it has invested more than 2 billion euros ($2.28 billion) in more than 40 projects.
The NPL transaction is the first sub-project under the EBRD’s 300 million euro NPL Resolution Framework that was launched last year, involving the purchase of an NPL portfolio in Greece.
The EBRD said its portion in the Alpha Bank NPL sale will be 25 million euros. [Reuters]