Alpha Bank, Greece’s third largest lender by market capitalization, announced on Monday it agreed to sell a portfolio of Cypriot nonperforming loans and real estate properties to Cerberus as part of efforts to clean its balance sheet from bad debt.
The portfolio, named Project Sky, has a gross book value of 2.4 billion euros. The sale will reduce Alpha’s nonperforming exposures (NPE) ratio by about five percentage points to 13%, the bank said.
The impact of the sale to Alpha’s income statement is fully in line with a budgeted loss of €200 million, it said, while the impact on its total capital adequacy ratio will be around 20 basis points (as of September 30, 2021 pro forma).
Completion of the sale is expected in the third quarter of this year, subject to regulatory approvals.
Project Sky will fully restructure Alpha Bank Cyprus’ portfolio with the gross book value of NPE and real estate owned (REO) falling to less than €80 million, releasing funds and allowing the bank to focus on new activities.
Alantra Portfolio Advisory advised Alpha Bank and KPMG Cyprus was the local due diligence adviser.