Greece’s leading banks are considering offloading part of their portfolios of shipping debt worth billions of dollars in a bid to shore up their capital, according to banking and ship financing sources.
Greece has secured an extension to its bailout from its European partners, but the danger of it unraveling and of Greece being pushed out of the eurozone still exists, raising the risk that Greek banks could face large deposit losses in the future to add to those they have already had.
“There are several portfolios being shopped around at the moment, including shipping loans,” one banking source said. “It makes sense for the Greek banks which face a huge liquidity problem to transfer these assets to third parties because they do not have the structures in place to collect bad debt.”
The banker and a ship-finance source said such debt could be attractive for private equity players who have been scooping up distressed assets in shipping due to the sector downturn.
“If they can find buyers, certainly one way to raise cash is through distressed deals. If the pricing is attractive enough, this would be private equity and hedge fund territory,” the ship finance source said.
A separate ship-finance source said Greek banks were also approaching ship owners directly and offering to sell their performing loans back to them at a discount.
“Even at a slight discount, this will help bolster underlying capital and buy some breathing space for the banks. It’s also a good way of getting loans off their books. For ship owners who have cash, it would be a good option too,” the source said.
Bank of Piraeus (BOPr.AT), Eurobank (EURBr.AT) and their rivals National Bank of Greece (NBGr.AT) and Alpha Bank (ACBr.AT) are estimated to have shipping portfolios of at least $10 billion in total, ship industry sources said.
An Alpha official told Reuters the bank was “not considering selling shipping loans”.
Eurobank declined to comment. An executive at Piraeus Bank said they could look into selling some loans if approached by interested buyers, adding that nothing was imminent.
An official with National Bank of Greece, whose chief executive and chairman are expected to step down, said there was “no such decision” on shipping.