Alpha Bank will form a joint venture with Spain’s Aktua to manage a loan portfolio adding up to 11 billion euros and find solutions such as debt haircuts or property sales for the borrowers. The portfolio will consist of mortgages, consumer loans and even some small corporate loans that have been delayed for at least a year.
The dossier containing the new venture’s operating license is at the Bank of Greece and its formal set-up is expected within June. Although the agreement between Alpha and Aktua has been sealed for some time, its implementation first required the clarification of the institutional framework regarding the management and sale of nonperforming loans.
The passing of the omnibus bill in the Greek Parliament on Sunday signaled the opening up of the problematic portfolio management market and cleared the way for the completion of the agreement for the joint venture.
Another joint venture, to be set up by Alpha, Eurobank and KKR for the restructuring of corporate loans that add up to 1.2 billion euros, is also at the licensing stage.
The model on which the cooperation of Alpha with Aktua will be based depends on a more active management of debts that have been delayed for a long time and on which the bank has already started legal action, without however having reached the point of property repossession. The possibility of debt haircuts is now formally on the agenda and will depend on the outstanding amount of the debt, the value of the property the loan is secured against and the current income of the borrower. Write-offs will mainly concern interest due.
The company will develop a broad cooperation network with estate agents, through which it will be able to sell the borrowers’ properties, making it easier for debtors to find buyers. According to the planning, the results of this cooperation will start to become clearer from October, with the loan management venture following specific rules and procedures as provided by Bank of Greece regulations.
Within June, the authorities will also have to tackle a series of issues related to property taxation, such as the property transfer tax, stamp duty etc. The aim is to ease taxation on property associated with bad loans in order to facilitate their sale.
In any case, the properties will have to be free of outstanding Single Property Tax (ENFIA) payments or any regulatory problems in order to be transferred.