The top four Greek banks agreed to have Italy’s doBank manage a combined 1.8 billion euros worth of their non-performing credit, the banks said on Wednesday.
DoBank will manage the non-performing debt held by Piraeus, National, Eurobank and Alpha of more than 300 Greek small and mid-sized businesses, facilitating restructuring when it’s feasible, the banks said.
The deal is part of efforts to reduce Greek banks’ bad debts. The banks are under pressure by regulators to tackle soured loans that clog up their balance sheets and hold back lending, an impediment to economic recovery.
The debt is one legacy of the Greek financial crisis that began in 2010. The country is due to exit this month the last of three bailouts funded by the euro zone to end the crisis.
Total non-performing exposures, which include credit past due for more than 90 days plus restructured loans likely to turn sour, amounted to 92.4 billion euros at the end of March, or 48.5 percent of their total loans.
DoBank is a credit servicer listed on the Milan stock exchange with a client base consisting of top credit institutions. Known as UniCredit Credit Management Bank SpA, it focuses in negotiating out-of-court settlements. It has set up a branch in Greece.
The servicing agreement was reached after an international tender in which more than 30 servicing firms participated, the banks said.