National Bank (NBG) has hired Morgan Stanley as an adviser ahead of a planned sale of more than 6 billion euros of nonperforming credit, part of its balance sheet cleanup efforts, bankers close to the transaction said on Tuesday.
NBG, Greece’s second-largest lender by assets, is aiming to begin talks with potential investors about offloading a portfolio of soured loans known as project Frontier in the second half of the year, they added.
The bank said on Tuesday that on completion of the sale, which will involve a securitization, its nonperforming exposures (NPE) ratio would fall to below 15% from 30.9% at the end of the first quarter.
That compares with a target of 5% based on a four-year business plan, which also aims for an 11% return on equity.
NBG’s Frontier portfolio comprises more than €6 billion of mostly nonperforming mortgages along with small and medium-sized business loans and some consumer loans.
NBG will be left with around €4 billion of NPEs, the bankers said.