Piraeus Bank has applied to the Hercules asset protection scheme that aims to reduce banks’ exposure to nonperforming loans through their securitization.
The application concerns the securitization of Phoenix, a €1.9 billion portfolio of housing loans.
Piraeus’ application leaves National Bank as the last of the “big four” Greek retail banks that has not applied to the scheme.
Piraeus is also expected to apply for an even larger portfolio, called Vega, whose value is estimated at €5 billion.
Piraeus plans to sell to investors about 95% of the portfolio’s so-called mezzanine titles, or about €200-300 million worth of titles. The competitive tender for investors will open this fall with the goal of finalizing the sale during the first quarter of 2021.
The Phoenix portfolio, Piraeus’ first such securitization, contains 58,000 loans from 22,000 debtors; 67% are nonperforming. The average amount per loan is €90,000.
Piraeus’ nonperforming exposure (NPE) at the end of June was €22.6 billion. The group’s capital adequacy ratio was 16%, up from 15.1% in March. Tier 1 capital, an indicator of solvency, was 14%.