Piraeus Bank did not name the Asian partner, nor provide details of what form such a deal would take. In June the bank said two non-performing exposures (NPE) portfolio sales were in the pipeline: secured shipping loans worth EUR500m ($560m) and unsecured consumer loans worth EUR700m.
“This pioneering initiative forms part of Piraeus Bank’s continued commitment to the shipping community, through investment of international capital into existing opportunities and new financing to the shipping industry,” said the bank.
Piraeus Bank, like its Greek peers, is saddled with a high pile of non-performing loans, the legacy of a multi-year debt crisis. Although the country’s banks are making progress in reducing the high load of non-performing credit on their balance sheets, their ability to provide financing is constrained.
Still, against all odds, Greek banks showed a robust performance in 2018 and into 2019, and increased their share of the total $54bn ship finance book to Greek shipping.
Houlihan Lokey is acting as Piraeus Bank’s strategic and financial advisor in the sought transaction which the bank says is part of its initiative which aims to position the bank at the “forefront of servicing Greek shipping clients.”
In June Piraeus Bank finalised a big sale of corporate NPE to US fund Davidson Kempner Capital Management. The gross book value of the portfolio sold was $605m But the selling price has taken a big 'haircut' as the US fund will pay just under $270m. The transaction is subject to terms and approvals by the competent Greek authorities, including the consent of the Hellenic Financial Stability Fund, when finalised it will reduce the bank’s NPE ratio by about 50 basis points (bps).
The bank had been linked for some time to a disposal of its so-called Nemo book of shipping loans. The package was said to be worth between $560m and $672m, as hedge funds had been expected to move for the portfolio.
Meanwhile, Bank of Greece Governor Yannis Stournaras aims to propose the full lifting of capital controls on Greek banks. “We consider they are no longer of use,” said Stournaras after meeting new Greek Prime minister Kyriakos Mitsotakis. “The Bank of Greece will recommend to the government they [controls] be fully lifted the soonest possible.”
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