Greece’s NBG launches third big property NPL sale

National Bank of Greece (NBG) has launched the sale of a major property-backed loan portfolio in the third such sale in the country this year.

NBG, Greece’s largest lender by deposits, has hired Morgan Stanley to run the process known as Project Symbol. The sale involves around 13,000 SME loans with a face value of €1.6 bn and secured against 7,900 assets - largely commercial properties with a value of around €700 mln, as well as some €400 mln of residential assets and plots of land.

Non binding bids on Project Symbol are due by Dec 10, with an end-of-February deadline for binding offers.

The operation is the third major property-backed loan sale in Greece this year. Earlier in 2018 Piraeus Bank sold the so-called Amoeba non-performing loan portfolio with an on-balance sheet gross asset value of €1.45 bn to US investor Bain Capital. Similarly, lender Alpha Bank has confirmed the sale to Apollo Global Management of the Jupiter portfolio of distressed loans including secured debt with a nominal value of €1 bn and repossessed assets worth €56 mln.

Earlier this week, another major Greek lender – Eurobank – agreed a major recapitalisation by way of incorporation of local property owner Grivalia Properties. Eurobank, Greece’s third-largest lender by assets, said that it will merge with Grivalia, a company controlled by Canada’s Fairfax Financial Holdings, through an all-share offer which will boost its capital base by around €900 mln. The new group will subsequently own a real estate portfolio valued at €2.2 bn.

The unusual move – basically a capital injection in the form of real estate assets – will make Eurobank the best-capitalised of Greece’s four systemic lenders, increasing its common equity tier-one ratio from 11.3% to 13.8%.

The operation will also clear the way for Eurobank’s large pile of non-performing loans to be reduced at a faster rate, according to Fokion Karavias, Eurobank’s chief executive. ‘The proposed merger is a landmark deal for the bank,’ he said. ‘It will enable the bank to attain the highest total capital ratio in Greece and to accelerate the reduction of its non-performing exposures through a large-scale securitisation of around €7 bn and other initiatives.’

Although capital accretive, the operation represents a major turnaround for Eurobank which, like the other Greek banks, had been trying to divest non-core assets including its property arm, Eurobank Property Services.

This article first appeared in EuroProperty, the weekly publication of PropertyEU.


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