Greece’s largest lender Piraeus Bank said on Monday it agreed to sell a pool of unsecured non-performing loans (NPLs) to APS Investments for around €50 million, confirming what banking sources told Reuters last month.
The pool, dubbed Arctos, includes sour credit card and consumer loans equivalent to total legal claims of €2.24 billion. The sale is part of efforts to shrink the bank’s bad debt load.
Piraeus, with €30.8 billion of bad loans, is working on shrinking its stock of soured debt by 34% to €20.3 billion by the end of next year.
The value of the deal was 5% of the €1 billion outstanding principal amount,” Piraeus Bank said.
Ernst & Young advised Piraeus on the transaction, which is expected to boost the bank’s core equity tier 1 capital ratio by about 4 basis points.
The closing of the sale is subject to regulatory approvals by the authorities in Greece, including the Hellenic Financial Stability Fund, which owns 26.2% of the bank.
The sale of the loan pool, which has a gross value of €385 million on the bank’s books, is expected to reduce its non-performing exposures (NPE) ratio by 30 basis points, Piraeus Bank said.
Active in distressed debt markets, APS has been buying, servicing and advising on non-performing loan (NPL) portfolios since 2004.