November 29, 2018 / 1:25 PM / 8 months ago

UPDATE 1-Greece's Alpha Bank agrees deal to sell 1 bln euros of bad loans

(Adds details, background)

ATHENS, Nov 29 (Reuters) - Greece’s fourth-largest lender Alpha Bank said on Thursday it had secured a deal to sell 1 billion euros ($1.1 billion) of small-business non-performing loans to a consortium of funds managed by Apollo Global Management and the International Finance Corp.

Alpha Bank said the agreed sale price for the NPL portfolio, which is secured mainly by real estate assets, was set at 337.1 million euros, or about 33.6 percent of gross book value.

Greek banks are saddled with billions of euros of bad loans, or the highest ratio of so-called non-performing exposures (NPEs) in Europe following the country’s seven-year debt crisis.

Alpha Bank said its deal with the fund consortium also includes the disposal of repossessed real estate assets with an on-balance sheet gross book value of 56 million euros, at a sale price of 51 million euros.

The transaction, part of the bank’s efforts to restore its balance sheet, is expected to have a positive impact on capital and liquidity, the bank said.

It expects to complete the deal on non-performing loans by the end of this year and complete the sale of repossessed assets in 2019.

Greek banks are seeking to reduce their pile of bad loans to meet targets agreed with the Bank of Greece and the European Central Bank’s Single Supervisory Mechanism (SSM) and free up capital for new lending to support Greece’s economic recovery.

International Finance Corp. is an arm of the World Bank.

Citigroup Global Markets acted as Alpha Bank’s financial adviser on the sale.

Alpha said transitional servicing of the NPL portfolio has been undertaken by Cepal Hellas Financial Services.

$1 = 0.8781 euros Reporting by George Georgiopoulos; Editing by Susan Fenton

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