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Exclusive: Piraeus Bank to unload bad loans pool to APS

ATHENS (Reuters) - Piraeus Bank BOPr.AT, Greece's largest lender by assets, has agreed to sell a 400 million euro pool of soured, unsecured consumer loans to distressed debt specialist APS Holdings, bankers close to the transaction told Reuters on Friday.

The project, dubbed Arctos, involves a pool of about 220,000 non-performing credit card and consumer loans and is part of efforts to shrink the bank’s bad-debt load.

Greek banks, including Piraeus, have been under pressure by regulators to tackle their soured loans which are clogging up their balance sheets and holding back lending.

“The Arctos pool will be sold to APS,” one of the bankers told Reuters, declining to be named. “The deal will close next week.”

The Arctos pool of soured consumer credit, about 2.3 billion euros of original principal, has a gross value of 400 million on the bank’s books. Nearly half of the loans are in the 1,000 to 5,000 euro range.

The price offered to buy the Arctos portfolio is seen around 4.5 to 5.5 percent of the principal of the loans, bankers have told Reuters.

Piraeus, saddled with 30.8 billion euros of bad loans, is working on shrinking its stock of soured debt by 34 percent to 20.3 billion euros by the end of next year.

Under the steer of Chief Executive Christos Megalou, who took over in April last year, the bank has been divesting non-core assets and selling bad debt portfolios to strengthen its financial position.

Piraeus, which is 26.2 percent owned by Greece’s bank rescue fund HFSF, was in advanced talks with three short-listed buyers - APS Holdings, Intrum and EOS - to sell the loan portfolio.

Last month Piraeus clinched a similar deal, agreeing to unload a 1.45 billion euro portfolio of secured, non-performing business loans to Bain Capital.

That sale, dubbed the Amoeba project, fetched 432 million euros, boosting its equity capital by 20 basis points.

Active in distressed debt markets, APS Holdings has been buying, servicing and advising on non-performing loan (NPL) portfolios since 2004.

On Thursday, peer National Bank NBGr.AT said it had agreed to unload 2 billion euros of unsecured, non-performing loans to CarVal Investors and Intrum INTRUM.ST for six cents on the euro.

Reporting by George Georgiopoulos; editing by David Evans