The International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), APS Delta and Balbec Capital have agreed to invest a total of €50m in an unsecured non-performing exposure (NPE) portfolio in Greece’s Piraeus Bank.
The investment in the portfolio of Piraeus Bank is expected to strengthen the banking sector in country and could reduce the number of bank’s exposure in the country, IFC stated.
The EBRD will be investing €15m in the total amount.
As per Bank of Greece’s data, as of June this year, NPEs in Greece stood at €89bn, which are about 48% of total exposure. By the end of next year, the NPEs could decrease to €65bn, as part of the reduction plans the lenders have agreed with the supervisory authorities.
IFC stated that this transaction is part of its distressed asset recovery program (DARP), a strategic response to high levels of non-performing loans that have built up, after the global financial crisis.
IFC Europe & Central Asia Regional Director Wiebke Schloemer said: “With this—one of Greece’s largest retail non-performing loan transactions—IFC is also supporting Piraeus Bank’s efforts to restructure its balance sheet.
“By mobilizing funding from the private sector to resolve NPLs, we are increasing the liquidity of Greek banks, freeing up capital for new lending and supporting the broader Greek economy.”
This is the second sub-project under the EBRD’s €300m NPL Resolution Framework, where it will purchase non-performing loan (NPL) portfolio in Greece.
Balbec Capital is a private investment firm with experience in providing alternative credit investments, focusing on obligors or assets in bankruptcy proceedings, restructuring, or some other form of distress.
Founded in 2010, the company has pioneered investment opportunities in consumer insolvency assets and has invested in more than $3bn across 16 countries.
Balbec leverages its transaction experience, global infrastructure, strategic partnerships and proprietary analytics. Its platform enables it to rotate capital to the risk-adjusted investment opportunities, while maintaining focus on capital preservation and reducing risk.
The firm invests in businesses where debtors or assets are subject to bankruptcy, insolvency or other restructuring processes and offers capital in insolvency-based situations.