Mass securitization of Greek banks' NPLs now on the horizon

Wednesday, 24 July 2019 13:42
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By E. Sakellari


Banks across Europe, especially in Greece, will be busy in the coming period with efforts to further securitize NPLs, according to bank executives, speaking ahead of pending approval by European institutions and the Commission's DG Comp directorate of at least two plans submitted by the Bank of Greece (BoG) and the Hellenic Financial Stability Fund (HFSF).

The same bank executives pointed to a continuing slide in Greek bond yields, which will facilitate possible solutions, at least as far as the rate of guarantees are concerned.

Some 26 billion euros of NPEs held by Greece's four systemic banks are included in 2019-2021 plan to dramatically improve their balance sheets, with the primary lever being securitization of "bad debt".

The targets for Greece's systemic banks are particularly ambitious, namely, 6.9 billion euros in securitize NPLs for Piraeus Bank; 5.3 billion euros for Alpha Bank; 5.6 billion euros for National Bank of Greece, and nine billion euros for Eurobank - with the latter appearing ahead of the others in terms of promoting sell-off plans.

The figure for total "bad debt" that the country's systemic banks must manage, in various ways, is a stratospheric, by Greek standards, 54 billion euros.

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