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Report: Eurobank at odds with Pimco over loan recovery unit's valuation

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Report: Eurobank at odds with Pimco over loan recovery unit's valuation

Greece's Eurobank Ergasias SA is facing difficulty in offloading an 80% stake in loan recovery business Financial Planning Services to U.S. asset manager Pacific Investment Management Co. LLC, or Pimco, Reuters reported, citing sources familiar with the matter.

Both parties have failed to reach an agreement before the Sept. 30 deadline as they were at odds over the valuation of Financial Planning Services, with Pimco valuing the business way below the Greek lender's roughly €300 million threshold, one of the sources said. However, Eurobank is still eager to complete the sale and is continuing discussions with Pimco, sources at the lender added.

In July, Pimco emerged as the preferred bidder for the Eurobank unit, which also drew interest from an investment consortium comprising U.S. private equity firms Elliott Management Corp. and Bain Capital LP as well as Italian finance company Cerved Group SpA. Italy-based doValue SpA also made a preliminary bid for the unit, the newswire added.

Eurobank may consider restarting the bidding process in the coming weeks as the rival bidders, which remain interested in the Financial Planning Services stake, are attempting to match the Greek lender's price expectations, the sources said.

The news comes amid efforts by Greece's four biggest banks to reduce their high stock of bad loans, which stood at more than €80 billion at March-end.