National Bank of Greece SA
One of the portfolios, named Icon, includes €1.5 billion of collateralized loans to small businesses. The Greek lender expects to receive nonbinding bids for the loan book by Oct. 20 and to close the sale by mid-December, one of the sources said, adding that Morgan Stanley is advising the bank on the sale.
National Bank of Greece is also in the final stage of a project for the sale of a €300 million nonperforming shipping loan package, and expects to receive binding bids by September-end.
It also expects to finalize the sale of another two bad loan portfolios at its overseas subsidiaries. The source said one of the portfolios contains €400 million of business and retail loans in Cyprus, while the other one is €200 million of collateralized business loans in Romania.
In August, the bank said it expects to see a "faster than planned" reduction of its nonperforming exposures, having reduced NPEs by €2.5 billion so far this year, and would need to make another €1.8 billion cut to reach its NPE reduction target of €4.3 billion by 2019-end. The bank expects the sale of the four NPL portfolios to help it achieve that target, the sources said, adding that National Bank of Greece aims to slash its NPE ratio to 5% by 2022 from 36.5% at June-end.
Reducing high levels of NPLs has been the biggest challenge facing Greece's four biggest banks since the 2008 financial crisis, when the country entered a multiyear recession and Greek borrowers began to default on their loans en masse. At the end of the first quarter, the banks — National Bank of Greece, Piraeus Bank SA, Eurobank Ergasias SA and Alpha Bank AE — were still saddled with more than €80 million of toxic debts on their balance sheets between them.
