NPL Chart of the Week: 05 August 2019
The four largest Greek banks, Piraeus Bank, National Bank of Greece, Eurobank Ergasias, and Alpha Bank, had a total of EUR 26.5bn of non-performing mortgages on their balance sheets as of 1Q19, making up a third of their total non-performing exposure volume of EUR 79bn.
Securitisation is increasingly the tool banks are using to address the complex disposal of residential NPEs.
Most recently, Piraeus Bank has asked advisors to pitch proposals for a securitisation of mainly residential NPLs, as reported this week. The transaction, which will be between EUR 2bn and EUR 4bn, represents a substantial chunk of Piraeus Bank’s non-performing mortgages, which stand at EUR 6.2bn, giving the lender a mortgage NPE ratio of 43.4%.
The largest in Greece, Piraeus also has the highest total NPE volume, EUR 26.9bn, of which EUR 17.9bn are business loans.
Alpha Bank has the second highest NPE volume — EUR 21.7bn — and ratio — 48.9% — of the four banks. It also has the biggest non-performing mortgage problem, with the highest volume (EUR 7.5bn) and ratio (50%) of all mortgages on its balance sheet.
Alpha Bank is currently marketing the EUR 2bn Project Orion, a securitisation also consisting mainly of mortgage loans, as reported.
Though it has the lowest volume of mortgage NPEs at EUR 5.8bn, Eurobank’s mortgage NPE ratio — 39% — remains substantial. The bank is already tackling the problem, though, having agreed to sell 95% of the mezzanine and junior notes of a securitisation of a EUR 2bn NPL residential loan portfolio, dubbed Project Pillar, to PIMCO at the end of 2Q19. Eurobank has a total NPE volume of EUR 15.9bn and a ratio of 36.7%.
National Bank of Greece, which has a significantly lower mortgage NPE ratio than the other banks at 19%, or EUR 7bn by volume, will sell a securitisaton in 2020, as reported. The bank has a total NPE ratio of 38.9% and a volume of EUR 14.5bn.
by Amy Finch