Alpha Bank plans massive 12 bln euro bad loan sale

Alpha Bank plans massive 12 bln euro bad loan sale

Alpha Bank, Greece's fourth-largest lender, plans a 12 billion euro securitization of bad loans in the first half of next year, in one of the biggest deals of its kind in Europe. The lender said the sale will cost two billion euros and will lower its bad loan ratio from 44 percent to 20 percent.

As the bank published third-quarter earnings, it unveiled its strategy to reduce non-performing loans. This includes applying for 3.7 billion euros of state guarantees for securitizations offered by the Greek government's Hercules asset protection scheme.

“We are embarking today on a comprehensive transformation plan, designed to leave the financial crisis behind us by dealing decisively with legacy asset quality issues and by improving significantly our profitability going forward," said chief executive Vassilios Psaltis in a statement.

Under pressure from European banking regulators, Greek lenders have been picking up efforts to reduce some 75 billion euros of bad loans sitting on their balance sheets - the result of Greece's ten-year economic crisis. The bank also said that it expects to complete new loan disbursements of 14 billion euros between until 2022 on the back of improving economic conditions in Greece. For the third quarter of the year, Alpha reported a net profit of 4.8 million euros from continuing operations, versus earnings of 59.4 million euros in the second quarter of the year.


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