Alpha Bank to Sell 10.8 Billion Euro Portfolio to Davidson Kempner By Reuters
Overview
Greek bank, Alpha Bank, announced that it will sell a 10.8 billion euro portfolio of nonperforming loans to Davidson Kempner, a US-based global investment firm. The deal marks one of the largest debt sales by a Greek lender in recent years and signifies the efforts of Greece to reduce its nonperforming loans (NPL) levels.
What are nonperforming loans?
Nonperforming loans refer to loans that have not been repaid by the borrower for a period of time, usually more than 90 days. In the case of Alpha Bank, the portfolio for sale consists of a mix of loans from retail, small and medium-sized enterprises, and large corporates.
What does this mean for Alpha Bank?
The sale of the NPL portfolio aligns with Alpha Bank’s strategy to reduce its NPL levels and improve profitability. This move is also seen as a way to improve the bank’s balance sheet and creditworthiness, which will help Alpha Bank to access funding from international markets at lower costs.
What about Davidson Kempner?
Davidson Kempner is known for its focus on distressed investments and has been actively looking to purchase NPLs in Greece. The US-based company has already invested in Greek NPLs in the past, and the latest deal with Alpha Bank indicates its continued interest in the Greek NPL market.
Conclusion
The sale of the nonperforming loan portfolio from Alpha Bank to Davidson Kempner marks a significant step towards reducing Greece’s NPL levels. With an overall NPL ratio of around 35%, Greece has been under pressure to reduce these levels in order to strengthen its banking sector and attract investment to the country. The deal is also seen as a positive move for Alpha Bank, which aims to improve its long-term profitability and access funding at lower costs.
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