BofA/Merrill Lynch details battle by Greek systemic banks to reduce NPEs

5 September 2018
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Reduced pressure on Greek lenders’ H1 2018 results from lower non-performing exposures (NPEs) is the highlight of four separate reports by BofA/Merrill Lynch this week, one for each systemic bank in the country.

Nevertheless, all four reports stress that Greek lenders continue to exhibit weaknesses despite the reduction of NPEs, advising stepped up measures to lessen the load.

Specifically, BofA/Merrill Lynch said Alpha Bank’s annual goal for a reduction of NPEs by 2.9 billion euros will be achieved due to the sale of the Jupiter and Mercury portfolios (1.9 billion euros), along with scheduled refinancing schemes, property auctions and write-offs.

As far as National Bank (NBG) is concerned, the multinational investment bank said NPEs continued to ebb in the second quarter of 2018, now totalling 500 million euros, compared to the previous quarter. The total reduction in NPEs since the end of 2015 reaches 5.5 billion euros for NBG.

While already meeting it annual goal, NBG proceed with the sale of another two “bad loan” portfolios in 2018, worth 1.7 billion euros, sales expected to be finalized in 2019.

For Piraeus Bank, BofA/Merrill Lynch said accelerated rates of NPE reduction shrunk the “red ledger” figure by 3.5 billion euros, on the back of the sale of a NPE portfolio worth 1.8 billion euros in the second quarter of 2018.

The sale of two NPEs portfolios, Arctos and Amoeba, is expected to conclude in the third quarter, while another two sales (Iris and Nemo) bumped for 2019. Piraeus Bank’s Bulgarian subsidiary is also on the selling block.

BofA predicted losses for Piraeus Bank in 2018 of roughly 44 million euros.

Finally, BofA said Eurobank’s profitability depends on a dynamic plan to reduce NPEs. Eurobank is already in talks with the SSM over how to best manage two billion euros of NPEs linked to mortgages.

BofA estimates profits of 70 million euros for Eurobank in 2018.

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