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Eurobank’s NPEs to drop to 15%-16% through the Cairo securitisation

Eurobank will achieve a reduction of its NPEs to approximately 15% – 16% in the second or third quarter of 2020, after the transfer of the Cairo securitization to Hercules SPV. The Bank will be the first, and in fact in the midst of the pandemic crisis, to reduce its target for the NPE index below 20%, a year earlier than the SSM’s projected target for Greek banks.

Last Friday, Eurobank submitted an application to the Ministry of Finance to enter the Hercules SPV for the third NPL securitisation, which completes the Cairo securitization. The Bank is expected to receive the approval within this week. Cairo’s inclusion in Hercules SPV is part of Eurobank’s plan to drastically reduce its bad loans. The implementation of the plan started with the merger of Grivalia, and also includes the carve-out and transfer to FPS, of the bank’s  NPL department, and the sale of FPS to doValue. The plan will be presented by the Bank’s management tomorrow.

The €7.5 bn  bad loans that make up the Cairo portfolio will be released from the bank’s books on June 30th. Before that, at the end of May-early June, the Eurobank – doValue agreement for the sale of both the Cairo portfolio and the FPS servicer, will be completed.

On June 30, the bonds of senior, mezzanine and junior grading will be cut. The senior bonds will be held by the Bank. In the third quarter of the year, 75% of mezzanine and 44% of junior bonds will be distributed to shareholders.

Original Source: Capital

Adaptation/Summary: Kiki Athanasiadis

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