EBRD, APS invest in Piraeus' bad loan portfolio in Romania

The portfolio comprises about 2,000 NPLs, both unsecured and secured with real estate collateral, and is worth around 400 million euro ($428.1 million), the EBRD said in a press release on Thursday.

"The transaction will support the functioning of the Romanian banking sector, facilitating the return of blocked collateral to the economy and helping borrowers to exit bankruptcy proceedings. It also frees up NPL servicing capacity, enabling the local financial market to originate new lending," the European lender explained.

The participation in the portfolio was acquired through a special purpose vehicle based in Luxembourg, and APS will manage the portfolio. The EBRD funded 30% of the participation, with the remainder being financed by APS through own funds and managed accounts.

This transaction marked the first NPL participation deal conducted under the EBRD's new NPL Resolution Framework II, which aims to address the persistently high levels of NPLs in many of the countries where the European lender invests.

Romania's NPL ratio stood at 2.65% as of June 2023, down from 22% in 2014, the EBRD said in a separate policy strategy and delivery (PSD) statement issued on Friday.

APS Group was established in 2004 and operates mainly in the markets of Central and Southeastern Europe. The group's area of expertise consists of three pillars - alternative asset management, real estate investments, and debt recovery. APS Group currently manages more than 100 NPL portfolios with a total nominal value of over 11 billion euro.

($=0.9344 euro)