Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Greece's Eurobank struggles to flip loan-recovery unit to PIMCO: sources

Stock MarketsOct 04, 2019 05:31AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Greece's Eurobank struggles to flip loan-recovery unit to PIMCO: sources

By Pamela Barbaglia, Valentina Za and George Georgiopoulos

LONDON/MILAN/ATHENS (Reuters) - Greece's Eurobank (AT:EURBr) is struggling to finalize a deal to sell a majority stake in its loan-recovery business to U.S. money manager PIMCO, sources familiar with the matter told Reuters, after a Sept. 30 deadline passed with no agreement.

The sale is a key component of clean-up efforts at Greece's third-biggest bank, which has pledged to quickly cut the problem loans that comprise more than a third of its total lending.

On July 1 Eurobank picked PIMCO, its sixth-biggest investor, as the preferred bidder for an 80% stake in its Financial Planning Services (FPS) unit, setting a three-month deadline to reach an accord.

One of the sources said Eurobank valued FPS at about 300 million euros ($329 million) and was struggling to bridge a valuation gap with PIMCO, which judged the unit's worth at well below that threshold.

Eurobank is keen to finalize the sale of FPS, sources at the bank said, and is continuing talks with PIMCO despite diverging views on the value of the unit.

European Central Bank supervisors have been pushing southern European banks to shed loans that turned sour during the last recession. Now that economic growth in the bloc is faltering again, they are keen for lenders to step up their efforts.

Big portfolio sales have opened up a lucrative market for investors in risky assets.

Loan recovery units such as FPS, which carry with them long-term debt collection contracts, are particularly sought after, and banks have been selling them together with bundles of loans.

RIVAL BIDDERS

FPS had drawn interest from an investment consortium consisting of U.S. activist fund Elliott, U.S. buyout fund Bain and Italian credit management group Cerved (MI:CERV).

Italy's biggest bad-loan specialist, doValue (MI:DOVA), owned by SoftBank-backed (T:3248) Fortress Investment Group, also made a preliminary bid this year but failed to enter exclusive talks.

Verona-based doValue has operations in Greece and last year clinched a deal with Eurobank and three other lenders to manage 1.8 billion euros in soured corporate loans.

Set on pursuing expansion abroad, doValue this year bought Spanish bad-loan manager Altamira.

The two bidders remain interested in buying FPS and are trying to match Eurobank's price expectations, three sources said, with one adding that Eurobank may consider relaunching the process in coming weeks.

All interested parties declined to comment.

Greek banks hold 75 billion euros in impaired loans and are seen following in the tracks of their Italian rivals, which in recent years have almost halved soured debts on their balance sheets from a post-crisis peak of 350 billion euros.

Unpaid loans weaken the banking system by hurting profits and lifting funding costs due to investors' heightened risk perception, ultimately restricting the ability to lend.

Greece's Eurobank struggles to flip loan-recovery unit to PIMCO: sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email