Alpha Bank unveils biggest securitization of NPEs in Europe

Alpha Bank on Tuesday unveiled one the biggest securitization plans of non-performing exposures (NPEs) in the European market as part of a strategic plan towards a faster restructuring of its balance sheet.

The transaction, worth 12 billion euros, will lead to a spectacular 73 pct reduction of non-performing loans (NPLs) in Greece and push the NPE and NPL ratios to 20 pct and 10 pct, respectively, from 44 pct and 28 pct currently. The strategic plan envisages an efficent use of capital to deal with NPEs, with the CET1 capital ratio of more than 15 pct and a capital adequacy ratio of more than 17 pct in 2022. The transaction will not lead to a dilution.

The HAPS (Greek securitization guarantee programme) introduced recently by the Greek government is expected to play a catalytic role in banks’ efforts to restructure their balance sheet, while Alpha Bank’s intention is to use guarantees up to 3.7 billion euros in the framework of the programme. Alpha Bank will take advantage of the positive outlook of the Greek economy and increasing demand by international investors for the Greek market and will also move with a reorganization of its NPE management platform through a cooperation with a strong international company.

Vasilios Psaltis, the bank’s CEO, said: “Our confidence in the prospects of the Greek economy, combined with our high capital reserves, allow us to process with a NPEs securitization transaction, worth 12 billion euros, a landmark for the market. This large-scale restructuring of our balance sheet will not only lead to a drastic reduction of credit risk cost, but will allow us to move towards a transformation of the bank’s operating model, puuting clients at the epicenter and offering high-quality products and services”.