Eurobank to sell NPL portfolio for €232 million

Greek lender Eurobank is preparing to sell a mixed portfolio of non-performing loans (NPLs) worth €232 million, according to its first-quarter financial statements.

The portfolio includes housing, business, small business, and consumer loans.

At the end of 2023, Eurobank classified this portfolio, known as Portfolio Leon, as held for sale, initiating negotiations with potential investors. The bank also recognised an additional impairment loss of €55 million, impacting its 2023 financial results.

In March, Eurobank revised the portfolio’s scope, adding loans with a gross book value of approximately €240 million. This adjustment increased the portfolio’s total gross book value from €398 million to €638 million.

According to the financial statements, the expected sale price of the portfolio is €232 million, which is 36.3 per cent of its gross book value. Consequently, the impairment provision stands at €406 million.

The expansion of Project Leon by €240 million, with these loans reclassified as held for sale, reduced the group’s non-performing exposures (NPEs) by €0.2 billion to €1.3 billion.

This reduction lowered the NPE ratio from 3.5 per cent at the end of 2023 to 3 per cent. The coverage ratio of NPEs by provisions increased to 92.6 per cent from 86.4 per cent at the end of 2023.

Moreover, as part of its NPE management strategy for 2024-2026, submitted to the Single Supervisory Mechanism (SSM) last March, Eurobank said that its aim was to achieve an NPE ratio of 3.2 per cent by the end of 2026. The bank has already reached this target.