Greece’s third-largest lender Eurobank announced a deal on Sunday to buy Grivalia Properties in an effort to boost the bank’s capital and speed up the reduction of bad loans.
The Athens News Agency says that the 780 million euro ($886 million) deal creates the best capitalized bank in Greece. The plan will enable the bank to better serve its clients, return to growth and support economic activity in Greece and Southeastern Europe as a whole.
Greek banks have been attempting to bolster capital ratios to reduce non-performing loans, especially in the property sector, which was hit especially hard during the debt crisis and years of recession.
Eurobank said the deal would help cut its ratio of bad loans, or so-called non-performing exposures (NPEs), to 15 percent by the end of 2019. From a total of 39 percent of its loans in the third quarter of 2018, the NPE’s should be reduced to single digits by the year 2021.
“The deal is an accelerator and an enabler of our aim to shrink our load of NPEs,” Eurobank Chief Financial Officer Harris Kokologiannis told reporters.
(with information from AMNA and Reuters)