EBRD supports NPL resolution in Greece

By Olga Aristeidou

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  • EBRD and Alpha Bank to lend €105 million to Cepal Hellas to boost NPL resolution
  • Investment will support Project Galaxy, the largest NPL securitisation transaction in Greece
  • Transaction falls under the EBRD’s NPL Resolution Framework

In efforts to support Greece in reducing its level of non-performing loans (NPLs), the European Bank for Reconstruction and Development (EBRD) and Alpha Bank are providing a €105 million loan to Cepal Hellas to support the growth of the NPL servicing company.

Cepal Hellas specialises in managing loans and credit receivables and is one of the leading independent NPL service providers in Greece, regulated by the central bank. By expanding its activities, it aims to help reduce the country’s NPL stock even further.

The EBRD’s portion of the loan will be up to €50 million and Alpha Bank will fund the remainder. The financing will indirectly support Project Galaxy, the largest NPL securitisation transaction in Greece and the third largest in Europe to date.

The financing comes under the EBRD’s NPL Resolution Framework, launched in 2017 to help resolve the challenge of persistently high NPL levels in many of the economies where the Bank invests.

While Greece has made progress on reducing its NPL levels, the country’s sizeable non-performing portfolios remain the banking sector’s most significant challenge and continue to pose a systemic risk to financial stability. Reducing NPL levels is a crucial step in cleaning up banks’ balance sheets, reducing risk provisions and freeing up capital for new lending, thus supporting the Greek economy.

To date, the EBRD has invested more than €4.7 billion in around 80 projects in the corporate, financial, energy and infrastructure sectors of the Greek economy and has supported three NPL portfolio transactions in the country with a total value of €50.6 million.

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