Greek banks are considering offloading part of their shipping debt portfolios worth billions of dollars in a bid to shore up their capital, Reuters stressed citing banking and ship-financing sources.
Earlier this week, Athens has secured a four-month extension of its existing loan agreement but the danger of it ending up in a wreck and the threat of a hurtful Grexit still in existence, raises the risk of Greek banks facing further deposit loses in the future, the news agency estimated.
“There are several portfolios being shopped around at the moment, including shipping loans,” an unnamed banking and ship-financing source said, adding that “it makes sense for the Greek banks, which face a huge liquidity problem, to transfer these assets to third parties because they do not have the structures in place to collect bad debt.” According to the same source, such debt could be attractive for private equity players due to the shipping sector’s continuing downturn. “If they can find buyers, certainly one way to raise cash is through distressed deals. If the pricing is attractive enough, this would be private equity and hedge fund territory,” the source explained to Reuters.
At the same time, another source highlighted that Greek banks were themselves approaching shipowners, offering them to sell their performing loans back to them at a discount: “Even at a slight discount, this will help bolster underlying capital and buy some breathing space for the banks. It’s also a good way of getting loans off their books. For shipowners who have cash, it would be a good option too.”
The four Greek systemic banks (National Bank of Greece, Piraeus Bank, Eurobank and Alpha Bank) currently hold shipping portfolios estimated at around 10 billion euros in total. When questioned, National Bank of Greece and Alpha Bank officials ruled out such scenarios, while Eurobank declined to comment on the issue. On the opposite, a Piraeus Bank executive said this could happen if interested buyers approach the bank, although such a move is not imminent.