- EBRD and APS invest in Piraeus Bank’s participation in NPL portfolio in Romania
- Transaction helps reduce NPLs in Romania
- Healthy levels of NPLs support financial resilience and enable new lending by banks
The European Bank for Reconstruction and Development (EBRD) and APS, a leading non-performing loan (NPL) management firm in Europe, are jointly investing in a funded participation concerning a portfolio of around 2,000 sub-performing and non-performing loans in Romania sold by Piraeus Bank. The total portfolio size, which includes unsecured loans and loans secured with real estate collateral in Romania, is approximately €400 million.
The EBRD has financed a 30 per cent share of the participation in the portfolio, with the remaining funding provided by APS funds and managed accounts.
The transaction will support the functioning of the Romanian banking sector, facilitating the return of blocked collateral to the economy and helping borrowers to exit bankruptcy proceedings. It also frees up NPL servicing capacity, enabling the local financial market to originate new lending.
This transaction is the first project under the EBRD’s new €300 million NPL Resolution Framework II that involves participation in an NPL portfolio. The framework supports efforts to address the challenge of persistently high levels of NPLs in many of the economies where the Bank invests.
While the NPL ratio in Romania improved to some 2.65 per cent in 2023, strengthening the sector’s resilience and supporting a functioning market for NPL sales remains a priority in the region.
“We are proud to have finalised this transaction with the EBRD, which represents a significant achievement in one of our core markets,” stated Viktor Tóth, Chief Investment Officer at APS Investments. “The collaboration with the EBRD and APS has been instrumental in navigating this complex transaction.”
Alexander Saveliev, Director, Specialised Financial Services at the EBRD echoed these comments: “We are pleased to continue our collaboration with APS to support a successful resolution of NPLs in our common regions. This transaction makes an important contribution to the secondary loan market in Romania, which forms a critical part of a well-functioning financial system.”
APS is a leading NPL investor and servicer active in 15 countries. APS currently manages over 100 NPL portfolios with a total nominal value of more than €11 billion.
The EBRD is a leading institutional investor in Romania. To date, the Bank has invested more than €10.9 billion in 525 projects in the country, focusing on further developing the financial sector and capital markets, financing infrastructure and boosting private-sector productivity.
