Greek NPL market: Opportunities for investments over 3 billion euros

Opportunities for investments over 3 billion euros, with limited risk due to market maturity, are expected to be created in the immediate future in the non-performing loan management market, attracting new investment funds in addition to the funds that have already entered the Greek market.

This assessment was expressed by Mr. George Georgakopoulos, Managing Director of Intrum Greece, at the Smith Novak conference on NPL Europe, which takes place today and tomorrow in London.

According to the data presented, to date, about 2.5 billion euros have been invested in the domestic market through the purchase of NPE portfolios and 0.5 billion euros through the acquisition of interim securities under the securitizations that have taken place.

Mr. Georgakopoulos noted that there is interest from funds that see the Greek market, but were not placed in the first wave of transactions. “In the secondary market that is starting now due to the securitizations that have been implemented and the liquidation plans that include them, there will be a next wave of transactions with investments that are expected to exceed 2 billion euros,” he estimated.

He added that investments of more than 1 billion euros will take place in real estate related to non-performing loans. “Real estate will be of great interest for the next two to three years as prices remain very competitive,” he said.

Expected transactions

In general, said the Managing Director of Intrum Hellas, referring to the ecosystem of the Greek NPLs, “on the one hand there will be lower returns, as macroeconomic risks have now been reduced, but on the other hand the risks that existed in a market, which had not yet been formed in the first phase, have been reduced.”

According to him, “the fact that there is a structured market, with servicers providing high quality services, with legal and consulting support, that is, an entire support ecosystem, that is, can attract significant investments.”

In the same context, added Mr. Georgakopoulos, “sales of sectoral loan portfolios that aim to improve the competitiveness and operational restructuring of companies, attract interest from funds and business groups in the same sector.”

In fact, as he said, Intrum is already running a process of selling a hotel loan portfolio and is preparing similar projects for various sectors, finding great investment interest.

Asked about the possible impact of the war in Ukraine and inflation, Mr. Georgakopoulos replied that, according to an analysis by Intrum, there is expected to be a reduction in the purchasing power of Greeks between 5% -7%, due to the explosion in energy prices. and food, but without affecting, as shown at this stage, loan repayments.

Regarding the European NPLs market, he pointed out that “as banks become more and more focused on core banking, market growth prospects will increase, for example, unlikely to pay loans or complex cases will be transferred to management servicers.”