GREECE is poised to give the green light to the sale of a huge pile of soured loans.
Athens is said to have ditched plans for a “bad bank” to house its estimated €100bn (£75bn) portfolio of bad loans. Instead, it is expected to be sold to a clutch of investment funds including the private equity giants Bain Capital and KKR and Spain’s Aktua.
“A bad bank is too complex at this stage because of the variety of asset classes involved,” said a source close to the plans. “It could still happen further down the line.”
The expected sale comes as the European Central Bank completes its health check of Greece’s four largest banks — National Bank of Greece, Piraeus, Eurobank and Alpha — to determine how much capital each needs from the €25bn set aside to recapitalise the sector. The Greek prime minister, Alexis Tsipras, is keen to conclude the review by the end of October and open discussions with creditors on relief for the country’s €320bn of debt.
In August, Tsipras clinched an €86bn austerity package, the country’s third since 2010, after months of turbulent talks that threatened its membership of the single currency.
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He has since been forced to pass several controversial measures, including tax increases, pension reforms, a rise in the retirement age and further spending cuts in return for the release of cash.