Bad-loan portfolios being sold at huge discounts

The prices of the loan portfolios that Greek banks are selling to foreign funds are below 5 percent of the nominal value of the loans they contain, as they are unsecured, have not been serviced for a long time and are usually flagged as bad by the banks.

A few days ago Alpha Bank sold a nonperforming loan portfolio with a nominal value of 3.7 billion euros for just 90 million euros to Norwegian group B2Holding, which beat off competition from Czech group APS. The price amounts to just 2.4 percent of the value of the portfolio (including interest), or 4.5 percent of the loans' original value of 2 billion euros.

The price at which the Venus portfolio was sold by Alpha is marginally higher than that of Eurobank's Eclipse package, whose original value (not including interest) was 1.5 billion euros (with interest it was 2.8 billion); it was sold at the end of 2017 for just...