Greek Banks Preparing to Dump Bad Loans Find a Buyer in Sweden

(Bloomberg) -- Hoist Finance AB of Sweden is gearing up to buy non-performing credit portfolios from Greek banks as they prepare to offload loans that soured during the country’s debt crisis.

“There’s been a lot of talk about Greece for a long time, but now it’s actually happening," Klaus-Anders Nysteen, the chief executive officer of Hoist, said in an interview in Stockholm.

Hoist buys and restructures bad loans from Europe’s biggest banks. Its markets include the U.K., Germany, Poland, France and Spain. It’s spent recent years investing in Italy but is now also turning its focus to Greece, where it faces a potential goldmine. Non-performing loans make up about half of total credit in the country.

“The banks in Greece have now reached a point where they are willing and ready to divest non-performing loans and the regulation is also in place now, so it will be an effective and good market,” said Nysteen, who became CEO this month.

Non-performing exposures in Greece (including off-balance sheet items) reached about 100 billion euros ($123 billion) at the end of September, or about 45 percent of total exposures, according to the Bank of Greece. Some of the highest non-performing exposure ratios are within consumer credit (53 percent) and in small and medium-sized companies (59 percent).

The biggest challenge for the Greek banks is the loans made to small and mid-sized firms, the CEO said. Hoist “will strive to build a position as a relevant banking partner in this asset class as well as in unsecured consumer loans,” he said.

Greece “only really has four banks relevant to buy from, so either we make it there or we don’t,” the CEO said. “We already have a good presence there; we put our feet on the ground there early on, so we have something to build from."

Hoist entered the Greek market in early 2016 through a strategic partnership with the central bank. The company was part of a consortium selected to manage the aggregated non-performing loan portfolio of 16 Greek banks under liquidation.

While the stock of non-performing loans remains high in Greece, there has been a steady reduction in recent years and the banking sector is, according to Hoist, well capitalized.

“I have met all the big four banks in Greece and its central bank, and the way I understand it and see it, there is no immediate need for capital injections," Nysteen said. "But divesting non-performing loans is a way to capitalize on their non-performing loans and to strengthen their capital ratios."

To contact the reporters on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net, Hanna Hoikkala in Stockholm at hhoikkala@bloomberg.net.

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Celeste Perri at cperri@bloomberg.net.

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