APS Holding SE closes sale of half a billion Euros of NPL in Romania

Thursday July 10th, 2014

A non-performing portfolio of secured loans with a volume of EUR 495 million has been sold to an international investor’s consortium. First transaction of its kind on the Romanian market will allow other banks to follow.

 

Volksbank Romania has reduced its non-performing loans portfolio (NPLs) through the sale of a NPL real estate portfolio with an aggregate volume of €495 million. The Bank has sold the large-volume real estate financing commitments to an international investors consortium composed of Deutsche Bank, AnaCap Financial Partners LLP, H.I.G Capital International Advisers and APS Holding SE. With this transaction, Volksbank Romania has reduced its NPL portfolio to a comfortable NPL ratio of below 8%, well below the average in Romania’s banking system.

 

Benoit Catel, President of Volksbank Romania welcomed the portfolio disposal: “This reduction of our NPL portfolio represents another milestone in our strategic realignment program. We continue in parallel to focus on growing the profitable core of our business.” 

 

The portfolio consists of NPLs (secured loans with 90 days past due) in Romania, of which retail real estate loans account for 84%, with the remaining 16% in corporate financings. The portfolio of 3,566 loans in total is backed by a mix of primarily residential, commercial real estate and development land.

 

Alexander Tscherteu, Chief Risk Officer within Volksbank Romania talking about the successful closing: “This transaction is the first of its kind on the Romanian market. It will also open the door for other banks to use such transactions as a cleanup mechanism. However it would not have been possible without a dedicated team both from sellers and buyers and the professional support from Schoenherr as legal advisor and PWC on the sale side advisor.”

 

No burden on 2014 earnings resulting from the sale and no significant impact on the capital; Volksbank Romania solvency ratio remains strong – over 20%.

 

The parties have agreed that confidentiality be maintained on further details of this transaction.