June 3, 2019 / 8:11 AM / 5 months ago

UPDATE 1-Piraeus Bank sets up platform with Intrum to service bad loans

* Intrum to acquire 80% of new platform

* Piraeus bank will hold 20%

* Transaction close seen on Oct. 1 (Adds details)

ATHENS, June 3 (Reuters) - Greece’s biggest lender Piraeus Bank said on Monday it had teamed up with Sweden’s Intrum to set up a platform to service its 27 billion euro ($30 billion) bad loan portfolio.

Soured loans are the biggest challenge facing Greek banks, the legacy of a debt crisis that shrank the economy by a quarter and drove unemployment to a high of nearly 28 percent in 2013.

The value of the new platform was estimated at 410 million euros, Greece’s largest lender by assets said. Intrum had agreed to pay 328 million euros to acquire 80% of it, while Piraeus bank will hold 20%.

Piraeus and Intrum aim to close the transaction on Oct. 1.

“This transaction is a milestone for Piraeus Bank in terms of its de-risking strategy,” said Piraeus Bank Chief Executive Officer Christos Megalou.

The initial term of the contract will be for 10 years and the new platform would also manage non-performing loans of third parties, the bank said, adding that a second company would be formed to manage its 1 billion euro real estate assets.

Piraeus Bank, which is 26.2 percent owned by the country’s HFSF bank rescue fund, reported lower first quarter net profit compared to the previous three-month period on Monday.

It said it was on target to meet its 2019 target for reducing non-performing loans of 3.5 billion euros and that the sale of its bad loans portfolios of 1.2 billion euros gross book value would be concluded soon.

$1 = 0.8953 euros Reporting by George Georgiopoulos and Renee Maltezou Editing by Edmund Blair

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