PCP Capital Partners, the investment vehicle of dealmaker Amanda Staveley is looking at acquiring a strategic stake in a Greek bank and using it as a platform to invest up to $2 billion in non-performing loans in the sector, Staveley said on Monday.
PCP, backed by large sovereign investors, is close to acquiring a stake in small Greek lender Pancretan Cooperative Bank, she told Reuters.
The bank would then be used as a platform to invest up to $2 billion in non-performing loans in the Greek banking sector over a period of 12-18 months, she said.
“PCP has been impressed with the work the government has undertaken to ensure the climate for foreign direct investment is ripe,” Staveley said in a telephone interview with Reuters. “We believe there is significant potential in managing non-performing loans from recapitalised Greek banks.”
Pancretan Cooperative Bank said in an emailed statement that up to now, it had not received a request for an expression of interest by PCP Capital Partners to participate in its capital.
Greek lenders successfully concluded a 5 billion euro ($5.54 billion) recapitalisation last year. But they have been grappling with problem loan portfolios due to a deep recession in the crisis-hit country, making it hard for borrowers – including large businesses – to service their debts and forcing the banks to make sizeable provisions for impaired credit.
PCP’s potential investment is the latest sign that international investors are starting to think that now is a good time to invest in Greece after years of economic turmoil.
In May, Greece’s Alpha Bank and Eurobank said they would transfer some troubled credit in large Greek companies to a platform set up with U.S. private equity firm KKR, as part of efforts to better manage non-performing loans.
But IFR reported in July that some Greek banks were growing increasingly pessimistic about the prospects of selling large chunks of their 110 billion euro stockpile of bad loans following a series of lacklustre bids from international investors.
Staveley’s PCP, which in 2008 put together a syndicate of Abu Dhabi investors to invest 3.5 billion pounds ($4.57 billion) in British Bank Barclays at the height of the financial crisis, set up a local office in Greece with around six people two months ago to scour the country for opportunities.
Around two years ago, PCP looked at acquiring a strategic stake in one of the major Greek banks but decided that the timing wasn’t right.
Pancretan is a cooperative bank with a network of 54 branches countrywide and 391 employees, mostly concentrated on the island of Crete. About 85 percent of its loans are to small and medium-sized businesses.
Based on its 2015 balance sheet it had assets of 1.44 billion euros, deposits of 1.01 billion euros and loans of 1.65 billion euros. Its CET-1 capital ratio stood at 6.46 percent in June 2016.
The Wall Street Journal first reported news of PCP’s possible investment.