Serbia to call auction for third €1.82bn NPL package

By bne IntelliNews October 1, 2019

Serbia has called an auction for another package of non-performing loans (NPLs), this time worth €1.82bn, the finance ministry said in a statement.

The government already successfully sold one package of NPLs earlier this year in its first tender for the sale of a portfolio of NPLs. The package worth €240mn was sold in February to German financial company EOS Matrix. The portfolio included loans from Serbia's insolvent Agrobanka, Nova Agrobanka, Univerzal Banka, Privredna Banka Beograd and Razvojna Banka Vojvodine.

Investors have until November 8 to file letters of interest, and the deadline for placing non-binding bids was set at December 2, while final offers can be submitted until April 15, 2020.

As of end-June, the share of gross NPLs held by Serbian banks decreased to 7.8%, reaching its lowest level since 2008, according to the newest data from Serbia’s central bank. The NPL ratio in the corporate sector stood at 8.1% through June and for retail at 4.9%.

The government aims to restructure the bad assets of banks that have been insolvent for more than 15 years.

In August 2015, Serbia’s central bank adopted an NPL resolution strategy, seeking to decrease the share of bad loans. The strategy’s goal is also to improve mechanisms for resolving corporate debt through the court system.

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