Eurobank, Greece’s third-largest lender, has announced the acquisition Grivalia Properties REIC. Grivalia Properties is the leading Greek Real Estate Investment Company (REIC) and amongst the 15 largest companies in the Athens Stock Exchange. Grivalia is currently owned by Canadian investment company Fairfax Financial Holdings, through a 51.4% ownership stake. Fairfax also owns 17% of Eurobank.
Grivalia specialises in leasing investment properties, with a focus on corporate clients. Key segments include offices, logistics parks, retail outlets, mixed use and special use property portfolios. Grivalia’s portfolio includes 26 office properties, 30 retail / commercial properties, four Industrial estates and 21 mixed-use and special-use properties in Greece, Romania and Bulgaria.
The acquisition has the form of a share swap, with Eurobank increasing its capital by $1.13 billion. The net acquisition value was not announced.
The merger creates the strongest capital bank in Greece, with a total 19% capital ratio, ready to serve its customers, to return to develop and support economic activity in Greece and Greece southeast Europe.
Eurobank plans to accelerate substantially reducing the non-performing loans (NPLs) to around 15% by the end of 2019 and a one - digit rate to in 2021, with the NPL split of about € 7 billion in a single transaction.
Eurobank’s current non-performing loans, based on results of the past 9 months, are estimated at € 17.7 billion. According to Eurobank, it expects that the non-performing loans will be reduced by 15% by the end of 2021, and as a result should manage to lower its NPE index (Non-Performing Exposure) to a single digit percentage number which will bring it closer to European standards.
Eurobank’s core capital (CET1 with the full implementation of the Basel III framework increases to 13.8% and the pre-projections earnings to € 0.28 per share. The single group aims at strong sustainable profits per share and in excess of 10% of equity (RoTE) in 2020.
The utilisation of the top actors in the Real Estate Management of the Grivalia Group, headed by Mr. Georgios Chrysikos, will release the value of existing and future real estate assets of the group. Mr. Chrysikos will be assigned at the post of non-executive Deputy Chairman of the Eurobank’s Board of Directors and will join the Strategic Planning Committee.
Sources
Grivalia Properties REIC
http://grivalia.com/en/
Eurobank Announcement of Grivalia Merger
https://www.eurobank.gr/en/group/grafeio-tupou/etairiki-anakoinosi-26-11-18
Reuters: Greece's Eurobank to acquire Grivalia Properties
https://www.reuters.com/article/grivalia-ma-eurobank/update-2-greeces-eurobank-to-acquire-grivalia-properties-eurobank-source-idUSL8N1Y012E
Greece’s Eurobank to Acquire Grivalia Properties
https://www.wsj.com/articles/greeces-eurobank-to-acquire-grivalia-properties-1543260042