Czech debt collectors obtained a ten billion loan package in Romania

Czech financiers from the APS group have another important niche in South-Eastern Europe, which they have been focusing on for a long time. They bought a package of loans with a nominal value of ten billion crowns from the Greek bank Piraeus.

“Our investment team has been working on this transaction for over a year. It is a significant success in our key market,” said Martin Machoň, CEO of APS.

APS financed 70 percent of the entire transaction with its funds. The European Bank for Reconstruction and Development provided the remaining 30 percent. Neither party disclosed the exact value of the transaction. Usually, however, for bad loans, it varies in units of a percentage of their nominal value.

APS subsequently recovers the receivables obtained in this way from the companies. The advantage in this case is that they are loans secured by real estate.

“It is the largest sale of non-performing loans carried out in Romania in the last four years,” said APS head of investment Viktor Tóth.

The European Bank for Reconstruction and Development participates in similar transactions and supports the local banking sector with the aim of enabling local financial institutions to provide new loans and thereby stimulate the economy.

“This transaction significantly contributes to the functioning of the secondary loan market in Romania, which forms a critical part of a well-functioning financial system,” noted EBRD Manager Alexander Saveliev.

The domestic holding APS is at home in Romania. The company took over a large portfolio of bad loans dating back to the Greek financial crisis two years ago. In addition, the head of APS Machoň previously helped the Rapid Bucharest football club out of its problems.

Prague-based APS currently operates in fifteen markets. It manages portfolios of so-called non-performing loans with a nominal value of over eleven billion euros.

Competitors of the Czech APS on the international receivables market include, for example, the Swedish company Intrum. Similar to domestic financiers, this company also worked with the Greek Piraeus Bank in previous years. Specifically, last year, Intrum withdrew from the Romanian market.

Banks often get rid of bad loan portfolios because it is more profitable for them than to collect this type of debt on their own. Financial institutions will thus clear their accounts and free up capital for other business.