Greece is still recovering from the financial crisis. In the decade since, the country has suffered an extended period of financial instability, and, on occasion, struggled to secure the bail outs necessary to keep the country afloat. However, after three bail outs the country ended its recovery programme somewhat positively, with an improved credit rating enabling it to borrow on the financial markets again. Although the economic crisis has stifled more traditional types of transactional work for law firms, the ramifications of it have been the driver for some notable deal activity.
A significant privatisation programme was a condition of Greece’s third bailout, and enforced sales have produced some large M&A transactions recently. State assets across transport, ports and energy sectors were put on sale and in 2017 the country raised €1.4 billion through privatisation. Recent highlights include the sale of a 24% stake in ADMIE to State Grid Corporate of China and the divestment of 50.1% stake in Hellenic Petroleum.
Banking was arguably the sector worst affected by the financial crisis in Greece. Since 2013, 15 Greek banks have closed, with three of these occurring in 2017. Banks’ challenges have also meant consolidation has been a recurring theme in the market for several years, and 60 Greek banks are now just four. Recent banking M&A includes the sales of United Bulgarian Bank and Vojvodjanska Banka by National Bank of Greece to KBC Group and OTP Banka respectively. Lenders’ selling loan portfolios is another area creating legal work.
The European Central Bank introduced regulations which have required Greek banks to reduce their non-performing loan (NPL) exposure, which amounted to around half the total of Greek banks’ loan portfolios. By the end of first quarter in 2017, the ratio of NPLs was decreased from 50.6% to 46%. Sales continued in 2018 with National Bank of Greece, Piraeus Bank and Alpha Bank collectively selling loans amounting to approximately €5 billion in book value.
To aid banks in divesting of non-performing portfolios, Greece has relaxed its rules on banks selling loans to foreign investors. Another recent change means banks are permitted to sell mortgage-backed loans. Following the regulatory update, Piraeus Bank initiated the country’s first ever sale of real estate-backed NPLs, with Bain Capital the acquirer.
A notable development in the capital markets area has been Greece’s return to the bonds market in 2017 after a three year absence. More recently, in February 2018, the country raised €3 billion in new money (its previous issue was a refinancing) for the first time since 2014.
Another area where firms has been some significant legal work is in projects in the infrastructure sector, where tender procedures for airports motorway and marinas are in progress.