Greek payments firm Viva Wallet is reportedly planning to secure €500 million in capital to support its virtual banking business, according to Reuters which cited two sources familiar with the matter.
As reported, Viva Wallet officially acquired the banking license of Praxia Bank after the completion of the share purchase agreement between AMC Oak (Shareholder) and Viva Wallet Holdings (purchaser).
The Athens-based firm has appointed Jefferies to advise on the €500 million (appr. $592 million) raise which aims to offer investors stakes in a newly established legal entity that is expected to take over Viva Wallet’s existing banking loans (according to the sources).
The sources noted:
“Viva wants to be a neobank without a loan book.”
They claim that the suggested deal has been approved or given the green light by European regulatory authorities. If the deal is finalized, it would offer a new way for smaller European banks to manage their loans. This could make it easier for them to conduct business and raise funds.
Established in 2005 by company CEO Haris Karonis, Viva Wallet intends to sell loans on its books to a special purpose vehicle (SPV) within 1 business day or 24 hours from finalizing deals with them. This should remove or lower the risk from the bank’s balance sheet, the sources said.
This newly proposed structure shows how Greek financiers have reevaluated or reassessed traditional bank funding models, after the nation’s historic debt crisis. We might see more of these new financing methods, due to the COVID-19 outbreak and resulting economic challenges.
Viva Wallet provides cloud-powered payment services in 23 different European countries. It supports payments in euros, the British pound and the Romanian leu.
In January 2020, Viva revealed that it had entered a deal to acquire Greece based digital challenger Praxia Bank, which is owned by Barclays’ former CEO Bob Diamond and David Schamis, a partner at Atlas Merchant Capital.
The acquisition of Praxia Bank was approved by the Bank of Greece this month, according to the sources.
