Non-performing exposures (NPEs) keep posing a threat to the stability and economic performance of many financial institutions and European countries. Still, they also represent a significant source of value, when carefully assessed and professionally managed. Expected recoveries can be reliably estimated, and future cash flows sold on the market, providing banks with a source of funding and additional income. Furthermore, de-risking bank balance sheets increases financial resilience and alleviates supervisory concerns.
Accordingly, policy makers have increasingly focused on NPEs, and an ambitious action plan has been agreed by European authorities, to foster new solutions and tools, while complying with state-aid rules. This course brings together different perspectives, including both policy-related and management-oriented aspects. It guides participants through the subtleties of NPE definition and measurement, illustrates ways of measuring past performance and forecast future cash flows (including those associated with real estate collateral), discusses origination techniques that can be used to orchestrate the sale of NPEs to special vehicles funded by third-party investors. The link between NPEs, profitability and loan supply is critically discussed, to explore the benefits of lower NPE levels for economic growth. Various policy options are presented in detail, including loan sales to private investors and State-sponsored asset management companies.
The course also reviews supervisory initiatives that have been put forward to ensure that non-performing exposures are promptly recognised, adequately provisioned and managed in a way that is both efficient and sustainable. Finally, it provides a in-depth discussion of the impact of State aid rules on extraordinary schemes aimed at facilitating NPE disposals.
Tailored sessions will be covered by senior experts from the public and private sector, with extensive experience in NPLs management.
You will learn how NPEs and other NPAs are defined and classified in Europe
You will be able to master the key variables affecting future recoveries on bank loans
You will get a solid understanding of the key success factors behind a loan sale and securitization
You will get the whole picture on supervisory initiatives on NPLs and how they should be understood by banks
You will be aware of the main policy tools that EU institutions plan to deploy to further address the NPE issue, and how they will interact with State-aid rules