The management of unlikely to pay has been the focus of intervention by Stefano Scopigli, Partner and Managing Director of YARD Credit & Asset Management as panelist at the workshop on Non Performing Loans, emerging opportunities for operators and investors organized by Il Quotidiano Immobiliare, on Thursday October 13 in Milan.
The main theme of the meeting with top experts in the Non Performing Loans sector, was that of the active management of distressed assets, through the analysis of the financial, real estate, tax and legal regulatory dimension of the NPL market.
“There is talk of 200 billion non performing loans” – says Stefano Scopigli – “but if we thought of unlikely to pay, we must imagine almost the double: a potential part of the market ready to turn into distressed loans.
It is essential to change the type of approach to non performing loans: no longer distressed and doubtful loans, debtor considered as enemy and risk, but as real estate products, debtor as an interlocutor to dialogue with, and opportunities.
Giving banks an analysis and reading tool to reason and figure out how to approach substandard or doubtful loans representing the potential non performing loans means putting them in a position to decide in time what to do. Anticipating and not chasing after the problem.
The real challenge is to avoid transitions to the non performing category, which entails a number of problems. In this sense, Risk Assessment is fundamental in allowing advance planning on credit lines. Too often there is a strong interpretation of credit and too little for the assets that were pledged as securities.
Discontinuity in the payment of installments creates an early warning: already by that stage an analysis should be made to understand what is the underlying issue to the guarantee and if the underlying issue, maintained and marketed properly, is able to meet the needs of the debtor and especially of the creditor. The transition to the judicial market comprises a depreciation and a reduction in value of the same.
Preventive management of non performing loans is the key to strategic planning: placing on the market at the best possible price of the product in your system and mapping the portfolio in a timely manner to understand the actual extent signifies having a very clear idea of the risk matrix of each asset”.
