(Finance) – “The analysis of our Research Office highlights an increase in the stock of NPEs and the NPE ratio at a European level, in contrast to what is happening on the Italian market, where it is decreasing. At a European level, the overall stock of credit problematic increases by 16 billion. It is a modest but still appreciable increase. Italy, in contrast, drops by another 5 billion. It is certainly an encouraging figure as regards the production of new problematic credit, therefore the flow to default in ’24, ’25 and ’26 a slight increase, from 1.01 to 1.29 percent, in the incidence on the performing of new problem loans produced. A forecast which records an improvement compared to that of last year we had imagined an acceleration of this phenomenon that was not dramatic but a little more severe.” This is what he said Frederik Geertman, CEO of Banca Ifis, on the sidelines of thirteenth edition of the Npl Meeting, the annual event dedicated to the impaired credit industry which took place today in Cernobbio.
“We attribute these data to two drivers, two causes. The first – he explains Geertman – is that the unemployment in Italy it is lower than what we thought last year, by about one percentage point. The second is that the cost of money in our country has fallen more than we thought and this helps businesses in particular. The combination of these two factors means that analysis by our Research Department gives us a forecast for the next few years characterized by a lower risk of increase”.
In such a scenario Geertman reiterates the appeal launched by president of Banca Ifis, Ernesto Fürstenberg Fassio, for one European-level modification of the legislation on calendar provisioning as it offloads the pressure of recovery on debtors. “Calendar provisioning – highlights Geertman – in fact it forces banks that hold NPLs to lower their value in a fairly short timeframe, not always aligned with the times it takes to recover a loan. Banca IFIS buys credits from others but is exposed to the same rule. An actor like us who actually helps the banks to reduce the burden finds himself, therefore, buying credits that are already heavily devalued and must further devalue them in a short time, thus putting a little pressure on the time needed to recover. Times that are not always governed by us but must be managed, they must be optimized by thinking about the debtor’s possibilities of returning the money to us. It seems to us that a rule applied to purchased credits is a bit useless because these credits are already heavily devalued, a penalizing rule for those who do this job. In this sense, a change to this regulation would certainly be a help to this part of the industry which still has the banking form.”
The key word at this year’s Npl Meeting was “social sustainability”. “In the NPL context, Banca Ifis has interpreted social sustainability as financial reinclusion of the debtor. It means – he explains Simona Arduini, vice president of Banca Ifis and member of the Social Banking NPL steering committee – rehabilitate the debtor within the financial system. Therefore making the debtor a customer, allowing him to escape from that debt spiral and be able to easily use a whole series of services that the Bank offers. To achieve reinclusion, a complex of activities is needed which must be structured in a multi-year plan. We have divided these activities into four strands. We can define the first as extrajudicial in judicial matters: it means making it easier to get out of a judicial recovery for all those debtors who want to join a repayment plan or a settlement and write-off. Secondly we have the digitalisation of the recovery process: through access to a portal, the ‘Paga clear’ portal, we want to allow debtors to be able to personalize their flows and deadlines to better manage their debt independently. Furthermore, we have envisaged a whole series of support actions for the natural person ranging from help in finding a job to psychological support up to financial education pills, obviously provided with the collaboration of institutional entities. Finally, we monitored our recovery network and included social sustainability KPIs in the remuneration of the collection and also in the remuneration of the managers of the parent company and the two subsidiaries that deal with non-performing loans”.