World Bank/FinSAC: International Conference on NPL Resolution

May 15-16, 2018

Vienna, Austria

  • May 15-16, 2018: Encouraging a comprehensive approach to resolving non-performing loans (NPLs) was the focus of a two-day World Bank conference in Vienna. As many of its client countries continue to experience high levels of NPLs, the World Bank Financial Sector Advisory Center (FinSAC) convened some 100 delegates from 25 countries to share international experience and discuss holistic ways of addressing the issue.

    Reducing NPLs in a sustainable manner is a complex task that typically requires a broad range of coordinated policy measures. The Vienna conference examined the following four key areas, with expert input including from the World Bank, European Central Bank, European Banking Authority, European Commission and European Bank for Reconstruction and Development: 

    1.            NPL recognition, including latest initiatives from standard setters on harmonization of regulatory definitions of NPLs and forbearance, new accounting standards (IFRS 9) that represent a transition from incurred loss to expected loss approaches, and the ECB’s guidance to banks on the resolution of NPLs. The seminar also included a specific session dedicated to collateral valuation. 

    2.            Workout strategies: Different national experiences, including the lessons learned, were offered by senior representatives from Slovenia, Bulgaria, Malaysia, Greece, Spain, Austria, Latvia, and Serbia. Topics addressed included operational frameworks for the workout process, and government-led approaches towards resolution, including the use of asset management companies.

    3.            Enabling environment for NPL resolution with an emphasis on the legal environment that determines prospects for creditors to recover their claims, considering the state of distress of the debtor. 

    4.            Development of markets for NPLs: A panel of industry representatives discussed prospects and preconditions for the further development of markets for NPLs in the region.

  • Agenda (pdf)

  • Presentations – Day 1

    ECB Guidance to banks on NPLs

    Sharon Finn, European Central Bank


    IFRS 9: Impact on banks

    Tony Clifford, Ernst & Young, EMEIA Financial Services, UK


    Regulatory developments - EBA perspective

    Oleg Shmeljov, European Banking Authority


    Prudential policy considerations of NPLs and expected loss provisioning

    Katia D’Hulster, Finance, Competitiveness & Innovation (FCI), The World Bank Group


    A holistic approach to NPL resolution

    Karlis Bauze, FinSAC, The World Bank Group


    NPL resolution at bank level – the Slovenian experience with MSME NPL resolution Darko Torkar, Banking Supervision, Bank of Slovenia


    The Workout Unit – a practitioner’s perspective

    Teodora Petkova, UniCredit Bulbank, Bulgaria


    International experiences with AMCs

    Caroline Cerruti, Finance, Competitiveness & Innovation (FCI), The World Bank Group


    NPL resolution Danaharta, Malaysia

    Hamidy Hafiz, Corporate Debt Restructuring Committee (CDRC), Malaysia


    Lessons learned from the work of DUTB

    Speaker: Imre Balogh, Bank Asset Management Company, Slovenia


    Presentations – Day 2

    Importance of Legal aspects of NPL resolution (collective and individual, collateral enforcement, auctioning process)

    Andres F. Martinez, Finance, Competitiveness & Innovation (FCI), The World Bank Group


    The expected impact of the proposal for Restructuring and Second Chance Directive on NPLs

    Ondrej Vondracek, European Commission


    Out of Court Restructuring Principles and alliance with Legal Framework

    Theodore Athanassopoulos, Alpha Bank, Greece


    Collateral valuation – an appraisers’ perspective

    Krzysztof Grzesik, The European Group of Valuers Associations (TEGOVA)


    Valuation methods in financial markets – a regulatory perspective

    Speaker: Sharon Finn, European Central Bank


    Spanish Mortgage collaterals appraisal system: methodology, reporting, appraisal companies, and supervision

    Miguel Angel Lopez Gomez, Bank of Spain


    NPL markets in ECA – state of play

    Andreea Moraru, Financial Institutions, EBRD


    Prerequisites for developing markets for distressed assets

    Anete Daukste, KPMG, UK


    NPL servicing platforms. Effectiveness of debt collection agencies in the region

    Martin Machon, APS Holding


    Practical lessons from the NPL resolution in Latvia

    Elmars Zakulis, Bank of Latvia


    Lessons learned from the NPL Working Group in Serbia

    Milan Kovač, Ministry of Finance of Serbia and Marija Ranđelović, National Bank of Serbia


  • Collateral valuation in the CESEE region

    Prepared by Karlis Bauze
    FinSAC, The World Bank Group


    Public AMCs international experiences

    Prepared by Caroline Cerruti
    Finance, Competitiveness & Innovation Global Practice, The World Bank Group


    Regulatory and supervisory developments for NPLs

    Prepared by Katia D’Hulster
    Finance, Competitiveness & Innovation Global Practice, The World Bank Group