Estimating Recovery Curve for NPLs

Rocci, Roberto; Carleo, Alessandra; Staffa, Maria Sole

doi:10.1007/978-3-030-99638-3_64

Cited by 2 publications

(3 citation statements)

References 8 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Non-performing loans classified as losses (where a 100% provision has been made) by the prudential guidelines are often difficult to recover. Some accounts under this category are often called hardcore bad loans or irrecoverable/uncollectable (Natufe & Evbayiro-Osagie, 2023;Rocci, Carleo, & Staffa, 2022). Studies such as Ivan (2022) and Fenech, Yap, and Shafik (2016) explain that debt recovery involves engaging the services of a third party who acts as the bank's agent to recover bad debts.…”

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

See 1 more Smart Citation

The criticality of credit recovery in banking system stability: A GMM estimation

Amadi,

Adetiloye,

Amadi

2024

5002

View full text Add to dashboard Cite

This study examines the criticality of credit recovery on banking system stability in Nigeria using data from 2007 to 2020. The system generalized method of moments (SYS-GMM) was used to analyze the data and determine the presence of cointegrating relationships among the variables. The findings revealed that credit recovery positively and significantly influences banking system stability. It was discovered that the recovery rate positively and significantly impacts the banking system stability in the short and long terms. In contrast, recovery expense only negatively and significantly affects the banking system in the short term. This implies that credit recovery is critical in business endeavors and operations for banks. Hence, the longer the delay in recovering bad debts, the more banks lose the opportunity to earn income from substitute investments, and collateral may lose value. Therefore, this study recommends that banks' management aggressively pursue the repayment of bad loans and maintain favorable and minimal recovery expenses, particularly with external debt recovery agents, to ensure that the cost of recovery is not higher than the amount recovered.

show abstract

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

“…Gaining insight into how these factors change over time is increasingly regarded as critical when making lending decisions. Specifically, it is crucial to be mindful of the likelihood of default (Li, Chen, & Yang, 2022;Rocci et al, 2022;Wang et al, 2020).…”

Section: Management Of Loan Defaults and Debt Recoverymentioning

confidence: 99%

The criticality of credit recovery in banking system stability: A GMM estimation

Amadi,

Adetiloye,

Amadi

2024

5002

View full text Add to dashboard Cite

show abstract

“…In Section 3.2, we apply our method to real data, while some conclusions and final remarks are discussed in Section 4. This is the full paper version of [34] and a completion of the working paper [35].…”

Section: Introductionmentioning

confidence: 99%

Measuring the Recovery Performance of a Portfolio of NPLs

2023

View full text Add to dashboard Cite

The objective of the present paper is to propose a new method to measure the recovery performance of a portfolio of non-performing loans (NPLs) in terms of recovery rate and time to liquidate. The fundamental idea is to draw a curve representing the recovery rates over time, here assumed discretized, for example, in years. In this way, the user can get simultaneously information about recovery rate and time to liquidate of the portfolio. In particular, it is discussed how to estimate such a curve in the presence of right-censored data, e.g., when the NPLs composing the portfolio have been observed in different time periods, with a method based on an algorithm that is usually used in the construction of survival curves. The curves obtained are smoothed with nonparametric statistical learning techniques. The effectiveness of the proposal is shown by applying the method to simulated and real financial data. The latter are about some portfolios of Italian unsecured NPLs taken over by a specialized operator.

show abstract

Estimating Recovery Curve for NPLs

Cited by 2 publications

References 8 publications

The criticality of credit recovery in banking system stability: A GMM estimation

The criticality of credit recovery in banking system stability: A GMM estimation

Measuring the Recovery Performance of a Portfolio of NPLs

Contact Info

Product

Resources

About