Qualco participated in a lively debate on the opportunities and challenges faced by servicers seeking to enter the CEE market at the NPL Europe Autumn Conference today. In light of rapidly changing regulation, originators across the region are gearing up to sell their non-performing loan (NPL) portfolios, and the panel offered their insight on the pitfalls to avoid and opportunities that will present themselves.
The consensus was that poor data quality and inefficiencies in legal enforcement processes will create a significant challenge to investors and servicers. Often originators’ customer data is inaccurate, incomplete or out of date, which not only makes it hard for investors to value the portfolio, once it arrives with the servicer it is more difficult to profile and therefore apply the most appropriate collection method.
The panel agreed that the opportunities presented by the opening up of the debt sale market in this region would outweigh the problems it presents, and that the most exciting area in servicer development would be the use of big data and artificial intelligence, and the entrance of specialist servicers.
Speakers on the panel included Frixos Ioannidis, Servicing & Portfolio Management, Deputy Director at Qualco, Bill Hancock, Managing Partner at Resolute Asset Management in the UK, Dragoljub Sretenović, Associate at BDK Advokati / Attorneys at Law based in Serbia, Lech Giliciński, Partner at K&L Gates in Poland and Boris Vujicic, Managing Partner at managing consultants, Black Pine.
Mr Vujicic indicated that investors in the region are looking at a number of ways in which to engage with servicers; outsourcing is the natural option but many are exploring joint ventures or acquisition. Whatever their path, the clear requirement is for servicers to have scale and scope to handle the complexities the region presents.
Qualco was a sponsor of the event, which brought together key originators, investors, servicers and financiers from all over Europe to discuss non-core and non-performing assets still on the books of European banks. With deal volumes expected to exceed the €130bn mark in 2016 the conference programme focused on the opportunities, triggers and risks in deleveraging European NPLs.