Impaired loans, how profits could grow for the sector

Tmr on mortgage and unsecured NPLs worsened, on average between 2022-2024, while there was an opposite trend for mortgage NPLs. "A phenomenon," Thea continues, "that could be read as a normalisation of the courts' timelines, 'disposed of' the blockage caused by Covid. As for the increase in recovery rates, 75 per cent of the operators attribute it mainly to three reasons: the collaborative approach of the debtor; servicers' sectoral skills; and the availability of new finance.

Three quarters of the market has stable or negative expectations in terms of expected stocks and believes that new technologies, player consolidation and, finally, shrinking margins will have a high impact on the sector.

These expectations could, however, be affected by the project announced in recent days by the government as part of the Budget Law 2026 (now being examined by Parliament): that is, to encourage the transfer to private operators, through Amco (credit management company of the MEF), of a part of the credits of local authorities, most of which are currently managed by the Revenue Agency. It is a game worth a total of about 43 billion, which private servicers are naturally looking at with interest. It would be a choice,' says the lawyer Marco Rossi, president of the Alma Iura scientific committee, 'destined to produce results of efficiency and this, we must not forget, could have a positive social impact for the entire population.

Npe. Non-performing exposures are loans, such as mortgages and loans, granted by banks (especially during the financial crisis of 2008-2011) that have a high risk of not being repaid regularly. This is because the debtors are (or are likely to be) in financial and economic difficulties. Npe include 3 categories: non-performing loans (Npl), probable defaults (Utp) and exposures with payment delays of more than 90 days (Past due).

NPL. Non-performing loans, better known as 'non-performing loans', represent claims against insolvent debtors, i.e. debtors who are no longer able to repay their debts, either in full or in part.

Utp. Unlikely to pay are loans granted to debtors whose repayment difficulties, although present, can still be overcome through interventions such as debt restructuring or the provision of new finance. These loans are not yet non-performing loans, but the bank considers it unlikely that the debtor will be able to meet its obligations without assistance.

Past due. These are those loans for which the debtor has not made payments due for more than 90 days. Although they are at risk, they are not yet classified as NPLs or Utp, but require attention and monitoring.

Stage 2. Stage 2 indicates a phase in which a loan has undergone a significant increase in risk compared to when it was initially granted. Even if the loan is not yet in serious difficulty, the bank monitors it closely because repayment problems may arise in the future.

Credit in bonis. These are those that the bank considers to be fully recoverable, in accordance with the terms of the loan agreements, with no signs of risk deterioration.

Originator. It is the bank or financial institution that initially grants the loan to the customer. Subsequently, this loan may be transferred or sold to other operators specialised in, for instance, the impaired loans market.

Master servicer. This is the operator responsible for the overall management of a portfolio of receivables. He/she is in charge of coordinating activities to ensure the proper recovery of receivables.

Special servicer. The special servicer focuses on credits that are more difficult to recover, such as NPLs. Its task is to maximise debt recovery by seeking agreements with debtors, promoting restructuring or, if necessary, taking legal action.