The Management of Non-Performing Loans: A Survey Among the Main Italian Banks

33 Pages Posted: 15 Sep 2016

Date Written: February 2016

Abstract

This study presents the results of a survey carried out by the Bank of Italy in 2015 on the efficiency of credit recovery procedures undertaken by the main Italian banking groups. The recovery rate for liquidations in the years 2011-2014 was slightly above 40 per cent, and the largest share of the recovery was obtained within the first five years from the start of the procedure. Four years after the debt restructurings began, almost two thirds are still underway. The average age of liquidations at the end of 2014 was twice that of debt restructurings and eight percentage points more of loans being restructured are collateralized than those being liquidated. In 2014 the management of non-performing loans absorbed 2.8 per cent of banks’ operating costs, a larger share than in previous years. The study found not only differences in the systems adopted by the banks for managing non-performing loans but also differences in the amount of information available on the topics covered by the survey.

Keywords: credit recovery, banks, corporate financing

JEL Classification: G21, G33, K22

Suggested Citation

Carpinelli, Luisa and Cascarino, Giuseppe and Giacomelli, Silvia and Vacca, Valerio Paolo, The Management of Non-Performing Loans: A Survey Among the Main Italian Banks (February 2016). Bank of Italy Occasional Paper No. 311. Available at SSRN: https://ssrn.com/abstract=2838708 or http://dx.doi.org/10.2139/ssrn.2838708

Luisa Carpinelli

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giuseppe Cascarino

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Silvia Giacomelli

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Valerio Paolo Vacca (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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