NPL ratios remain high in more than 10 European countries. With the banking landscape rapidly changing and economic recovery in sight, the management of non-performing loans is at an inflection point as it moves into its third wave – from a crisis activity towards NPL ecosystems.
Exhibit: Expansion of the NPL solution set – from crisis onset to present day
This is an enticing situation for the various stakeholders. Banks, investors, servicers, data managers, and technology developers should be on the lookout for opportunities in NPL businesses and markets, some of them collaborative. These should include increasing partnerships, making use of digital tools, and platform businesses. And public institutions can still play an important sponsoring role. The painfully slow post‑crisis clean‑up process should start to accelerate now that the pieces of the NPL puzzle have started falling into place.