The Russian client requested ABC to help clean the old Non-performing Loan (NPL) portfolio, for which an exit strategy was not yet in place. ABC developed the exit strategy for those clients and improved the late collections strategy, leading to decreased NPL stock and additional recoveries in friendly exits.
ABC reviewed client’s internal processes and, before developing an exit strategy, redesigned the late collections process. The implemented changes consisted of:
Credit counseling introduced for mortgages
Cooperation and motivation scheme with external partners
Debt Sale process designed
Individual based approach changed for automated and standardized segment-oriented approach
Write-off process designed and tested (IT part)
Exit strategy running after 3 months of implementation by the local team.
Full write off underway for suitable segment of the portfolio
Debt sale not feasible due to needed IT changes and prices on the market
Decrease of NPL stock within the first 12 months of cleanup start
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