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

Author

Listed:
  • Luisa Carpinelli
  • Giuseppe Cascarino
  • Silvia Giacomelli
  • Valerio Vacca

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 differences in the systems adopted by the banks for managing non-performing loans and in the amount of information available on the topics covered by the survey.

Suggested Citation

  • Luisa Carpinelli & Giuseppe Cascarino & Silvia Giacomelli & Valerio Vacca, 2017. "The Management of Non-Performing Loans: A Survey among the Main Italian Banks," Politica economica, Società editrice il Mulino, issue 2, pages 157-188.
    • Handle: RePEc:mul:je8794:doi:10.1429/87182:y:2017:i:2:p:157-188
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    Cited by:

    1. Drozd, Lukasz A. & Serrano-Padial, Ricardo, 2018. "Financial contracting with enforcement externalities," Journal of Economic Theory, Elsevier, vol. 178(C), pages 153-189.
    2. International Monetary Fund, 2016. "Bulgaria: Selected Issues Paper," IMF Staff Country Reports 2016/345, International Monetary Fund.
    3. Bilyana Bogdanova & Ingo Fender & Előd Takáts, 2018. "The ABCs of bank PBRs," BIS Quarterly Review, Bank for International Settlements, March.
    4. Buesa, Alejandro & Población García, Francisco Javier & Tarancón, Javier, 2019. "Measuring the procyclicality of impairment accounting regimes: a comparison between IFRS 9 and US GAAP," Working Paper Series 2347, European Central Bank.
    5. Andreas Jobst & Miss Anke Weber, 2016. "Profitability and Balance Sheet Repair of Italian Banks," IMF Working Papers 2016/175, International Monetary Fund.
    6. Jose M Garrido & Mr. Wolfgang Bergthaler & Ms. Chanda M DeLong & Juliet Johnson & Amira Rasekh & Anjum Rosha & Natalia Stetsenko, 2019. "The Use of Data in Assessing and Designing Insolvency Systems," IMF Working Papers 2019/027, International Monetary Fund.
    7. Nazim Belhocine & Mr. Daniel Garcia-Macia & Jose M Garrido, 2018. "The Insolvency Regime for Large Enterprises in Italy: An Economic and Legal Assessment," IMF Working Papers 2018/218, International Monetary Fund.
    8. Jose M Garrido & Emanuel Kopp & Miss Anke Weber, 2016. "Cleaning-up Bank Balance Sheets: Economic, Legal, and Supervisory Measures for Italy," IMF Working Papers 2016/135, International Monetary Fund.
    9. Emilia Bonaccorsi di Patti & Cristina Demma & Davide Dottori & Giacinto Micucci, 2019. "Bad loan closure times in Italy," Questioni di Economia e Finanza (Occasional Papers) 532, Bank of Italy, Economic Research and International Relations Area.
    10. Lucia Alessi & Brunella Bruno & Elena Carletti & Katja Neugebauer & Isabella Wolfskeil, 2021. "Cover your assets: non-performing loans and coverage ratios in Europe [Bias-corrected matching estimators for average treatment effects]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(108), pages 685-733.
    11. Lukasz A. Drozd & Ricardo Serrano-Padial, 2017. "Credit Enforcement Cycles," Working Papers 17-27, Federal Reserve Bank of Philadelphia.
    12. Bolognesi, Enrica & Stucchi, Patrizia & Miani, Stefano, 2020. "Are NPL-backed securities an investment opportunity?," The Quarterly Review of Economics and Finance, Elsevier, vol. 77(C), pages 327-339.
    13. Matteo Bugamelli & Francesca Lotti & Monica Amici & Emanuela Ciapanna & Fabrizio Colonna & Francesco D�Amuri & Silvia Giacomelli & Andrea Linarello & Francesco Manaresi & Giuliana Palumbo & Filippo , 2018. "Productivity growth in Italy: a tale of a slow-motion change," Questioni di Economia e Finanza (Occasional Papers) 422, Bank of Italy, Economic Research and International Relations Area.
    14. Jose M Garrido, 2016. "Insolvency and Enforcement Reforms in Italy," IMF Working Papers 2016/134, International Monetary Fund.

    More about this item

    Keywords

    Credit Recovery; Banks; Corporate Financing.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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