On friday 3rd of April I had a very interesting and insightful conversation with with Giovanni Bossi following the questions raised by Morya Longo. We talked on a video conference call open to some 250 professionals that contributed to an intense Q&A section at the end.
Below the full video of the event
Main takeaways of the conversation include:
1-a significant increase in volume of insolvencies expected as a consequence of economy lockdown
2-a relevant challenge for banks divided between the request of regulators of not reducing lending and the need of not wasting the achievements of 4 years of intense activity aimed at reducing bad loans and increase captial buffers
3-a quite likely reduction in prices offered for NPL portfolios due to longer recovery timing and increased country risk premium
4-a substantial pressure on credit management industry that will face reduced turnover and profit margins as well as increased workload
5-a difficult puzzle with UTP exposure that will show increased default probability as well as higher need of financial support and advisory in order to face the crisis
Fourther comments will come in future posts
Are you interested in Italian banks and NPL/UTP market? Ask for a briefing (in person or via conference call) by sending me a private message. I am also availablefor consulting projects on Distressed Assets pricing and Portfolio Management.
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GLG – Gerson Lehrman Group – Council Member