Non Performing Loans and Atlante Fund – Italian Banks: more secure?
An acronym, of Anglo-Saxon origin, very often used since the outbreak of the crisis to date, is Npl, which derives from Non Performing Loans whose literal meaning is “non-performing loans” but which could also be translated as impaired loans.
With these terms we mean all those credits, as in the case of the banking system, which are difficult to collect, in the sense that they will be difficult to repay within the time and in the figures provided for in the contract.
The amount of Npl that some Italian banks have contracted (an example is with MPS among the largest Italian banks) is so high that it has put their financial health at risk. From here various measures have been initiated aimed at rebalancing the amount of these credits (for example with mergers or transfers), and above all we have arrived at the establishment of the Atlante Fund (one of the main lending banks is Unicredit) which, however, should have character merely transitory.
Generally, when you have Npl, these are purged with securitization operations, but if their percentage is too high, you have to intervene with much more drastic systems.
Non-performing loans, problem positions or “risk” exposures
Non-performing loans include bank non-performing loans, restructured exposures or overdue loans, up to the less “serious” assumptions such as those defined as substandard. What all these realities have in common are: the difficulty for a bank to obtain the loaned capital at the contractually agreed conditions, and the concrete possibility that to return to a part one must accept losses.
In fact, in the case of renegotiation of a loan, with redefinition of the deadlines to meet the needs of the creditor (such as in the case of balance and removal, etc.), the bank is satisfied with a minor return putting it on the balance sheet as bad debt or as a bad debt.
In the case of non-performing loans, there is no certainty, but only the well-founded suspicion that that credit cannot be recovered in full, in part, or in any case within the time allowed. Problems are less serious in which the creditor is unable to comply with the conditions but only for temporary reasons. In these cases the credit will still be more easily recoverable.
Unfortunately, despite the chasms that have opened up in the budgets of so many banks, the fact remains that, if you hold modest amounts to be repaid, it is unlikely that you will have an easygoing bank to avoid the evolution in an NPL.
This does not remove the fact that being helped by experts to renegotiate at least the conditions of the debt can in many cases still be useful.