Former bad loans amounting to 8 billion have been restructured and have already returned to the banks from the primary market, while servicers estimate that 10 billion of regulated loans that have been securitized (secondary market) may also end up as performing loans in the banks’ portfolios in the next 2-5 years, as long as the objections of the European supervisor are overcome.
Moreover, more than 80% of the recoveries carried out by the non-performing loan management companies were initiated by consent, while out-of-court settlement is on the rise.
The out-of-court settlement in May
Out-of-court settlement reached record levels in May totaling 5,435 debt settlements corresponding to 1.83 billion euros of initial debts while an additional 515 million euros are in the final stage of settlement.
According to the optimistic scenario of the Special Secretariat for Private Debt Management, 2.3-billion-euro settlements are expected in the next five months and 1.9 billion euros according to the basic scenario.
The number of new applications on the platform increased in May 2023, following recent improvements to the out-of-court mechanism, and reached 4,243, up by 900 applications from the average of the previous six months. The final submissions of applications were also increased by 50%, compared with the previous months.
