All the experienced entrepreneurs know that companies should focus on their core competence and main source of revenue, i.e. the so-called core business.
Therefore, major companies should decentralize those activities requiring skills other than those relating to their core business, thus avoiding the establishment of resources not dealing with the main activity.
Well, the core business of a traditional banking institute is the lending of money against the payment of an interest and the management of any excess money by investing it in financial instruments. The merchant banks focus on the second aspect, while preserving the same scope.
Considering the above, it is difficult to understand why in the last years the credit institutions (nomen omen) have invested their resources somewhere else. Insurance services, property management, real estate brokerage; those volumes may result in big discounts applied to the contracted services and lead to a profitable outcome: then why avoid it?
Obviously we are focusing on NPLs, and the same applies to them.
Nowadays many competent bankers are turning into real estate experts, with a specific knowledge in the field of the civil procedure code and business consultancy; however, in spite of their efforts, they will never get the same excellent results reached by the companies that have been focusing on loan and asset management for years.
At GMA, we believe in a model where credit institutes and asset managers cooperate as business partners on the achievement of excellent quantitative and qualitative results, and professionals are enhanced thanks to their skills. The Countries of Northern Europe and the Far East have proved that the best way to manage NPLs is the combination between a careful in-house numerical analysis and an outsourcing aware of the asset management activities, also sharing the business risk of the creditor.
Some friends who have read this article have provided answers more oriented towards sociology than entrepreneurship. I give no opinion about it: after all, sociology is not our core business!