Oriental-style NPLs


La veduta esterna del padiglione Giappone a Expo Milano 2015

The last Expo edition has drawn the attention to the success of the oriental culture.

The Japan booth was the most popular one and was literally overwhelmed by the visitors; it was followed by the Korea pavilion, whose authenticity has been particularly appreciated.

Maybe the readers are asking themselves what it has to do with non-performing loans.

Well, there is a connection.

The culture of these two Countries, and generally of the oriental world, is highly relevant for the business world. It is a different approach to business and life, but this issue is too complex to be explained in a few lines without being inconsequential; this approach is not always better than the Western one in absolute terms, therefore the combination of their strengths is definitely interesting.

Only few know that one of the most successful example of the so-called “bad bank” is the Korean one, which dates back to the end of the Nineties; almost an era ago, from a financial point of view. This structure was already the state-of-the-art of the management of non-performing loans. Questa struttura rappresentava già l’avanguardia nell’amministrazione dei crediti non-performing.This structure was already the state-of-the-art of the management of non-performing loans. Through a vehicle (KAMCO), the government acquires loans from banks in difficulty and manages them efficiently through different public or private structures according to the NPL type. Incentives and tax benefits make these transactions particularly appealing. Some loans are transferred to funds, while others become vehicles of ownership for banks which promote business partnerships for the loan enhancement. Last but not least: the failed/execution debtor is encouraged to submit a plan to restructure his/her debt and assets: in case of success the same debtor is restored and may get loans again.

At GMA we strongly believe in this approach and for months we have been studying a model to be adapted to our business reality; in particular, we believe that this model is particularly valid in Italy, which is so rich in small companies and assets to be enhanced.

We may take inspiration from the Japanese culture for the concept of kintsugi, or the art of repairing something and making it even better.

For further information on the aspect that has inspired our business, see the homepage of our new website.

Emanuele Grassi