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What will happen when economic development slows because of inflation, followed by a period when all the impacts manifest themselves?

How has the recording inflation rates already influenced the banking landscape?

In times of strong inflation, banks may see a rise in operating costs similar to other businesses. Depending on how much a bank can transfer cost increases onto customers, more inflation lowers its cost-to-income ratio. If banks choose for interest rates to rise, there will likely be a permanent increase in profitability due to higher margins. However, the key question is what will happen when economic development slows because of inflation, followed by a period when all the impacts manifest themselves. There are three possible effects on banks —a slowdown in volume growth, higher costs, and more delinquencies — could be minimal or significant for banks depending on the circumstances.

How has NPL been challenging banking professionals during the past few years?

It is essential to make sure that the difficulties associated with NPL resolution are fully recognized so that tailored policies may be put in place to help banks better withstand profit losses to quickly regain their financial soundness and be able to promote economic recovery. The recovery process will benefit from the skills and knowledge in managing distressed and non-performing debt. Burdened by high NPLs, banks are reluctant to lend, so that growth takes longer to recover. While cleaning up banks’ balance sheets can support economic recovery, complementary macroeconomic policies can help to kick-start that growth.

EOS Group is also partnering with us at our 16th Annual Banking Credit Risk Management Summit on 1st – 2nd February 2023 in Hilton Vienna Danube Waterfront and will share their case study on The Best Execution Process for NPL Transactions in EU Secondary Market

The EOS Group is a leading technology-driven investor and service provider in the receivables management industry. With over 45 years of experience, EOS offers some 20,000 customers in 25 countries (as of: fiscal year 2022/23) around the world smart services for all their receivables management needs. Its key target sectors are banking, real estate, telecommunications, utilities and e-commerce. EOS employs more than 6,000 people and is part of the Otto Group.

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