ABC was invited by one of our Greek client (buyer of the portfolio), to evaluate a bank’s delinquent retail portfolio, ready to be sold. Not only did ABC review the quality of the portfolio, but also provided the buyer with cash-collected predictions, resulting in price negotiation frame (including transaction costs, settlement costs, provisions, cash collected etc.)
Our Actions
ABC reviewed the portfolio, looking at loan characteristics, collection actions already performed (including the collections processes of the bank), portfolio behavior and trends, legal obstacles etc.
Dividing the portfolio into several specific segments, enabled us to create segment-specific models, that in total, predicted cash collected for the following 2 years.
Based on the predicted cash collected, defined transaction costs, settlement costs etc., the price negotiation framework for the parties was defined, including the transaction parties’ framework (bank, SPV, servicer, etc.).
Project Results
The efforts in the project resulted in the following outcomes:
- Price negotiation framework (including expected cash collected, remaining provisions, spontaneous inflow, settlement and transaction costs, etc.)
- Defined potential costs and profit for the buyer
- Transaction parties’ framework (roles and responsibilities of bank as seller, buyer’s SPV and portfolio’s servicer)
- Evaluation of the legal environment (collection actions for the negotiated transaction)