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NPL and Risk Management Advisory IFC – ASROS Cooperative Project Russian Federation. WHY IMPROVE NPL and RISK MANAGEMENT. Avoid continued deterioration of Portfolio Implement best practice NPL resolution techniques
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NPL and Risk Management Advisory • IFC – ASROS Cooperative Project • Russian Federation
WHY IMPROVE NPL and RISK MANAGEMENT • Avoid continued deterioration of Portfolio • Implement best practice NPL resolution techniques • Implement appropriate NPL portfolio disposition strategies (sell, outsource, improve internal capacity, other options) • Access external funding sources and investors • IFIs and other sources of funds looking critically at Risk Management Systems • IFC Russia Bank Capitalization Fund currently discussed • Avoid repetition of mistakes and future crisis • Using risk Indicators rather than only market forces to ensure portfolio quality • Conform to new Central Bank standards • Improve profitability through better decision making • Assess and manage Risk – Return dynamics • Attract new clients • Improved reputation and image
Working with a Bank to Improve Risk Management Diagnostic Discussions of priority interventions Implementation • Post evaluation • Apply through ASROS • 4 - 8 weeks for completion • Varying cost structure to client • Mix of in-house IFC staff and consultants • Focus on NPL resolution/disposition and Risk Management – can widen scope as needed • Stress testing, on-site review • Report consists of current state and recommendations for implementing best practice. • 1- 12 months for implementation • Cost share 50% Bank/50% IFC • IFC or external consultant implementation – Bank decision. • Modular delivery, Bank chooses priority
Diagnostic Stage • Perform diagnostic of Bank’s current capacity • NPL and Portfolio Management • Risk Management • Liquidity • Credit • Market • Operational • Associated Assessments • SME • Corporate Governance
How to Become a Partner Bank Steps Contacts ASROS IFC Natalia Ponomareva36, Bld. 1, Bolshaya Molchanovka Str. Moscow, 121069, Russia Tel: +7 (495) 411-7555 ext. 2135 Email: NPonomareva@ifc.org • Submit application to ASROS • Contract signed with IFC/Consultant • Bank completes background questionnaire • IFC/ Consultant conducts interviews with bank staff • Delivery of Diagnostic to Bank • Agreement on next steps