Kiev, Ukraine, December 10, 2012—IFC,
a member of the World Bank Group, today launched a toolkit on non-performing
loans and distressed assets to help improve banks’ capacity for managing
their troubled assets, supporting improved access to finance for companies
in Eastern Europe and Central Asia and contributing to economic recovery.
Following the 2008 global financial crisis and continued turbulence in
the eurozone, IFC together with other international financial institutions
is helping emerging markets in Europe and Central Asia rekindle growth
by supporting private and public sector initiatives, including infrastructure,
corporate investment and the financial sector.
The Distressed Asset Transfer Toolkit is a practical guide for financial
institutions and potential investors on how to choose the most effective
option for disposing troubled assets. It provides critical information
on tax and legal implications, and case studies on working with distressed
assets in Kazakhstan, Russia, and Ukraine. It also provides support to
banks on how to maximize distressed asset portfolio value.
“Banks and investors across the region view the disposition of troubled
assets unfavorably due to the lack of viable platforms and a transparent
process for sales and valuations,” said Garth Bedford, Manager for IFC’s
Financial Market Crisis Response Program in Europe and Central Asia. “We
work to develop an enabling environment and promote best practices. Helping
banks to clean non-performing loans from their portfolios is crucial for
companies and individuals to have access to the finance they need.”
Non-performing loans have a dual effect on financial institutions, as there
is no income from problematic loans and the capacity of further lending
is reduced due to provisioning against them.
IFC launched the Financial Market Crisis Response program in 2009 in partnership
with the Development Bank of Austria (OeEB), the
Swiss Confederation, Ministry
of Foreign Affairs of Finland,
Netherlands’ Agency for International Business and Cooperation.
The program is supporting the financial institutions of Europe and Central
Asia in their recovery from the global economic crisis by helping them
improve risk management, and also helping to develop a market for distressed
The program has so far trained 2,550 bankers from 451 financial institutions
across Europe and Central Asia, helped enact five amendments to national
legislation, and provided in-depth advisory support to 41 banks.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. We help developing
countries achieve sustainable growth by financing investment, mobilizing
capital in international financial markets, and providing advisory services
to businesses and governments. In FY12, our investments reached an all-time
high of more than $20 billion, leveraging the power of the private sector
to create jobs, spark innovation, and tackle the world’s most pressing
development challenges. For more information, visit www.ifc.org.