Emanuele Fabris: 10 essential elements of successful sme/corporate collections

Embed Size (px)


• A brief presentation about UniCredit Credit Management Bank S.p.A. • Pillars of our business model • 10 essential elements of successful SME/Corporate collections

Text of Emanuele Fabris: 10 essential elements of successful sme/corporate collections

  • 1. COLLECTIONS EUROPE 2013 Business Development Unit UniCredit Credit Management Bank Public

2. 2 About us Organization IT Platform and management system Our service model to support Companies (management of unpaid collection orders, trade receivables recovery, receivables transfer, receivables assessment) 10 essential elements of successful SME/Corporate collections References Summary UniCredit Credit Management Bank Public 3. 3 About us UniCredit Credit Management Bank S.p.A. is the UniCredit group's company specialized in problem loan management: we are leaders in the domestic market and we are the only European servicer that has been assigned the highest Standard & Poors and Fitch Ratings. Since 2001 we have expanded operations to cover problem loans and receivables for customers outside the Group. We're on the market. Our "non-captive" clients include other Italian and foreign banks, insurance companies, utility companies, securitization vehicles, leasing companies and financial institutions, courts, as well as commercial, industrial and service firms. Our approach to credit management is based on highly efficient and specialized processes aimed at ensuring maximum recovery rates at the lowest management cost: we operate through a highly flexible structure. Our activity covers several areas related to past-due and non-performing loans and receivables: NPL management, transfer of non-performing loans, purchase of past-due receivables from the public authorities, servicing and corporate service provider in securitization transactions, process consulting. Through our subsidiaries we also offer the Group and the Market specific products for the restructuring of mortgage loans of individuals and households (UCCMI), as well as mediation and conciliation services (EIM). In addition to our status as a Bank, we differentiate ourselves from traditional operators in our pursuit, where possible, of out-of-court settlements, our focus on Debtors' actual repayment ability, our adoption of rigorous quantitative credit assessment and financial performance measurement systems, and our attention to customer relationships. UniCredit Credit Management Bank Public 4. 4 Organization Our corporate structure is organized by type of business. Bank loans/specialized receivables: for these two divisions there are corresponding organizational Functions and Units in place, focused on individual types of loans/receivables. Our external Networks (Lawyers and Professionals) are also organized according to this specialized and focused approach. Our Personnel work in specialist teams organized by type of loan/receivable and customer: as a result, there are "dedicated teams" based on the nature, type and size of managed loans/receivables. Our Teams are strongly motivated and oriented to goals shared with our Clients: there are incentive schemes in place for our asset managers. The external Network's remuneration (External Professionals, Negotiators/Collectors) is linked to the achievement of targets (strengthened by specific "contests"). Our operating processes are characterized by a proactive approach to loan/receivable management, based on a specific assessment of expected recovery. We prioritize our asset managers' activities and systematically select recovery strategies, with the support of an advanced IT management system fed by updated databases that enables quantitative assessment of the realizable value of loans/receivables. We have dedicated units and highly qualified staff to oversee every aspect of credit management: loan transfer, asset transfer for troubled firms, servicing, corporate service provider, auction advertising, consulting and coaching on specific processes, special purpose joint ventures. We also provide conciliation and mediation services, as well as services for the restructuring of corporate and retail mortgage loans through two dedicated wholly owned subsidiaries. UniCredit Credit Management Bank Public 5. 5 IT Platform and management system The Bank has designed and implemented a dedicated application system, fully and continuously operating and accessible by both the internal and external organization. The web based application system is accessible through the Internet. Documents are electronically managed, resulting in low paper use in ordinary document management: all files are digital and can be accessed by our employees, as well as by customers and the external network of lawyers and professionals. Our Management System provides totally paperless management of information and documentation. The Bank's Management System, in addition to ensuring optimal management effectiveness, gives clients the opportunity to monitor the management results for the overall portfolio under management or of the individual loan or receivable. UniCredit Credit Management Bank Public 6. 6 CONTRACT DEFINITION START OF MANAGEMENT ACTIVITIES OPERATING MANAGEMENT DEFINITION POSSIBLE "TEST" ON A PRELIMINARY REPRESENTATIVE PTF OF THE FIRM A) DEFINITION OF CONTRACT OPERATING CONDITIONS (information flows, operating processes and schedule, delegated powers, reporting methods). B) SHARING OF TRANSMISSION, MANAGEMENT AND MONITORING PROCESSES. C) SIGNING OF CONTRACT. A) INITIAL CONTACTS BETWEEN UCCMB AND CLIENT (contacts by Account manager) B) ALLOCATION OF ACCESS CREDENTIALS FOR THE UCCMB MANAGEMENT SYSTEM (with associated user training). C) UCCMB ASSUMPTION OF POSITIONS (transmission of information flow containing data and any documents necessary to carry out the service). A) ASSIGNMENT OF TRANSFERRED POSITION TO INTERNAL UCCMB MANAGERS (geographical distribution). B) LETTER BY UCCMB TO DEBTOR (engagement, with contact references for settling the position). C) ACTIVATION OF OUT-OF-COURT PROCEDURES (letters, phone collection, home collection). Our "service model" to support firms: PRE-MATURITIES AND TRADE RECEIVABLES MANAGEMENT UniCredit Credit Management Bank Public 7. 7 ITRECORDSCHECK PROCESSANALYSIS DOCUMENT ANALYSIS Client portfolio to be managed Check of contractual updates Inclusion in the contract and invoice for UCM activity (flows) Analysis of supply contract and FAQ / outcome of complaint handling Opening of UCMB c/a Finalization of process analysis to prepare contractual offer in terms of workflow and service Definition of contract technical terms Notification of c/a to clients Transmission of detailed electronic record IT record for cash collection Check of billing process and fee management Formal appointment and c/a openingCONTRACT UPDATING WHO WHAT PRELIMINARY STEPS MANDATE DEFINITION Client / Principal Our "service model" to support firms: PRE-MATURITIES AND TRADE RECEIVABLES MANAGEMENT UniCredit Credit Management Bank Public 8. 8 PRE-MATURITY MANAGEMENT WHERE APPLICABLE SETTLEMENT OF EXPOSURES POST-MATURITY MANAGEMENT POSSIBLE EX-POST "TEST" ON A PRELIMINARY REPRESENTATIVE PTF OF THE FIRM UCCMB ASSUMPTION OF CREDITOR'S GLOBAL POSITIONS (turnover). TELEPHONE "REMINDER" TO CLIENT (no. of days before maturity) by: - pre-recorded telephone call; - operator telephone call; - SMS. A) OUT-OF-COURT MANAGEMENT - Written reminders (also on the letterhead of the client) within agreed timing; - Letter of formal notice; - Phone collection (within agreed timing); - Home collection (where applicable) B) JUDICIAL COLLECTION (with client's consent). A) CLOSING OF POSITIONS BY: - Full out-of-court recovery; - Full and final settlement; - Judicial recovery; - Impossible/financially non-viable recovery B) SALE OF RECEIVABLE (WHERE APPLICABLE). Our "service model" to support firms: PRE-MATURITIES AND TRADE RECEIVABLES MANAGEMENT UniCredit Credit Management Bank Public 9. 9 DATATRANSMISSION COLLECTION MANAGEMENT DOCUMENT ANALYSIS NOTIFICATIONSOF NON-RECOVERABLE LOANS MANAGEMENT UNPAIDBILLS Billing Transmission of detailed electronic record Receipt of electronic record/ activity scheduling 5 days before invoice expiration - pre-reminder At expiration collection receipt and reconciliation When informed of unpaid bill, client contact and reminder Assignment of files Analysis of individual files (stocks) Verification on the basis of available information of Italian companies under insolvency proceedings ceased, inactive or under liquidation Positions to be placed under management for recovery Notification of non-recoverable receivables End of notification service of non- recoverable receivables End of recovery service Management mandate - out-of-court activity Management mandate - judicial recovery Positions closed through collection or write-off Returned positions due to non- financially viable recovery WHO WHAT PRE AND POST MATURITY MANAGEMENT SETTLEMENT OF POSITIONS Client / Principal Our "service model" to support firms: PRE-MATURITIES AND TRADE RECEIVABLES MANAGEMENT UniCredit Credit Management Bank Public 10. 10 10 essential elements of successful SME/Corporate collections 1. Focusing on actual recoverable value based on real Debtors repayment capability. 2. Adoption of strict quantitative logics to assess the expected recovery. 3. Systematic prioritisation of management activity focusing on positions with major recovery potential. 4. Definition of different recovery strategies according to the Client needs. 5. Calculation of the present value of judicial settlement and valuation of the price of the possible loans sale (receipt price). 6. Local Real Estate market values assessment. 7. Prompt recovery actions. 8. Management strategy focused on Out-of-court settlement. 9. Selection of internal managers and external consultants and lawyers according to the following assignment criteria of loans: Private and Corporate loans segmentation; Sectors: banking loans, Corporate loans, leasing, Bankruptcy loans; Geographical distribution of loans; Loans amount and aging. 10. Incentive plans for internal Managers, evaluation of Lawyers activity and fe