Valuation, modelling, and monitoring of non-core and problem assets
In banking operations, the strategy for managing non-core and other problem assets plays a critical role. This is driven by regulatory requirements under Central Bank of Russia Regulation No. 611-P dated 23 October 2017, which mandates the creation of provisions for potential losses related to non-core activities of credit institutions. The provision requirements depend on how long such assets have been held on the bank’s balance sheet. Provisions can only be discontinued if the non-core asset is sold on the market.
FBK renders a wide range of services for managing non-core and problem assets.
Depending on the goals set by shareholders for the bank’s top management, FBK experts offer the following services:
- comprehensive analysis of the bank’s asset portfolio to assess its actual efficiency and alignment with the bank’s development strategy and (or) long-term growth plan;
- identification of non-core and potential problem assets;
- evaluation of the effectiveness of retaining (managing) non-core and problem assets.
Depending on the specific scope of the consultant’s engagement, deliverables may include (but are not limited to):
- independent plan-actual analysis of the bank’s asset portfolio for compliance with predefined metrics;
- recommendations to improve the efficiency of managing non-core asset portfolios;
- list of non-core assets with an assessment of their impact on the bank’s capital and financial performance, including an evaluation of reserve adequacy;
- formation of a potential problem asset portfolio based on independent analysis of borrowers’ financial position, loan repayment prospects, and indicative collateral impairment assessments;
- indicative fair value analysis or independent market valuation of non-core assets;
- better resilience to external shocks and market fluctuations, ensuring organisational stability;
- efficiency in time and financial management by proactively addressing future risks.
Our advantages
Solid Reputation
FBK consistently takes top positions in RAEX largest industry ranking and other professional rankings.
Expert Team
A team of certified auditors and consultants with experience in auditing and advising major Russian credit institutions and financial organisations, including expertise in identifying non-core and potential problem assets.
Individual Approach
FBK develops personalised solutions tailored to each institution’s size, operational specifics, organisational structure, and risk and capital management strategies.
