One month ago Helix Ice attended the annual NPL Europe conference which was organised by Smith Novak in London. It was a great opportunity to meet other people from the industry, both investors, branch colleagues and technology experts.

We always strive to stay up to date with relevant current technology developments and the hottest trend right now is of course AI and primarily large language models (such as ChatGPT), reinforced learning (advanced machine learning), generative AI (create images etc. based on text requests) among others. I asked ChatGPT to write an article based on selected posts on LinkedIn that attendees had written based on their experiences from the conference we went to:

At a recent NPL conference, attendees discussed the state of the market in Europe and shared their thoughts on various topics related to non-performing loans (NPLs).

One of the main topics of discussion was the impact of COVID-19 on the NPL market. Attendees noted that while the pandemic had initially caused a slowdown in the market, things were starting to pick up again as economies reopened and stimulus measures helped to support businesses and households. However, there was some concern about the potential for a wave of NPLs to hit the market in the coming months as government support measures expire.

Another topic of discussion was the differences between the Nordic region and the rest of Europe in regards to the NPL market. Attendees noted that the Nordic countries tend to have lower levels of NPLs compared to other European countries, and that this is due in part to their strong economies and well-functioning financial systems. Additionally, the Nordic countries have a culture of transparency and cooperation between lenders, which has helped to mitigate the impact of NPLs on the financial system.

The role of technology in the NPL market was also discussed by attendees. Many noted that technology has the potential to streamline the NPL resolution process and make it more efficient, but that there are still challenges to be addressed, such as data privacy concerns and the need for standardization across different markets.

Finally, attendees discussed the importance of sustainability in the NPL market. Many noted that there is increasing demand from investors for sustainable investments, and that this is also true in the NPL market. Attendees highlighted the need for NPL investors to take into account the social and environmental impact of their investments, and to work towards sustainable solutions that benefit both investors and the wider community.

Overall, the NPL conference provided a forum for attendees to share their thoughts and insights on the state of the market in Europe. While there are still challenges to be addressed, such as the potential for a wave of NPLs and the need for technology and sustainability in the market, attendees expressed optimism about the future and the potential for continued growth and innovation in the NPL market.

I’d like to add a few takeaways of my own the conference.

• There was a lot of discussion about stream lining the data used in portfolio valuations, EBA is developing a data template that should be used in NPL transactions which will help buyers get necessary data. This is not as big of a concern to us in the Nordics as much as the rest of Europe as we already have a history of high data quality and information about our debtors.
• We can expect a higher degree of 2^nd hand market portfolio trades the coming year across Europe with some countries estimating 25% of all transactions being from the 2^nd hand market. In the Nordics, we do not have a long history of 2^nd hand trades but this year this will probably change and increase significantly, partly due to NPL backstop starting to have a real effect.
• Our COO Johan participated in the panel discussion for the Nordics session where there was some discussions about niche banks who might have some turbulence in the near future due to higher interest rates and the need to start selling off debt portfolios if they’re not already experienced in this regard.

Finally, I would like to express my gratitude to Smith Novak for hosting us, it was a great event!

2022-11-24

Market overview:

We continue to share knowledge regarding the Nordic NPL market and are glad to see that our insights are appreciated among both investors and sellers.

It has continued to be an interesting market to make business in as we have sellers looking for better prices than available on their NPL portfolios but at the moment the purchaser side is the one in a better position. This as a lot of Bank & Finance volumes are out on the market and the sellers don’t really get the price levels they expect or need. Perfect time to invest!

Since the last Market Overview, our summer edition, we have had several interesting dialogues with both new investors and service companies looking into the Nordic market and curious to know more about the current market conditions and potential deals to be made. We are happy to assist in such dialogues and have had success so far in the investment structures that launched.

When it comes to collection on the purchased debts in the Nordics, we noticed that both voluntary payments and legal collection have challenges due to the fact that the debtors have smaller margins as everyone else due to the increasing inflation rate. But we also see really good effects from extra activities and campaigns and on a long-term perspective we are still comfortable with the collection forecasts. 

Please feel free to contact us for more dialogues and opportunities around the Nordic NPL market.

/COO, Johan Gustafsson