NPL and Risk Management Advisory

IFC – ASROS Cooperative Project

Russian Federation

WHY IMPROVE NPL and RISK MANAGEMENT

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• 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

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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

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• Perform diagnostic of Bank’s current capacity– NPL and Portfolio Management– Risk Management• Liquidity• Credit• Market• Operational

– Associated Assessments• SME• Corporate Governance

Project Components

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How to Become a Partner Bank

Steps• 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

Contacts• ASROS

• IFC– Natalia Ponomareva

36, Bld. 1, Bolshaya Molchanovka Str. Moscow, 121069, Russia Tel: +7 (495) 411-7555 ext. 2135 Email: NPonomareva@ifc.org

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