The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

We have ways of making you pay

The German banks' latest ploy for repairing balance sheets bloated with non-performing loans is laughable. Siphoning off the good loans and leaving behind the non-performing ones - those that the banks really should be doing something about - can only result in balance sheets in worse shape than before.

So what's the solution? They could do worse than to follow the example of Italian financial services firm Capitalia. It has a joint venture with Archon Group, a subsidiary of Goldman Sachs, to deal with its overdue debtors. An insider says the partnership is going swimmingly.

Capitalia has assigned e6 billion of non-performing loans to the vehicle. "We divided our clients into those who need a bank and those who need a lawyer," says the source. He claims the venture is proving three times as effective at getting the money back as Capitalia's own recovery team had been. "It's an highly efficient machine and its people have the ability to be as rude as necessary," he explains.

And when that doesn't work, Archon has a few other tactics up its sleeve. Its website proudly proclaims it is "innovative and resourceful in its approach" which, reportedly, includes imparting a sense of social blame.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree