London has just hosted the Global NPL Conference, a key event in the international real estate sector organized by SmithNovak and attended by more than 450 delegates, over 200 companies and 50 sponsors from up to 27 countries. The current state of the NPL market and how Artificial Intelligence (AI) and big data are revolutionizing the modus operandi in terms of investment were some of the topics that were addressed.
The participation included professionals linked to the real estate sector of all types: 18% from the investment world, another 18% from the banking world, 21% from the servicer field, 16% from the consulting sector, 8% from the technological universe, 11% from legal firms, 4% from credit bureaus and 5% from other fields.
France stands out from other countries as a developing market. “The wave is coming,” Nicolas Pellen, Pan-European NPL Specialist predicts. The signals and the increased pressure on French banks are already a palpable reality and are moving the pieces of the puzzle. In this context, managers are shifting to the asset management mentality, investor appetite is growing and advisors are here to help.
The stock of non-performing loans remains stable at €110 billion, while the EU stock is declining (-5.5%) since the beginning of the year. In addition, the NPL ratio increased to 1.9% during the last quarter.
For its part, Stage’s stock soars to €615 billion, up 15% since December 21 and double the figure since December 19.
French banks’ profitability is below the EU average (#RoE or #RoA at 6.16% and 0.37% respectively), while opex remains above the European average (#CtI 69%). Meanwhile, they have better capacity to absorb losses in capital or P&L than their peers (#CET1 and coverage ratio of 15.2% and 48.6% respectively), says Nicolas Pellen, pan-European NPL specialist.
AI and Big Data in the real estate sector
The cast of industry professionals who attended the event discussed how new technologies can be an ally in terms of investment. If the use of big data technology benefits us, having all this information structured is even better. Hence, this is a reason that new technologies are worth investing in. In addition, historical data cannot be recreated and erring on the side of measurement or failing to do so can be useful in the future.
Applying AI in real estate? Panelists reminded us that “in the search for use cases for AI, nothing has really changed”. They refer to the approach: the business problem has to be what drives the technology and not the other way around, it should not be the case that an advanced technology promotes a business problem.
What were the reflections of the event?
The event was attended by leading voices in Real Estate on a global scale. The summit served to shed light on the hottest issues in the NPL market and to delve into the main challenges facing the sector today. In the words of Chris Warburton, Director – ROStrategy, RO-AR.com, RO-AR, “a great event overall that I definitely took away some good ideas from.”
“It was great to get a holistic view of the NPL market, from underwriting to collections to asset sales, from the many countries and markets presented at the event,” explains Tom Miller, Head of Business Development, Credit Solutions at Tietoevry Banking.
Stephan Plagemann, CFO of Mount Street Group, congratulates Smith Novak “for organizing this high-level event and bringing together all the relevant players to discuss the current state and outlook of the market”.
Alexandros Efstratoglou, Relational’s Business Development Director, concurs with his perspective: “SmithNovak has once again organized a conference of the highest standard. It is always a great opportunity to meet with most of the key players in the market. Having participated in the technology panel, it was an excellent opportunity to share our views and provide input on the future of technology trends in the industry.”
There are also those who highlight the international perspective of the event: “SmithNovak’s Global NPL was certainly the most multinational industry event I have ever attended. It was also a great opportunity to get back to networking in person!” explains Carlos Catraio, founding partner and CEO of Brasil Distressed.
Marco Iannò, Partner at Legance Avvocati Associati, also participated in the conference: “The event was very well organized and featured top-level speakers on each panel. I was honored to participate in the Italian panel, which was very well received. As a result of the open and interesting discussion, I gained many new business connections.”
What about Spain? According to Carlos Rubí, Co-Head Portfolio Solutions Group EMA. Partner at KPMG: “The portfolio sales market in Spain has behaved very dynamically in the first half of the year, and although we do not expect a significant increase in delinquencies by the end of the year, the Spanish market will continue to be one of the most active in Europe.”
Source: Press release