International Perspective on Debt Sales

Transcription

1 International Perspective on Debt Sales Toronto, 15 November 2011 Geir Langfeldt Olsen CEO Aktiv Kapital 15 November 2011 / SCORE presentation 1

2 Debt Sales will the dam finally burst? Basel III tighter capital requirements, cap on leverage, liquidity Amount of non-performing loans in Europe tripled from 2007 till today EUR 1.3 trillion of non-core assets and non-performing loans on European banks balance sheets 15 November 2011 / SCORE presentation 2

3 Advantages of selling debt Free up costly core capital, immediate liquidity Potentially improves rating and lowers financing costs Improve transparency of portfolio and reduce risk for future losses Focus resources on core activities Tertiary debt is a specialist game 15 November 2011 / SCORE presentation 3

4 Potential barriers that may make this process lengthy Difference in buyer/seller price expectations and loan loss provisions Time consuming process banks have limited bandwidth Government support to banks Reputational risk towards market and customers Less funding for buyers 15 November 2011 / SCORE presentation 4

5 To succeed we are following a two-pronged approach AKTIV KAPITAL PORTFOLIO INVESTOR PORTFOLIO COLLECTION World-class investment team Flexible acquisition approach - adapted to sellers needs Well funded Valuation based on deep expertize in the industry Unique, customer focused approach, long-term focus Creative concepts local adaption Constant operational improvements 15 November 2011 / SCORE presentation 5

6 Acquisition approach Portfolio investment value chain MARKET INTELLIGENCE ESTABLISH RELATIONS IDENTIFY DEALS DATA GATHERING AND DUE DILIGENCE MODELLING AND VALUATION BID CONTRACT Increase lead generation and deal flow Dynamic valuation approach to increase success ratio More differentiated IRR requirement Better reflect underlying risk Adapt to local conditions Adapt to portfolio type More flexible opex model Adapted to type of portfolio and local market conditions 15 November 2011 / SCORE presentation 6

7 Leveraging partnerships to open up growth opportunities Debt Collection Agencies Forward flows, leverage customer relationships Financial/Risk Capital players Access to larger deals Co-investments Specialist players Increased access to portfolios 15 November 2011 / SCORE presentation 7

8 Tertiary debt collection is a specialist competence...1% higher liquidations is a lot! Efficiency of contact technology, segmentation, prioritization Constant trial and error measure, measure, measure Capabilities of negotiators, understanding customer values and options Understanding of local regulations and best collection methods Long-term view to customer 15 November 2011 / SCORE presentation 8

9 Customer focused approach 15 November 2011 / SCORE presentation 9

10 Aktiv Kapital Plus Rewards Program We compete for debtors money and discretionary spending Incentive for customers to maintain monthly payments Reduced monthly payment plan default rates: % default reduction after go live Used as an uplift strategy for existing payers 1. March 2011: Moved 32% of customers paying less than $25 per month onto program by increasing payment over $25 Current Statistics 1. 2,500 customers enrolled 2. $200,000 in accumulated rewards

11 Summary Debt sale frees up costly core capital and helps financial institutions focus on core activities Current market environment and capital requirements will drive more debt to the market we are in acquisition mode Aktiv Kapital is a safe partner in this environment professional investor & customer focused collector We have a long term perspective on Canada 15 November 2011 / SCORE presentation 11

12 We are increasing in Canada 15 November 2011 / SCORE presentation 12

13 Thank you 15 November 2011 / SCORE presentation 13