Belgrade, September 21, 2022—A new regional platform will help financial institutions resolve their non-performing loans (NPLs) in Bosnia and Herzegovina, Croatia, Romania, and Serbia, freeing up capital for new lending and allowing households and businesses to restore their creditworthiness, which has become critical as countries continue to face pressures to recover from the COVID-19 pandemic.
Co-funded by IFC and EOS Holding GmbH (EOS), the EUR 129-million platform—DARP NPL EOS II—is part of IFC's Distressed Asset Recovery Program (DARP), which focuses on the acquisition and resolution of distressed assets across emerging markets. The new platform will acquire and resolve non-performing portfolios of secured retail loans, small and medium enterprises (SME) and corporate loans, and real estate owned assets (REOs) held by financial institutions in the target countries.
"With this cooperation, we are strengthening our business in Eastern Europe while intensifying our activities as a sustainable financial investor in the NPL market," said Carsten Tidow, member of the EOS Group's Board of Directors responsible for Eastern Europe. "We are particularly focused on the environmental, social, and governance factors in the selection and processing of NPLs. As a subsidiary of the Otto Group, sustainable economic activity is at the heart of our work."
Moving forward, offloading NPLs and REOs in the target countries will help free up capital, increasing liquidity and reducing the substantial costs associated with managing these assets. Moreover, IFC will help EOS adopt environmental and social (E&S) standards and incorporate them in their NPL resolution practices, in line with IFC's Performance Standards.
"By supporting distressed assets markets in our target countries, we aim to help financial institutions return swiftly to their core lending business and avert a prolonged credit crunch," said Vittorio Di Bello, IFC's Regional Head of Industry for Financial Institutions. "Our new engagement with our long-term partner EOS enables us to support such resolution in these countries and complement our global response to the COVID-19 crisis."
Since DARP was launched in 2009 to address the significant increase in NPLs following the 2008-2009 financial crisis, it has grown into a $8.4 billion global investment program. This includes commitments of $2.3 billion on IFC's account and $5.4 billion mobilized from third-party investors, making IFC a market leader in distressed assets resolution in emerging markets. IFC continues to strengthen its position by building a global network of distressed assets servicers and investors and promoting best practices in NPL resolution.
IFC and EOS's partnership dates back to 2010, when they set up a DARP facility to purchase and resolve unsecured retail NPL portfolios.
About the EOS Group
The EOS Group is a leading technology-driven investor and service provider in the receivables management industry. With over 45 years of experience, EOS offers some 20,000 customers in 25 countries (as of: fiscal year 2022/23) around the world smart services for all their receivables management needs. Its key target sectors are banking, real estate, telecommunications, utilities and e-commerce. EOS employs more than 6,000 people and is part of the Otto Group. For more information on EOS Group, please visit www.eos-solutions.com
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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