CM-1.6.4
While expectations about changes in macroeconomic conditions can play a role in determining target levels (if based on reliable external forecasts), they should not be the sole driver for the established NPL reduction targets. Targets should be established at least along the following dimensions:
(a) By time horizons, i.e. short-term (indicative 1 year), medium-term (indicative 3 years) and possibly long-term;
(b) By main portfolios (e.g. retail mortgage, retail consumer, retail small businesses and professionals, SMEs, large corporates and commercial real estate);
(c) By implementation option chosen to drive the projected reduction, e.g. cash recoveries from hold strategy, collateral repossessions, recoveries from legal proceedings, revenues from sale of NPLs or write-offs.
Added: June 2022