At the end of last year, a panel titled “The Future of the Non-Performing Loans (NPLs) Market in Southeast Europe” was held as part of the SEE NPL + Finance Forum. Leading experts discussed current trends, regulatory challenges, and future opportunities in NPL management within the region. The panel provided significant insights into the further development of the NPL market and highlighted the importance of collaboration, innovation, and regulation.

The panel was moderated by Predrag Miladinović, Managing Partner at VP Law Firm and Vice President of the Association of Debt Collection Companies of Serbia (AKUPS). The panelists included Petar Mrkonjić, Managing Director of EOS Matrix in Bosnia and Herzegovina; Janja Bubaš, Head of Portfolio Acquisition and Risk Control at EOS Matrix in Croatia; Jelisaveta Janić, Partner and Attorney-at-Law, as well as Head of the Banking & Finance Department at VP Law Firm; and Matija Arapović, Founder and President of the Association of Debt Collection Agencies of Croatia (HUAN).

The discussion revealed that NPL rates in the region remain stable, with no significant increase even in higher-risk markets. Historical NPLs have largely been resolved, and the accumulation of new delinquent claims is not anticipated. A slight increase in cash loans and default rates has been observed in certain segments, but the overall impact is negligible.

European regulations have significantly contributed to strengthening trust between banks and debt management companies, accelerating cooperation. Although these regulations have increased operational costs, such costs have not been passed on to debtors. Future trends point to the earlier outsourcing of debt collection and the sale of portfolios through forward flow models.

Debt management companies are increasingly assuming roles akin to private investment funds, particularly in banking markets, through loan restructuring and bridge financing. In more developed markets with alternative financial options, this trend is less pronounced.

The panelists emphasized the potential of portfolio tokenization and securitization, though their implementation depends on further regulatory and operational preparations. The alignment of national laws with the EU NPL Directive is already laying the groundwork for standardization and adaptation, while unregulated markets are striving to adopt best practices.

Financial institutions and debt management companies have utilized the period of reduced activity to enhance operational and regulatory capacities, preparing for new challenges and opportunities in NPL management.

This panel once again underscored the importance of synergy among all market participants in addressing NPL challenges and shaping future opportunities for sustainable regional development.