When a strategy needs strong execution

A private investment fund acquired a European bank just after the bank emerged from a long period of distress. The new owners had an ambitious transformation agenda: they hoped to restructure the bank’s finances and point it in a new strategic direction as a leader in the market for nonperforming loan (NPL) workouts. After a year, the owners completed the restructuring, but they needed help in designing and implementing the new business strategy.

Stronger systems and processes turn the company into a leader

AlixPartners partnered with the investment fund to develop and roll out a transformation strategy. Our three-part plan involved improving processes for monitoring and managing the bank’s NPL portfolio, building a lean and flexible organizational design, and developing powerful data systems that would help maximize loan recoveries.

We defined and helped implement automated processes and tools that would make the bank’s portfolio management more effective and more efficient. We also proposed a new organizational design that would enable the bank to quickly deploy resources where needed while keeping head count under control. The most-complex part of our assignment involved designing and implementing a new system for data and analytics. We developed a custom database that incorporates the bank’s own histories of credit collection and workout as well as external market and economic data. That information fed into analytics that helped credit officers evaluate credit portfolios quickly and accurately. And they could also predict repayment timelines and amounts recovered—two key elements of the firm’s strategy.

When it really matters

A bank whose survival was in doubt not long ago has become a regional leader in the NPL workout market. Credit officers can now perform their initial NPL portfolio evaluations in a couple of hours—a process that once took one to two weeks. The bank’s flexible organizational design makes it easier for employees to work collaboratively in order to maximize loan recoveries. Standardized reporting into and by the workout unit keeps senior managers informed of changes in the business and the marketplace, which enables them to fine-tune their strategy and tactics in real time. Crucially, the unified database we created has significantly accelerated the bank’s recoveries and increased their value—the keys to gaining market share and, ultimately, becoming a leader.