5.4 Monitoring of NPEs and NPE workout activities

The monitoring systems should be based on the NPE targets approved in the NPE strategy and related operational plan, which are subsequently cascaded down to the operational targets of the NPE WUs, with feedback loops to pricing of credit risk and provisioning. A related framework of NPE-related key performance indicators (KPIs) should be developed to allow the management body and other relevant managers to measure progress.

Credit institutions should define and monitor NPE-related KPIs. The NPE-related KPIs, should include, but not necessarily be limited to (see also Annex 2):

• a) NPE metrics;
• b) borrower engagement and cash collection;
• c) forbearance activities;
• d) liquidation activities;
• e) other (e.g. NPE-related profit and loss items, foreclosed assets, outsourcing activities).

5.4.1 NPE metrics

5.4.2 Borrower engagement and cash collection

5.4.3 Forbearance activities

5.4.4 Liquidation activities

5.4.5 Other monitoring items