29. Institutions should fully understand and assess: a) The magnitude and drivers of their NPEs: i. …

Institutions should fully understand and assess:

a) The magnitude and drivers of their NPEs:
i. the size and evolution of NPE portfolios at an appropriate level of granularity, which requires an appropriate grouping of the exposures, as outlined in section 5.2.3;
ii. the drivers of NPE inflows and outflows, by portfolio where relevant;
iii. other potential correlations and causations.
b) The outcomes of NPE actions taken by the credit institution in the past:
i. the types and nature of actions implemented, including forbearance activities;
ii. the effectiveness of those activities and related drivers.
c) Their operational capacities (processes, tools, data quality, IT/automation, staff/expertise, decision-making, internal policies and any other relevant area for the implementation of the strategy) in relation to the various steps involved in the process, including but not limited to:
i. early identification of NPEs;
ii. forbearance activities;
iii. impairments and write-offs;
iv. collateral valuations;
v. recovery, legal process and foreclosure;
vi. management of foreclosed assets, where relevant;
vii. reporting and monitoring of NPEs and of the effectiveness of NPE workout solutions.

1. Forbhreathnú

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