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A non-performing loan (NPL) is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as they reduce profitability. [ 1 ]
In finance, the infection ratio describes the relationship between non-performing portfolios and the total loan portfolio. The infection ratio is used to work out the relationship between the non-performing part of the portfolio (i.e., loans not efficiently being recovered) and the total loan portfolio of a bank or other financial entity. [1]
The Texas ratio is a metric used to assess the extent of a bank's credit problems.. Developed by Gerard Cassidy and others at RBC Capital Markets, it is calculated by dividing the value of the lender's non-performing assets (NPL + Real Estate Owned) by the sum of its tangible common equity capital and loan loss reserves.
Starting loan balance. Monthly payment. Paid toward principal. Paid toward interest. New loan balance. Month 1. $20,000. $387. $287. $100. $19,713. Month 2. $19,713. $387
Loan quality and asset quality are two terms with basically the same meaning. Government bonds and T-bills are considered as good quality loans whereas junk bonds, corporate credits to low credit score firms etc. are bad quality loans. A bad quality loan has a higher probability of becoming a non-performing loan with no return.
Unpaid principal balance (UPB) is the portion of a loan (e.g. a mortgage loan) at a certain point in time that has not yet been remitted to the lender. [1]For a typical consumer loan such as a home mortgage or automobile loan, the original unpaid principal balance is the amount borrowed, and therefore the amount the borrower owes the lender on the origination date of the loan.
The challenge is the large number of non-performing loans in a wide variety of situations with regards to geographical location, type of industry, size and type of problem. If the bad bank does not quickly get control of the loans, a lot of value is lost and the capital requirements of the bad bank can change dramatically.
Community Bank of Bergen County, NJ Reports Sale of Non-Performing Loan Portfolio MAYWOOD, N.J.--(BUSINESS WIRE)-- Community Bank of Bergen County, NJ announced today the sale of $3.2 million of ...
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