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  "documentTitle": "Turkish NPL Purchasing Market Overview and the way forward",
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  "authorName": "Strategy&",
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  "notes": "The slide outlines the rationale for NPL sales growth, citing government policy (Economic Reform Package) and macroeconomic scenarios (optimistic, base, conservative).",
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      "text": "Overall, in all scenarios with the incentivisation of NPL sales following the Economic Reform Package (March 2021) put forth by the government (see Exhibit 28), NPL sales are expected to increase which may, in turn, gradually decrease the NPL ratio.",
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      "text": "For banks, SME and corporate NPL sales will grow faster than retail due to the loans given with the incentivisation of the Credit Guarantee Fund after 2017 and the Economic Stability Shield during the COVID-19-induced economic downturn, resulting in the accumulation of NPL in this segment.\nThe Economic Reform Package of March 2021 (see Exhibit 28) incentivising asset quality improvement is expected to lead to a greater number of NPL sales in the banking sector and capacity enhancement in AMCs. These policies are expected to boost NPL sales upon their implementation.\nThe forbearance measures will be suspended by June 2021.\nEstimated unrealised NPL sales in 2020 due to forbearance measures will be realised between 2021-2023.",
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      "text": "In the macro-optimistic scenario, we expect relatively lower levels of NPL sales compared to our macro-base and macro-conservative scenarios. The reason behind lower NPL sales in this scenario is banks' reluctance to sell while experiencing higher recovery rates, lower NPL ratio and higher profitability.\nIn the macro-base scenario, we envisage the sales ratio to be similar to the historical average levels of NPL sales between 2010 and 2019.\nIn the macro-conservative scenario, we expect that banks and non-bank FI will sell higher volumes compared to the base scenario due to financial institutions' willingness to sell NPL when they are experiencing lower capital adequacy. Furthermore, banks may be incentivized to sell NPL in the case of regulators' addressing asset quality issues. Hence, NPL sales ratios are expected to be above the historical average of 2010-2019.",
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      "text": "Overall, in all scenarios with the incentivisation of NPL sales following the Economic Reform Package (March 2021) put forth by the government (see Exhibit 28), NPL sales are expected to increase which may, in turn, gradually decrease the NPL ratio.",
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      "kind": "paragraph",
      "text": "Main assumptions behind our scenarios are the following:",
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      "text": "We forecasted NPL sales by asset type based on historical trends. In all of our scenarios, we expect the following:",
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      "text": "28 Sales ratios were calculated by taking ratio of NPL sales volume out of prior year's NPL stock and current year's net NPL inflow",
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      "kind": "title",
      "text": "Non-performing Loan Sales Expected Growth",
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