Valuation - The Impact of Liquidity on Company Value
The main component of valuation for a lending institution is its portfolio quality. There are two main reasons behind this philosophy:
A loan portfolio with a high delinquency account ratio increases portfolio provisioning for charge-off and therefore decreases Net Lending Result and Profit for the company. Additional pressure on the liquidity likely will be present.
The quality of the loan portfolio influences potential value for M&A between the lending company and acquiring companies. Every acquiring company is interested in portfolios meeting or exceeding expectations, as the potential for cross-sale generates additional ability to increase the value of the lender
Our proprietary software solution will focus our efforts on the setup of the lender's portfolio provisioning to reduce future allocations for potential default. Our collection process and effort is deployed in the most efficient areas to increase the value of the lender.