COMPASS for Banking: Special Assets Module

The Axis COMPASS™ for Banking helps banks address one of the keys to their long-term survival – the timely resolution of their problem loans and OREO or "Special Assets." This is the single most important issue encountered by many banks today and how banks approach this resolution will likely determine their survival in the coming years. Without a way to systematically identify and resolve their Special Assets, many banks will have little chance of achieving a turn-around and surviving these difficult times.

FOCUSING ON YOUR SPECIAL ASSETS CLEARLY IS THE KEY; however, as banking regulators are quick to point out, consistently assessing and monitoring your entire portfolio is crucial to managing it successfully. As those who are fighting this battle today will point out, problems continue to surface within those loans graded "Pass" and understanding your entire portfolio is crucial to success.

The responsibility to successfully manage the Special Assets issue lies with the bank's senior management. Too often, however, senior management does not have the adequate tools or processes to measure and monitor the Special Assets portfolio in a timely and efficient manner. This leads to one or more of the following problems: Improperly classified loans Optimistic assumptions about losses Incomplete documentation and stale appraisals Moving too slowly on foreclosures and resolutions

The COMPASS for Banking can help senior management stay on top of their bank's Special Assets by helping to: Measure, monitor, and accurately report on the Special Assets portfolio Accurately classify loans Keep track of relevant documentation Keep track of charge-offs, exceptions, etc.