Financial recovery departments for SMEs reviewed

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The Netherlands Authority for the Financial Markets (AFM) has reviewed the treatment of SME clients by financial recovery departments of Dutch banks. ABN AMRO was one of the banks under review.

Clear communication essential

The outcome of the AFM’s review led it to make several recommendations to banks regarding their communications with clients. At ABN AMRO, we devote a great deal of attention to communication throughout our entire financial restructuring & recovery process. Over the past years, we have taken several initiatives to ensure that our communications are clear, timely and appropriate. Daphne de Kluis, General Director of FR&R, the financial recovery department of ABN AMRO: ‘The financial restructuring and recovery process is very intensive and often turbulent for our clients. We agree with the AFM that good communication is essential. We will use the AFM’s recommendations to improve our communications where necessary.’

Brochures, training programmes and selection policy

Over the past years, all of our formal communications have been tested and rewritten in plain language where necessary. We also frequently offer negotiation and communications courses for all colleagues, while social skills are an important criterion in our selection procedure when recruiting new staff.

Prudent processes

AFM concluded in its report that financial recovery departments adhere to prudent business processes. The report states that the AFM did not find that banks tend to easily refer loans to their financial recovery departments, discontinue relationships with debtors, or take measures aimed at effecting bankruptcy. In the files reviewed by the AFM, it did not find any unreasonable measures such as disproportionate risk surcharges. It did not find any indication of a pattern of banks harming clients or adopting an earning model based on financial recovery departments taking measures against clients.

Daphne de Kluis: ‘This goes to the heart of our work. We are happy that our clients can now read in an AFM report that financial recovery departments work with sound core processes. Their conclusions are also a boost to our staff. Lately, there have been a lot of issues concerning financial restructuring and recovery. Our staff work long days to come to the best solutions possible for clients and they feel highly committed to our clients.’

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