Sale of the bank's non-performing loans to the asset managment companies and impact on banking sector capital structure

In this study we examined the structure and treatment of asset management companies (AMC) which actively used in the liquidation of loans and the effects on the banking system. The effects of sale tenders that made by banks to asset management companies is examined by analysing daily impact of stock prices of the bank. 68 units of NPL sales between 2010-2015 and datas obtained from stock prices on that date is evaluated by applying VAR model. According to the evaluation results; out of 68 tenders 22 positive, 22 negative and 24 inconclusive stock returns are found. Accordingly, it is clear that there is an impact on the price of shares of the tender results. It is seen that generally smaller cap banks got more positive feedback, for biggest cap banks profitability of stock effects are positive for some sales but negative for the others. Results indicate that particular deals are overpriced resulting in stock price increases and some are underpriced resulting in losses in the market. It can be inferred that information regarding with the structure and asset quality of deals are accessible.The recent sales datas show that there is competition between banks and asset management companies for pricing non performing loans. While competition between asset management companies upgrades sale price offers, in case of highly risky deals, apathy of asset management companies to tenders brings selling pressure to bank stock. Key Words : Non-Performing Loans, Asset Management Company