Write-offs Analysis - Collections Area

Written by Michael McAlary

Services Area: Performance Improvement

Industry Sector: Financial Services - Retail Banking


Our Client had identified increasing arrears and defaults across two keys asset classes; e.g. cards and personal loans.
Chairmont's responsibility was to analyse a sample of unsecured loans that had been written-off to determine if the “Collection – Loss Realisation” Policy of the Bank had been applied by the Collection Staff.

The review of the files included:

  • An analysis of the socio-economic factors, e.g. income levels, employment types of the borrowers, the loan size and amounts written-off.
  • An assessment of the Collections staff efforts to recover the monies and of the reasons for which the accounts had finally been written-off.


The key challenges were to:

  • “Navigate” through the wide variety of potential reasons for the increase in early write-offs, including the economic cycle, transitioning from in-house to outsourced collections and changes in the interpretation of the Credit Collection policies.
  • Manage the high level of “politics” as there was an “internal battle” as to the reasons for the problems, etc. between the different departments.


Identified that the increase in early write-offs was due to a combination of several factors, including reasons not suspected by the institution.
The key recommendations were implemented.