Okuzeka
Finance & Banking vocabulary · Risk Management

Recovery rate

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, recovery rate means: The proportion of an exposure recovered following default, under a stated measurement basis.

In Turkish: geri kazanım oranı

How it is used

Specify the denominator, costs and discounting; gross cash recovery and economic recovery can differ.

Example sentences

  1. The recovery rate improved after the collateral was sold above the earlier estimate.

    Higher recoveries increase the share of exposure returned.

  2. The analyst deducted legal costs when estimating the recovery rate.

    Net recovery depends on costs as well as receipts.

Common collocations

  • estimated recovery rate
  • net recovery rate
  • defaultFailure to make loan or bond payments as agreed. A borrower is usually treated as in default after missing payments for a set period, often 90 days.
  • collateralAn asset, such as property, cash or securities, that a borrower pledges to a lender and that the lender can sell if the loan is not repaid.

More terms: Risk Management

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This page explains English vocabulary for learners. It is not financial advice.