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Credit Activity and Risk Trends of Home Loan Industry NHB Conference Arun Thukral Satish Pillai Manish Jain Satrajit Saha 21 st April 2012
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 2 About CIBIL CIBIL is Established CIBIL is the leading CIC in India 2004 20052009 2007 First and only credit bureau 4 million consumer records Commercial Database 0.6 million commercial records Consumer Portfolio review reports Advanced Analytical tools CIBIL TransUnion Score Personal Loan Score Bureau Credit Characteristics CIBIL Custom Solutions Accelerates solution offerings First central repository on Fraud and Mortgage Direct Consumer Access CIBIL Detect CIBIL Mortgage Check CIBIL Watchlist CIBIL provides world class solutions and has become the risk management partner for all lending institutions in India
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 3 Shareholders of CIBIL
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 4 CIBIL strengthened its membership to 766 members Including 312 NBFCs, 266 Cooperative Banks & 32 Rural Banks Expanding CIBIL Membership
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 5 Vast database of nearly 212 million records Strong database of over 10.2 million records Database Snapshot
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 6 Repository Size: 90 Lakh Records Contributors: Leading Private Banks, Public Banks, Housing Finance Companies, Foreign Banks, NBFCs Coverage: Pan India – Covering more than 450 cities Property Type: Flats, Independent Houses, Plot, Office Customer Segment – Individual & Commercial Mortgage Check
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 7 How has the credit enquiry mix changed over time? How have the enquiries & acquisitions for Home Loans changed over time? Which regions have driven this change? How has the Home Loan Acquisition quality changed over time? How did the Home Loans perform? What type of loans do customers take after taking a Home Loan? Understanding the changing landscape of Home Loans
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 8 How has the enquiry mix changed in last 3 years? INQUIRIES OVER TIME Decrease in Contribution of Home Loan Inquiries Unsecured Loan Inquiries down to 41% from 60% in Q1 2009
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 9 Let’s look at the home loan enquiries Home Loan Inquiries have been increasing since Q1-2009 Home Loan Inquiries at All Time High, Stable in recent 2 Quarters
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 10 Lets look at the Geographical View Home Loan Enquiries - 2009 Legend Ranges (Inquiries Done) Color Very LowRed LowOrangeRed MediumOrange HighYellow 2.12 MM
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 11 Home loan enquiries Geographical view - 2010 Legend Ranges (Inquiries Done) Color Very LowRed LowOrangeRed MediumOrange HighYellow REGIONS SHOWING HIGH CREDIT NEED 2.96 MM
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 12 Home loan enquiries Geographical view - 2011 Legend Ranges (Inquiries Done) Color Very LowRed LowOrangeRed MediumOrange HighYellow REGIONS SHOWING INCREASE IN CREDIT NEED 3.51 MM
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 13 How was the product acquisition mix in last 3 years? ACQUISITIONS OVER TIME Unsecured Loan Acquisitions down to 48% from 55% in Q1 2009
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 14 What is the home loan acquisition trend? HOME LOAN ACQUISITIONS OVER TIME Home Loan Acquisitions increased in 2009-2010, New Loans Booked decreasing since Q1 2011
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 15 Geographical view of home loan acquisitions Home loan acquisitions – 2009 Legend Ranges (Inquiries Done) Color Very LowRed LowOrangeRed MediumOrange HighYellow 1.06 MM
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 16 Home Loan Acquisitions Geographical view – 2010 REGIONS SHOWING INCREASED CREDIT CONSUMPTION Legend Ranges (Inquiries Done) Color Very LowRed LowOrangeRed MediumOrange HighYellow 1.51 MM
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 17 Home Loan Acquisitions Geographical view – 2011 REGIONS WHERE ACQUISITIONS DECREASED Legend Ranges (Inquiries Done) Color Very LowRed LowOrangeRed MediumOrange HighYellow 1.16 MM
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 18 Percentage Population How has the Acquisition Quality changed over time? CIBIL TransUnion Score Band © 2009 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION More customers in higher score bands indicating better acquisition quality
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 19 How did the home loans perform? Quarters of Acquisition New Home Loan Opened (Acquisition Vintage) Performance in 12 Months (Ever 90+) Q12009Q12010 FRAMEWORK Vintage Delinquency continues to drop
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 20 A deeper look at credit granted – what percentage of consumers have opened their first loan after 2007? NUMBER OF CONSUMERS WHO WERE EVER GRANTED CREDIT 105 million FIRST ACCOUNT OPENED BEFORE 2007 64 million 61% FIRST ACCOUNT OPENED AFTER 2007 41 million 39% DIDN’T OPEN ANY ACCOUNTS AFTER 2007 54 million 84% OPENED AN ACCOUNT AFTER 2007 10 million 16% CREDIT DORMANT CONSUMERS HOW HAS THE CREDIT SEEKING BEHAVIOR OF THESE CONSUMERS CHANGED?
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 21 PERIOD WHEN CONSUMER OPENED THEIR FIRST LOAN How has the leverage of these consumers increased over time? H1 2007 NEXT ACCOUNT OPENED WITHIN 6 MONTHS NEXT ACCOUNT OPENED BETWEEN 7 TO 12 MONTHS NEXT ACCOUNT OPENED BETWEEN 13 TO 18 MONTHS 8.5%8.2%5.1% 6.5%5.8%5.3% 6.6%8.0%7.3% H1 2008 H1 2009 8.6%10.4%8.8% H1 2010 NO ACCOUNTS OPENED IN 18 MONTHS 78.2% 82.4% 78.0% 72.2% 16.7% 1MM 19% 0.7MM L L L CHANGE IN CUSTOMER BURDEN POST ACQUISITION 5 MM 4 MM 3 MM
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 22 Consumers who opened their second loan with another FI WHAT TYPE OF LOAN THEY TAKE NEXT? WHERE FIRST LOAN WAS A HOME LOAN Credit Card Personal Loan Home Loan Auto Loan Two- Wheeler Others PERIOD WHEN CONSUMER OPENED THEIR FIRST LOAN H1 2007 H1 2008 H1 2009 H1 2010 31.8% 28.1% 16.4% 13.9% 11.0% 12.9% 21.9% 29.4% 34.5% 6.9% 7.6% 13.2% 5.8% 4.7% 4.4% 21.0%7.7%41.7%10.8%4.6% 19.8% 19.2% 18.7% 14.2% O O OPPORTUNITY TO DEEPEN RELATIOSHIP O O ARE THESE UNSECURED LOANS OPPORTUNITY FOR TOP UP OR FURNISHING LOANS
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 23 Summary Enquiry mix tilted towards secured loans Home loans enquiries at all time high and stable for last two quarters Home loan companies seeing increased activity in new regions while continuing to see high level of credit activity in the traditional markets Home loan acquisitions peaked in 2010, a downward trend seen since last couple of quarters Acquisition quality at all time high with large no. of customers above 800 CIBIL TransUnion score. Loans acquired in last two years are performing much better Almost 20% first time customers take another loan within 12 months More than 65% first time home loan customers who opened a second loan within 12 months tend to take another home loan or unsecured loan from another FI
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 24 CIBIL TransUnion Products and Capabilities Bureau Data CIBIl TransUnion Score ID Verfication BCC BCC BCC Inquiry Triggers CIBIl TransUnion Score ID Verification CIBIL Detect Mortgage Check Collections Optimization Consumer Information Report Next Best Product Express Acquistion Solution AcquisitionAccount Management Cross SellCollections
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION 25 Thank You
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