T etiana Trishyna, B-09 Scientific supervisor Prof., Ph.D. Kuznetsova Svitlana Anatolievna Language consultant Samoilenko Svitlana Anatoliivna "Credit risk management in commercial banks" (based on JSC "OTP Bank") The Diploma paper on the theme 1
CONTENT INTRODUCTION CHAPTER 1 THEORETICAL FOUNDATIONS FOR MANAGING CREDIT RISKS OF COMMERCIAL BANKS 1.1. The essence of the credit risk management of commercial banks 1.2. Methods of Credit Risk Management in Commercial Banks: management and international experience 1.3. Macro - analysis of the credit risk management in commercial banks CHAPTER 2 ANALYSIS OF CREDIT RISK MANAGEMENT OF JSC "OTP BANK" 2.1. Organizational and economic characteristics of JSC "OTP Bank" 2.2. Politics of credit risk management of JSC "OTP Bank" Сreation of the consulting group to work with enterprises – borrowers, entities 2.3. Analysis of JSC "OTP Bank" credit risk management in 2010-2012 CHAPTER 3 IMPROVING CREDIT RISK MANAGEMENT EFFICIENCY OF JSC "OTP BANK" 3.1. Explicit evaluation system construction of credit risk 3.2. Сreation of the consulting group to work with enterprises – borrowers, entities 3.3 Implementation of «EGAR E4 Banking» CHAPTER 4 PROTECTION OF LABOR AND SECURITY IN EMERGENCY SITUATIONS of JSC "OTP Bank" 4.1 Labour protection system of JSC "OTP Bank" 4.2 Security in emergency situations at JSC "OTP Bank" CONCLUSIONS AND RECOMMENDATIONS APPENDIXES REFERENCES 2
The Purpose of investigation is to make a theoretical synthesis and develop practical recommendations of the credit risk management of commercial banks. The Object of research is credit risk of commercial banks. The Subject of research is credit risk management in commercial bank. The Basis of investigation is JSC "OTP Bank" 3
4 Credit risk is the possibility of loss of the principal amount of bank debt and unpaid interest as a result of counterparty non-performance of his/ her contract liabilit ies. (A. Lobanov)
Table 1 Classification of credit risk Criteria of credit risk classificationTypes of Credit Risk 12 By the terms of appearance - personal credit risk. - portfolio credit risk. By financial implications - Credit risk, which results in financial losses. - Credit risk, which results in loss of profits. - Credit risk, which results in financial income. By the field of origin - External (systematic). - Internal (unsystematic). By probability - realized credit risk. - potential credit risk By the status of the borrower- risk in lending to corporate clients. - risk in lending to entities. - risk in lending to individuals. - risk in lending to banks. - risk in lending to insiders By predictability- Expect able credit risk. - unpredictable credit risk By type of loan operations- risk with the direct loan. - risk when dealing with the bills. - risk in leasing transactions. - risk in factoring transactions. - risk in guarantee operations By possibility of taking the risk - risk that is taken by the bank on its own. - risk that is transferred to the insurance company (the guarantor). - risk that is shared between other banks. 5
6 Credit Risk Management is a set of measures that are aimed to minimizing costs to determine the optimal value of risk and income. (A.O. Milay)
7 Norm Standard value (%) 01.01.2012 (%) 01.01.2013 (%) Maximum amount of credit exposure to a single counterparty (N7) 2512,6113,02 Large credit risks (N8) 80036,4338,15 Maximum amount of loans and guarantees to one insider (N9) 54,224,30 Maximum aggregate amount of loans and guarantees granted to insiders (N10) 3015,6617,07 Table 2 The rates of credit risk of JSC "OTP Bank"
8 Figure 1 Dynamics of the maximum credit risk change of JSC "OTP Bank"
9 Figure 2 Dynamics of changes in credit ratings of AA, A and BBB from 2010 - 2012, in thousands of UАН
10 Block of analysis Profile borrower Borrower The decision on granting (refusal) loan Block of decision State Tax Service of Ukraine Technical Inventory Bureau State Inspection of Ukraine on land transport security State Migration Service of Ukraine COCO CONCLUSIONSCONCLUSIONS Figure 3 Upgraded circuit borrower assessment – an individual in JSC "OTP Bank" 1.EXPLICIT EVALUATION SYSTEM CONSTRUCTION OF CREDIT RISK
11 2.СREATION OF THE CONSULTING GROUP TO WORK WITH ENTERPRISES – BORROWERS, ENTITIES The purpose of the consulting groups is collecting information related to the recent economic and political news, stock market, the state of business - partners working with this client and inform the borrower.
Банк 12 3.IMPLEMENTATION OF «EGAR E4 BANKING» Table 3 General structure and characteristics of «EGAR E4 Banking» Name of systemCharacteristic of system Loan products of JSC "OTP Bank", which is recommended the use of system To assess the creditworthiness and credit risk individuals «EGAR Scoring» solves the problem of comprehensive evaluation of the creditworthiness of the individual and includes the traditional scoring systems capabilities, and entirely new items. for all credit products provided by JSC "OTP Bank" for individuals. «EGAR Application Scoring» allows to evaluate the credit worthiness of an individual based on its socio- demographic background, as well as the dynamics of economic performance, irrespective of the status of your credit history. «Cash loan «Pension»», «Cash loan «Express»».
13 To assess the creditworthiness and credit risk individuals «EGAR Behaviour& Collection Scoring» Is used to analyze the quality and management of debt arrears on consumer loans, credit cards, car loans, mortgages and loans to small businesses. «Car Loan», «Housing loan from OTP Bank», «Loan against residential property by OTP Bank», «Loan secured by residential real estate»,for credit cards of JSC «OTP Bank» «Visa Classic», «Visa Gold », « Visa Platinum ». To assess the creditworthiness and credit risk of entities «EGAR Market Scoring» allows to calculate the probability of bankruptcy - the borrower during the period of the agreement. «Financing of working capital of OTP Bank», «risk-free lending limits of OTP Bank («technical» Loans, Limits, collateralized deposits)» and others. Continuation Table 3
14 The report is completed. Thank you for your attention!