The Diploma paper on the theme
"Credit risk management in
commercial banks" (based on JSC
"OTP Bank")
Tetiana Trishyna, B-09
Scientific supervisor
Prof., Ph.D. Kuznetsova Svitlana Anatolievna
Language consultant
Samoilenko Svitlana Anatoliivna
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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
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 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"
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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
liabilities.
(A. Lobanov)
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Table 1
Classification of credit risk
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Criteria of credit risk classification
Types of Credit Risk
1
2
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 individuals.
- risk in lending to insiders
By predictability
- Expectable credit risk.
- unpredictable credit risk
By type of loan operations
- risk with the direct loan.
- risk in leasing 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.
- risk in lending to entities.
- risk in lending to banks.
- risk when dealing with the bills.
- risk in factoring transactions.
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)
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Table 2
The rates of credit risk of JSC "OTP Bank"
Norm
Maximum amount of
credit exposure to a
single counterparty
(N7)
Large credit risks (N8)
Maximum amount of
loans and guarantees to
one insider (N9)
Maximum
aggregate
amount of loans and
guarantees granted to
insiders (N10)
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Standard
value (%)
01.01.2012
(%)
01.01.2013
(%)
25
12,61
13,02
800
36,43
38,15
5
4,22
4,30
30
15,66
17,07
Figure 1 Dynamics of the maximum credit risk change of JSC "OTP
Bank"
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Figure 2 Dynamics of changes in credit ratings of AA, A and BBB from
2010 - 2012, in thousands of UАН
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1.EXPLICIT EVALUATION SYSTEM CONSTRUCTION OF CREDIT RISK
Block of analysis
Profile
borrower
Borrower
The
decision
on
granting
(refusal)
loan
C
O
N
C
L
U
C
S
O
I
O
N
S
State Tax Service of
Ukraine
Technical Inventory
Bureau
State Inspection of
Ukraine on land
transport security
State Migration
Service of Ukraine
Block of decision
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Figure 3 Upgraded circuit borrower assessment – an individual in JSC "OTP Bank"
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.
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3.IMPLEMENTATION OF «EGAR E4 BANKING»
Table 3
General structure and characteristics of «EGAR E4 Banking»
Loan products of JSC "OTP
Bank", which is recommended
Name of system
Characteristic of system
the use of system
«EGAR Scoring»
To assess the creditworthiness and credit risk individuals
solves the problem of comprehensive for all credit products provided
evaluation of the creditworthiness of the by JSC "OTP Bank" for
individual and includes the traditional individuals.
scoring systems capabilities, and entirely
new items.
«EGAR Application allows to evaluate the credit worthiness of «Cash loan «Pension»», «Cash
Scoring»
an individual based on its socio- loan «Express»».
demographic background, as well as the
dynamics of economic performance,
irrespective of the status of your credit
history.
Банк
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Continuation Table 3
To assess the creditworthiness and credit risk individuals
«EGAR Behaviour& Is used to analyze the quality and «Car Loan», «Housing loan
Collection Scoring» management of debt arrears on consumer from OTP Bank», «Loan against
loans, credit cards, car loans, mortgages residential property by OTP
and loans to small businesses.
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 allows to calculate the probability of «Financing of working capital
Scoring»
bankruptcy - the borrower during the of OTP Bank», «risk-free
period of the agreement.
lending limits of OTP Bank
(«technical» Loans, Limits,
collateralized deposits)» and
others.
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The report is
completed.
Thank you for
your attention!
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