Thailand Financial Inclusion in Thai Credit Bureau s View. by Surapol Opasatien - CEO National Credit Bureau Co., Ltd

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Willis Woods
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1 Thailand Financial Inclusion in Thai Credit Bureau s View by Surapol Opasatien - CEO National Credit Bureau Co., Ltd

2 Thai credit bureau was set up after 1997 Asian Financial Crisis, supported by IMF In Thailand, Credit Bureau (National Credit Bureau or NCB) collects credit information from Financial Loan agreement only. We neither collect utility payment nor telephone numbers of borrowers

or NCB) collects credit information from Financial Loan agreement

3 Doing Business 2014 by World Bank Indicator DB 2013 Thailand Rank DB 2014 Thailand Rank Ease of Doing Business Rank st Rank in 2014 Singapore Indicator DB 2013 Thailand Rank DB 2014 Thailand Rank Getting Credit Rank st Rank in 2014 Malaysia Strength of legal rights index Depth of credit information index Public Credit Registry Coverage (% of adult) Private Credit bureau Coverage (% of adult)

Rank 70 73 1 st Rank in 2014 Malaysia Strength of legal rights index 5 5 10 Depth of credit information index

Household Debt Increase vs Debt Service Ratio by National Survey Debt per household income (only household with debt) Q3 13, household debt per GDP was 80.

4 Household Debt Increase vs Debt Service Ratio by National Survey Debt per household income (only household with debt) Q3 13, household debt per GDP was 80.1% Debt service ratio survey average = 34% Benchmark : household debt that may impact the economic growth is 85% per GDP Today 2014, Banks consider at this point = 40% Household income with debt (thousand baht/month) Total 9.5 No. of household with debt (million) Source: NESDB Symposium 2013, analyze by SCB EIC Source: K-Research and Bank of Thailand

1% Debt service ratio survey average = 34% Benchmark : household debt that may impact the economic growth is 85% per GDP Today

5 Credit Analysis Process Before and After Asian Financial Crisis 1997 Board Board Before crisis Roles and Responsibilities Today Roles and Responsibilities Risk Management Committee Credit Policy Customer acquisition Credit review and approval Operation after credit authorization Credit Policy Headquarters Branches - Analyze and review credit by themselves - Relationshipbased pricing Customer acquisition Credit review and approval Operation after credit authorization Relationship managers Sales team/branches Customer information Headquarters - Analyze credit using tools such as credit rating and credit scoring - Credit reviewing committee decides on large loans - Formula-based pricing with RAROC Headquarters/ Regional centers Source: Triratvorakul and Vacharachais, 2006

Customer acquisition Credit review and approval Operation after credit authorization Relationship managers Sales team/branches Customer information Headquarters - Analyze credit using tools such

6 Enquiry Transaction of Consumer System (Y2011-Y2013) 7,000,000 6,000,000 Household Debt Impact 5,000,000 4,000,000 Worst Flood Crisis 3,000,000 2,000,000 1,000,000 0 New Loan Approval Review Existing Customers

4,000,000 Worst Flood Crisis 3,000,000 2,000,000

7 Big picture of #accounts as of Y2013 classified by Product Type Total population in Thailand 67 Mil. people 25 Mil.customer from 78 members of Credit Bureau 70.7 Mil.accounts from 78 members of Credit Bureau 24 Mil.accounts : close + keep records by legal required 46.7 Mil.accounts : active + not closing *Population of age group (Work force) = 44,787, mil. in municipal area 23.7 mil. in non-municipal area *Source: The 2010 Population and Housing Census, National Statistical Office, Ministry of Information and Communication Technology Product #Accounts Y2013 YoY growth Credit Card 16,768,975 10% Personal Loan 13,984,992 11% Auto Loan 5,971,416 18% Housing Loan 2,693,638 5% OD 4,439,960 10% Others 2,873,586 16% TOTAL 46,732,567 11%

in non-municipal area *Source: The 2010 Population and Housing Census, National Statistical Office, Ministry of Information and Communication Technology Product #Accounts Y2013 YoY growth

8 Number of New Open Accounts (Y2011-Y2013) 3,500,000 3,000, mil. Acc. 8.7 mil. Acc. 8.5 mil. Acc. 2,500,000 Accounts 2,000,000 1,500,000 First Car Program Housing Loan Credit Card Auto Loan Personal Loan OD 1,000,000 Others 500,

9 Consumer database from Credit Bureau %Growth of account classified by delinquency (Number of Account view) 50.00% %Growth YoY by Delinquency Q HH.Debt 80.1% of GDP 40.00% 30.00% 20.00% Q HH.Debt 77.6% of GDP Special mention Account 10.00% 0.00% NPL or Bad Account % Q4/2011 vs Q4/2012 Q1/2012 vs Q1/2013 Q2/2012 vs Q2/2013 Q3/2012 vs Q3/2013 Q4/2012 vs Q4/2013 Normal 11.58% 11.97% 11.46% 10.52% 10.33% Days -6.11% 19.13% 24.56% 39.56% 33.45% >90 Days -2.43% 5.61% 6.49% 9.42% 10.72% Note : All active account (not distinguish co-borrowers)

10 Special Mention Monitoring 400,000 #Accounts Overdue Days by Product Types Accounts 350, , , , , ,000 50,000 Housing Loan Credit Card Auto Loan Personal Loan 160,000,000, ,000,000, ,000,000,000 0 Y2010 Y2011 Y2012 Y2013 Outstanding (baht) of Accounts Overdue Days by Product Types Baht 100,000,000,000 80,000,000,000 60,000,000,000 40,000,000,000 20,000,000,000 Housing Loan Credit Card Auto Loan Personal Loan 0 Y2010 Y2011 Y2012 Y2013

Y2010 Y2011 Y2012 Y2013 Outstanding (baht) of Accounts Overdue 31-90 Days by Product Types Baht 100,000,000,000

11 Credit Bureau s Role toward Financial Inclusion To members (financial institutions) Provide credit information of individuals and companies for professional credit analysis Provide statistic report as a risk management tools To public Warning alert about the increasing of bad debt Educate people about Financial Literacy: creditworthiness, over-indebtedness, and saving

statistic report as a risk management tools To public Warning alert about the increasing of

12 Credit Bureau Vision Not only data provider, but we aim to be Financial Infrastructure for Credit risk Governance in Thailand Early warning for Debt Tsunami Enhance credit risk capability for Financial Institution; provide value-added services Excellent standard Credit Bureau: Data quality, Confidentiality, Integrity, Availability Supporting tool for Financial literacy: creditworthiness education High performance organization; small organization with big specialist (90 staffs)

services Excellent standard Credit Bureau: Data quality, Confidentiality, Integrity, Availability Supporting tool for

13 Challenges of Thai Financial Inclusion Low income group Accessibility Over-indebtedness Financial Inclusion Financial Institution Speed Convenience Responsible Lending Government and Related Parties Intervene market mechanism; 1 st car / 1 st house program Financial Literacy

Institution Speed Convenience Responsible Lending Government and

14 Surapol Opasatien Chief Executive Officer Tel: Fax:

Performance of the Thai Banking System in the First Quarter of 2015

No. 26/2 Performance of the Thai Banking System in the First Quarter of 2 Mr. Jaturong Jantarangs, Senior Director, Financial Institutions Policy Group, reported the Thai banking system s performance in