Credit Risk Management

Size: px

Start display at page:

Download "Credit Risk Management"

Wilfrid O’Neal’
10 years ago
Views:

1 Experts for Credit Risk Management in Russia, Baltic States and CIS Credit information Trade Credit Insurance Debt collection 2011 IGK Group

2 First IGK company was registered in Germany 1992 First companies of IGK Group were registered in Russia and Baltic States 1993 IGK Holding was registered in Germany. SCRL (Coface) and Intercredit Holding became members of IGK Holding Expansion in Lithuania, Latvia, Estonia, Ukraine, Russia Separation from Coface 2007 Cooperation with leading Trade Credit Insurance 2011 companies: Euler Hermes, Atradius, Ducroire, Sinosure, Ksure, Mapfre, Ingosstrakh-ONDD and other. 2

3 IGK has 20 years experience in credit risk management services: Credit reports Monitoring Debt collection Trade Credit Insurance Factoring Consulting Financing 3

4 IGK AG Bonn, Germany IGK Service Latvia IGK Credit Management Moscow IGK Service Lithuania IGK Service Estonia IGK Broker Baltic Balt Risk Baltics Risk Ukraine IGK Credit Management Nizhnij Novgorod IGK Credit Management Samara IGK Credit Management Chelyabinsk IGK Insurance Broker Russia IGK Services Rus Tambov Production office IGK Services Ukraine 4

5 Red IGK office Blue/Green IGK network 5

6 Payment terms = trade credits Debt - management Supplier Client Payment obligations??? 6

7 Structure of balance sheet from your company Assets Equity & Liabilities Fixed assets Capital & Reserves - Tangible % - Share capital % - Intangebile % - Additional paid in capital % - Financial % - Fair value and other reserves % - Retained earning carried forward % Current assets Liabilities - Stock % - Bank loans % - Trade receivables % - Payables to suppliers % - Other receivables % - Cash % - Advance from trade debtors % - Other current liabilities % 7

Analysis of clients information gathering IGK reports are approved by all main European Trade Credit Insurers for risk evaluation Annual reports from last 3 years Key ratios Plan for the next years

8 Analysis of clients information gathering IGK reports are approved by all main European Trade Credit Insurers for risk evaluation Annual reports from last 3 years Key ratios Plan for the next years Own payment experience Experiences from 3rd parties (business partners, information agencies, trade credit insurer) Action for payments Bankruptcy procedures Management Financial Data Payment experience Administrative Data OGRN-INN-KPP Legal address Real address Share capital Articles of incorporation Power of attorney Bank details Employees Top management Qualification Fluctuation Products Technology Sales strategy Finance Vendors Sector Economy 8

9 Analysis of clients information sources www Mass media Journals Scientific publications Financials Management Transparency Trust Public sources Company Information agencies Rating Agencies Trade Credit Insurer Professional information gatherer Official sources Register Statistik Court 9

10 Russian challenges Limited transparency of Russian management Tax optimized financial reports Limited profit Limited turnover Limited equity Limited credit history Group structures without official connections Using from off-shore entities Gry schemes 10

11 Analysis of clients Evaluation Mathematical systems Trade Credit Insurer IGK Scoring systems Information agencies Expert opinion Risk Committee of company 11

12 Analysis of clients Evaluation Rating IGK principles Probability of default within next 12 month Range Turnover in k A++ Lowest risk. Excellent business. High credit term 0,09% A+ Lower risk. Old established, stable company 0,47% A Low risk. Secured business on uptrend 1,07% B++ Risk below normal. Reliable business 2,18% B+ Normal risk. Business on uptrend 4,46% B Normal risk 13,36% C Risk above normal. Short term only 31,83% C- High risk. Full security only 61,70% D Higher risk. No credit term to be granted 84,15% F Highest risk. Company on the verge of bankruptcy 92,03% R R R R R R R R R R

13 Securities Physical Personal Insurance Factoring Mortgage Guarantee from bank Trade Credit Insurance Non recourse Pledge Surety legal entity Recourse Deposit Surety from private person Letter of Credit 13

14 Principals of Trade Credit Insurance Atradius Alfa Strakho vanjie Insured Client 1 Client 2 Coface ONDD Coface Ingos strakh- ONDD IGK Insurance Broker Insured Insured Client 3 Client n Euler Hermes ROSNO Risk transfer to Trade Credit Insurer Portfolio of debts Credit limit Receivables 14

15 Principals of Trade Credit Insurance RUR. Maximum liability Credit line Datum line Payment term Automatic cancellation Overdue notification Waiting period Indemnification days 15

16 Factoring + Trade Credit Insurance Non recourse + recourse factoring Customer 1 Factoring Client 1 Customer 2 Customer n Customer 1 Credit Insurer Factoring Company Factoring Client 2 Customer 2 Customer n Alfa Strakhovanjie Customer 1 Coface Ingostrakh-ONDD Credit Insurer Factoring Client n Customer 2 Customer 3 ROSNO / Euler Hermes Customer n 16

17 SWOT Analysis - Trade Credit Insurance Strengths: Risk mitigation Financial stability Risk can be calculated Collateral worthy and tax optimized Strengthen debt management in company Weaknesses: Bureaucratic requirements Risk policy of insurer not stable Cover depends not only from creditworthiness of debtor Trade Credit Insurance Opportunities: Conquer new markets with giving payment terms Strengthen own position in front of clients in case of disputes concerning payment delays Increase transparency and commercial goodness of market player Threats: Total following the risk policy of insurer by management 17

18 Securities Available Effort to create Expenses Worth Mortgage Pledge Bank guarantee Surety Letter of Credit Trade Credit Insurance Factoring 18

19 Analysis of clients Rating\Limit <10 <25 <50 <75 <100 <250 <500 <1000 <2500 <5000 >5000 A++ A+ A B++ B+ B C C- D F Risk category 1 Risk category 2 Risk category 3 Risk category 4 19

20 Services of IGK group Information Legal Securities Debt collection 20

21 Benefits of cooperation with IGK-group Alfa Strakhovanjie Coface Ingosstrakh- ONDD ROSNO / Euler Hermes Client 1 Client n Factor n Bank n IGK Insurance Broker IGK Credit Management Insured Insured Insured Non insured Non insured Non insured Buyer 1 Buyer 2 Buyer 3 Buyer 4 Buyer 5 Buyer 6 Buyer 7 Buyer n Why work with IGK? 20 years experience in credit risk management in CIS and Baltics Whole spectrum of services for professional credit risk management Information Trade credit insurance Debt collection Related services (IT, seminare, ) Economic power by using the complexity of all market participants - suppliers, trade credit insurer, banks, factoring companies together with information agency and insurance broker from IGK. This helps to strengthen the position of supplier who works with IGK group

22 Contact details: OOO IGK Insurance Broker 1 st licensed broker in Russia specialized on Trade Credit Insurance Bolshaja Semenovskaja, d.40, bldg.. 1, office 609, Business Center Agat Moscow, Russian Federation Andreas Steinborn Deputy General Director mobile: [email protected] Nataljia Pavlova Key account manager commercial [email protected] Ekaterina Bolabko Key account manager risk [email protected] tel.: web: 22

23 Andreas Steinborn Status Director of IGK AG, Bonn since September 2010 Deputy General Director of OOO IGK Insurance Broker Member of the board of the Association of Professional Insurance Broker in Russian Federation Consultancy Credit Risk Management in Russia information, trade credit insurance, debt collection, factoring Bolshaja Semenovskaja, d.40, bldg. 1, office 609, Business Center "Agat" Moscow, Russia Tel.: Mobile: web: Career Study Economy: Hochschule für Ökonomie, ; Hermes Kreditversicherungs-AG, since ; Sales representative - until Aug. 2005; Head of Representative Office Euler Hermes KV AG from 2005 until 2010; CEO OOO Euler Hermes Credit Management, Moscow Languages German, Russian, English 23

24 IGK Group One stop shop for credit risk management Credit information Trade Credit Insurance Debt collection 24

Euler Hermes the world leader in credit insurance RISK ASSESSMENT CREDIT INSURANCE DEBT COLLECTION

Euler Hermes the world leader in credit insurance RISK ASSESSMENT CREDIT INSURANCE DEBT COLLECTION Agenda 1 The Euler Hermes group 2 Our business 3 Our products and solutions 4 Our added value 2 The Euler