BCT Dialogue
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Transcript of BCT Dialogue
DIALOGUE SESSION WITH BCT
17 April 2012
1. Approving Authority
2. CB Loan Portfolio & BCT
3. Industry Outlook 2012
4. Roles & Responsibilities of BCT
5. Challenges & Concerns
6. Q & A
7. Contact BCT
AGENDA
APPROVING AUTHORITY
APPROVING AUTHORITY
GROUP WHOLESALE BANK RISK COMMITTEE (GWBRC)(Independent Evaluation : CRM)(Independent Evaluation : CRM)
Up to RM400MPer borrower basis
REGIONAL CREDIT COMMITTEE (RCC) (Independent Evaluation : RCM)(Independent Evaluation : RCM)
Up to RM400M
Non Malaysian centric customers
CONSUMER BANK CREDIT COMMITTEE (CBCC)(Independent Evaluation : BCM)(Independent Evaluation : BCM)
Up to RM50M Per borrower basis subject to maximum Group Exposure of RM100M
COMMERCIAL BANKING(Independent Evaluation : BCT)(Independent Evaluation : BCT)
Up to RM10M Per borrower basis of which up to RM2M unsecured subject to Group Exposure not exceeding RM40M, of which up to RM5M is unsecured
ATTACHMENT 3.4 (CPG) – Effective date: 9/2/2012
ATTACHMENT 3.4 (CPG) – Effective date: 9/2/2012
CB LOAN PORTFOLIO & BCT
BREAKDOWN OF CB ACCOUNTS
LIMITLIMIT NONO %%
< = RM10M< = RM10M 6,359 6,359 95%95%> RM10M to RM50M> RM10M to RM50M 284284 4%4%
> RM50M> RM50M 31 31 1%1%TOTALTOTAL 6,674* 6,674* 100%100%
*As at Feb 2011
6,359 , 96%
284 , 4%
31 , 0%
3,080 , 48%
2,008 , 32%
709 , 11%
562 , 9%
LIMITLIMIT NONO %%
< = RM1M< = RM1M 3,080 3,080 48%48%
> RM1M to < = RM3M> RM1M to < = RM3M 2,008 2,008 32%32%
> RM3M to < = RM5M> RM3M to < = RM5M 709 709 11%11%
> RM5M to < = RM10M> RM5M to < = RM10M 562 562 9%9%
TOTALTOTAL 6,359 6,359 100%100%
BREAKDOWN OF CB ACCOUNTS – RM10M & BELOW
*As at Feb 2011
CB LOAN PORTFOLIO – Loan Outstanding
LIMITLIMIT RMRM %%
< = RM10M< = RM10M 7,007,419,086 7,007,419,086 60%60%
RM10M to RM50MRM10M to RM50M 3,000,395,924 3,000,395,924 26%26%
> RM50M> RM50M 1,692,636,982 1,692,636,982 14%14%
TOTALTOTAL 11,700,451,992* 11,700,451,992* 100%100%
60%
26%
14%
*includes contingent as at Feb 12
CB LOAN PORTFOLIO – No of Account OLD DA OLD DA
LIMITLIMIT NONO %%< = RM5M< = RM5M 5,797 5,797 87%87%
> RM5M to RM40M> RM5M to RM40M 834 834 12%12%> RM40M> RM40M 43 43 1%1%TOTALTOTAL 6,674* 6,674* 100%100%
NEW DANEW DALIMITLIMIT NONO %%
< = RM10M< = RM10M 6,359 6,359 95%95%> RM10M to RM50M> RM10M to RM50M 284 284 4%4%
> RM50M> RM50M 31 31 0%0%TOTALTOTAL 6,674 6,674 100%100%
DIFFERENCEDIFFERENCELIMITLIMIT NONO %%
< = RM10M< = RM10M 562 562 8%8%> RM10M to RM50M> RM10M to RM50M (550)(550) -8%-8%
> RM50M> RM50M (12)(12) 0%0%TOTALTOTAL - - 0%0%
*as at Feb 2012
Plus new accounts
-
20
40
60
80
100
120
140
160
180
TOTA
L SU
BMIS
SIO
N (B
Y NO
)
GWBRC 12 10 17 16 18 11 20 11 17 10 12 11 19 4 4
CBCC 76 59 82 81 53 81 57 69 61 67 55 61 46 48 39
BCT 45 39 66 52 52 63 47 69 46 69 62 82 45 48 84
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
Total 133 108 165 149 123 155 124 149 124 146 129 154 110 100 127
Total 2011Total 2011 %% Q1 2011 Q1 2011 %% Q1 2012Q1 2012 %% GWBRCGWBRC 165165 1010 3939 1010 2727 88 CBCCCBCC 802802 4848 217217 5353 133133 3939 BCTBCT 692692 4242 150150 3737 177177 5353 TotalTotal 1,659 1,659 100100 406406 100100 337337 100100
SUBMISSION TRENDING* – GWBRC, CBCC & BCT
*New & enhancement only
-
100
200
300
400
500
600
700
800
900
1,000
TOTA
L SU
BMIS
SIO
N (B
Y AM
T)
GWBRC 155 190 410 552 364 335 390 211 229 278 468 241.6 559 178 37
CBCC 287 208 330 219 251 434 230 333 247 264 240 247 235 357 388
BCT 56 49 95 63 81 92 67 101 71 91 75 128 72 84 177
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
Total 499 447 834 834 696 861 687 645 548 633 782 616 866 619 602
Total 2011Total 2011 %% Q1 2011Q1 2011 %% Q1 2012Q1 2012 %%GWBRCGWBRC 3,824 3,824 4747 755 755 4242 774 774 3737CBCCCBCC 3,289 3,289 4141 825 825 4646 980 980 4747BCTBCT 970 970 1212 200 200 1212 334 334 1616TotalTotal 8,082 8,082 100100 1,780 1,780 100100 2,087 2,087 100100
SUBMISSION TRENDING* – GWBRC, CBCC & BCT
*New & enhancement only
SUBMISSION TO BCT – NEW & ENHANCEMENT 2012
Jan Feb Mar Jan Feb Mar
BY NO BY AMT (RM’M)
45 48
84
71.9 84.3
177.4
75% ↑75% ↑ 110% ↑110% ↑
SUBMISSION TO BCT – ALL CA 2012
Jan Feb Mar Jan Feb Mar
BY NO BY AMT (RM’M)
197
346454
291.4
615.1
931.1
31% ↑31% ↑ 51% ↑51% ↑
Lim Ai LeanLim Ai Lean
Credit ManagerCredit ManagerBusiness Credit Team IBusiness Credit Team I
Ramanathan ChettiarRamanathan Chettiar
Credit ManagerCredit ManagerBusiness Credit Team IIBusiness Credit Team II
Lim Liang HoeLim Liang Hoe
Credit ManagerCredit ManagerBusiness Credit Team IIIBusiness Credit Team III
Yong Ee-LinYong Ee-Lin
Credit ManagerCredit ManagerBusiness Credit Team IVBusiness Credit Team IV
1. Penang1. Penang 2. Menara BHL 2. Menara BHL 3. Sarawak 3. Sarawak 4. Sabah 4. Sabah 5. Perak 5. Perak 6. Puchong6. Puchong
1. JBU1. JBU 2. Kedah/Perlis2. Kedah/Perlis 3. Seremban3. Seremban 4. Melaka4. Melaka 5. Virtual 5. Virtual 6 PDM 6 PDM
1. Johor1. Johor 2. Kelantan2. Kelantan 3. Pahang3. Pahang 4. Terengganu4. Terengganu 5. SAT 5. SAT 6. CBS6. CBS
1. KL 11. KL 1 2. KL 22. KL 2 3. KL 33. KL 3 4. Shah Alam4. Shah Alam 5. Jalan Barat5. Jalan Barat 6. Klang 6. Klang
255255539539262262238238
213 213 109109
BC BC NONO
TOTALTOTAL 1,6161,616
BC BC
BC BC
BC BC NONO NONO NONO
9898265265287287306306NANA367367
545545174174231231130130NANA55
248248294294262262252252555555236236
TOTALTOTAL
TOTALTOTAL
TOTALTOTAL 1,3231,323 1,0851,085 1,8471,847
CREDIT MANAGERCREDIT MANAGER NONO %%Lim Ai LeanLim Ai Lean 1,616 1,616 28%28%
Ramanathan Ramanathan 1,323 1,323 23%23%Lim Liang HoeLim Liang Hoe 1,085 1,085 18%18%
Yong Ee-linYong Ee-lin 1,847 1,847 31%31%TOTALTOTAL 5,871*5,871* 100%100%
BREAKDOWN OF CB ACCOUNTS (RM10M & BELOW) – BY CREDIT MANAGER
*As at Feb 2011, excludes BLA & z accounts
ORGANIZATIONAL CHART
18
HR CHALLENGES
1. 1. RECRUITMENTRECRUITMENT:
• Credit Evaluators - Currently 8 Credit Evaluators
• To increase to 16
• Credit Managers - Currently 4 Credit Managers
• Fraud Detection Team - New
• To work with Venkat & team and collaborate with RCO (Wai Cheng)
2. 2. ATTACHMENTATTACHMENT:
• Attachment at BCM for Credit Evaluators - 1 month
PROCESS IMPROVEMENT
1. 1. ANNUAL REVIEWSANNUAL REVIEWS:
• To get concurrence from CCZ
• To work with CCZ to develop Annual Review Guide
2. 2. NEW & ENHANCEMENTSNEW & ENHANCEMENTS – Escalation Process:
• BCT to have first right of refusal before escalation to CB Management
3. 3. DA FOR CREDIT MANAGERDA FOR CREDIT MANAGER:
• Up to RM2M unsecured for new & enhancements – 1 person to sign
4. 4. VISIT TO ALL REGIONSVISIT TO ALL REGIONS:
• To brief BCs of the new DA etc
INDUSTRY OUTLOOK 2012
INDUSTRY OUTLOOK 2012
FAVOURABLE
• Oil and gas, plantation, construction, rubber glove and F&B industries.
• Positive outlook on building materials industry especially in infrastructure related activities due to ETP
• Should work with CCS and Corporate Bkg to enhance our position in the construction sector, targeting especially sub contractors involved in ETP projects.
CHALLENGING
• To remain cautious on real estate particularly commercial development.
• Be vigilant on resort development which is in the negative list
• Hotels, furniture, scrap metal, garment & textile, manufacturing of shoes
HOTEL FINANCING
ROLES & RESPONSIBILITIES OF BCT
• Protect the Bank’s interest in terms of recommending quality loans and observe the principle of “risk vs return”
• Provide independent validation and research for CB to make informed decisions.
• Ensure compliance of terms and conditions
• Sharing of information / loan structuring and ideas with SBU
• Ensuring the Bank’s Policy and Procedure & statutory and regulatory provision are adhered to
ROLE OF INDEPENDENT CREDIT EVALUATION
• Background of the borrower eg. Shareholders, nature & viability of business, management
• Financial analysis
• Track record – CCRIS, CTOS, market check
• Risk analysis
• Recommendation & Rationale
INDEPENDENT EVALUATION COVERAGE
PLEASE GOOGLE
• Please "google" the names of the company and directors whenever you process New/Additional cases so that we can make informed decisions.
A STORY TO SHARE
• A simple straight forward BPL
• C Sdn Bhd is buying a 4 storey office cum factory from F Sdn Bhd
• The said property is currently charged to us for facilities granted to F Sdn Bhd
• F Sdn Bhd is a potential NPL a/c
• BC did not probe further
• BCT spent 2 days to do the checkings
• Help us to help you…
CHALLENGES & CONCERNS
SUBMISSION OF CA Group ExposureGroup Exposure for correct routing of papers.
Case 1: Unsecured portion of RM2.4M
Case 2: Unsecured portion of RM4.6M
Case 3: Exposure to Selangor State Govt (30% shareholding)
Case 4: Regional Exposure (S’pore) not aggregated
Case 5: Bridging loan for RM10.5M
How Obtained?How Obtained?
In BIR – referred by CIMB staff
To clearly state the referee’s name & to elaborate further in credit memo
Application HistoryApplication History Previous applications (within a year) rejected
by the bank not highlighted in CA
Enhancement for Watchlist AccountEnhancement for Watchlist Account
CCZ recommends BC to reduce exposure but BC put up for enhancement
BC to get concurrence from CCZ before submitting and to indicate clearly under preamble
CTOS & CCRIS CTOS & CCRIS
Credit summary reports on existing borrower and guarantors are not available for assessment via BCS
Special attention account, returned cheques incidences, previous defaulted loan under director’s related company
Business activity described as manufacturing but financials shows no plant & machinery”
GROUP EXPOSURE AND DA
MORE DA EXAMPLES
• RM1.53M BPL financing is within Centre level of authority
• Appeal solely on pricing reduction. BC is to obtain approval from the Head of Commercial Banking via CCZ (fka CMC).
• Request for reduction in pricing. Unsecured of RM3.29Mil per borrower should be under CBCC level of authority
• Prop value rose by RM600K from RM1.9M to RM2.5Mil (verbal) within 5 months during current uncertain economic condition, reducing clean to RM1.7M.
• Proposed limit: RM10M, SPA (09/01/2012): RM7.68M, EMV: RM13.8M
• What is the clean exposure? NIL or clean RM2.3M
• Answer: Per CIMB Group Framework for Valuation of Real Estate Property Section 2.1.6, in the event of market values received from the independent checks differs from the value stated in SPA, the approving authority will adopt the lowest value available as the market value of the property.
MISREPRESENTATION OF INFORMATION
NON STANDARD CLAUSE IN BG FORMAT• DECISION
• “To allow the benefit of guarantee to be assigned by LLM (under clause 7 of the said BG and agreed by BG Hub, GIOD TPC) (Please refer to BG Hub email comments dated 28/02/2012 attached)”
• RATIONALE
• “Our BG Hub had vetted the contents of the said BG and of view the assignment of BG as per item 2 above, will not heighten the bank’s risk exposure”
• BG HUB EMAIL
• “Pls be informed that in order to issue this BG format, the following must be obtained:
•Approval from approving authority to allow the assignment of the BG (Clause 7 of the BG)”
• As loan owner, BC should probe further on the need to have Clause 7, its implications, mitigations and address all these in CA
MATERIAL DISCREPANCIES
• To explain in detail the reasons for such serious discrepancies in the memo instead of just amending the CR09
INTEREST RATE COMMENCEMENT DATE
UNNECCESSARY MISTAKES
• WRONG SPELLING OF NAME
• BCC, on 12 Jan 2012, approved additional facilities of RM5.7M making a new limit of RM7.25M.
• BC has notified that the name of one of the guarantors should be Soh Chee Khong instead of Soh Chee Kong.
• OMISSION OF EARLY SETTLEMENT CLAUSE
• CBCC, on 15 Mar 2012, approved CL-i RM800K, TF-i of RM1.6M and MOL-i of RM3.2M. However, BC has overlooked the early settlement clause for TF-i.
a) BNM Sector Code (should be same in AA and ICRES)
b) Entity Code - B,I,G,F and L
c) Risk Weight / BG Tenure / BG pricing-to tier pricing if >24 months
d) Security Cover—For CPG (x). For property - no longer 60% use 100%
e) Property details - Type/Remaining Lease / Land & Built Up Area / Postal Address
f) Latest value / Date / Panel Valuer / verbal / formal
g) Specify whether to impose or waive formal valuation after 2 years.
MORE POINTS…
CHALLENGES 1. Borrowings with other banks – Type, Limit, O/S, Collateral.2. CCRIS Summary Page not enclosed3. Financial analysis i.e. unusual numbers / irregular trends /
capital leakages / intangibles / contingent liabilities/debtors ageing etc4. To align Group Review5. Compliance – financial covenants e.g. Gearing covenant (to highlight in AA
during renewal / request for additional limits.)6. Compliance – product eligibility criteria e.g. BPL / FSMI2 / SAGS etc7. Amendments/Appeal AA – ensure approval terms are stated8. Highlight connected party – relationship and position and job functions of
staff9. No relieve officer to attend to queries
1. Sinking fund not collected & up to date.
2. Contract proceeds not collected.
3. Approvals for reduction in borrower’s limit, changing of terms were not adhered to by SBUs. Instead of sending the Borrower a letter of notification, SBUs send a letter of offer which Borrower does not accept.
4. Compliance of covenants not checked.
5. CGC guarantee expired / almost expired and not renewed.
6. Is actual security documents intact? (instead of relying only on system).
7. As BCM/CRM/BCT relied on the spreadsheet provided by SBU to conduct our analysis, is the spreadsheet filled up accurately?
CONCERNS
Q & A
CONTACT BCT
EVALUATOR TEL NOCinsy Choy Soek
See 03 - 2619 1946
Carmen Chin 03 - 2619 2014
Teh Chooi Eng 03 - 2619 2006
Voon Siew Peng 03 - 2619 2007
Chong Mei Jin 03- 2619 2807
Alinis Delina Ahmad 03-2619 1112
Elicia Cheah Suan Ee 03 - 2619 2010
Chuah Han Beng 03 - 2619 2011
Lim Hong Keow 03 - 2619 2012
CREDIT MANAGER TEL NOLim Ai Lean 03 - 2619 2020
Ramanathan a/l Annamalai Chettiar 03 - 2619 3313
Lim Liang Hoe 03 - 2619 1198
Yong Ee-Lin 03 - 2619 2008