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Transcript of Presentation to Credit Union Workshop St. Vincent and the Grenadines By Shelton Nicholls Resident...
Financial Soundness Indicators:
Presentation to Credit Union Workshop St. Vincent and the Grenadines
By
Shelton NichollsResident Adviser on Financial Stability, CARTAC
1. Credit Unions in the Caribbean Financial System (Stylized FACTS)
2. Framework for Developing Financial Soundness Indicators1. CAMELS and PEARLS Framework2. CAMELS/PEARLS COMPARISON
3. Financial Soundness Indicators:1. Core /Enhanced (Deposit-Takers)2. Pearls Ratios3. CAMELS/PEARLS COMPARISON
4. Reporting Regime for Credit Union Financial Indicators
5. Application of PEARLS to a Caribbean Credit Union
6. Database Development for Credit Unions: Often Neglected Area!
7. Imperatives for Enhanced Regulation of Credit Union Sector.
FORMAT OF PRESENTATION
Credit Unions in Caribbean Financial Structure
1.0 Credit Unions in Caribbean Financial System
Domestic On-shore Financial Sector is quite large relative to the size of the regional economy.
◦ Total financial assets amount to around 131% of regional GDP (IMF estimate, WP/13/175)(p.7) Banking System Assets (95% of regional GDP) Non-Banking System Assets (36% of regional GDP)
Insurance Companies (20% of regional GDP) Security Firms (9% of regional GDP) Credit Unions (7% of regional GDP)
1.1 Credit Unions in Caribbean Financial System
Share of Indigenous institutions in the Caribbean on-shore financial sector in decline.
Foreign Banks dominate landscape of Caribbean Financial Sector◦ 60% of regional banking assets held by Canadian-
based banks.
1.2 Credit Unions in Caribbean Financial System
Credit Union Sector has grown in several Caribbean countries:
Financial Assets to GDP Dominica (39% of national GDP) Belize (21% of national GDP) Barbados (17% of national GDP) Grenada, St. Vincent and St. Lucia range between
13% and 19% of GDP of these respective countries.
Financial Institution
Commodity –Based
Producers
Service-Based
Producers
ECCU Area
Total Caribbean
Banks 14 67 40 81
Credit Unions
154 163 61 317
Insurance Companies
60 218 61 278
Offshore Banks
- 143 na 143
Total 200 614 200 818
1.3 Credit Unions in Caribbean Financial SystemNumber of Credit Unions
2. Financial Soundness Framework :
CAMELS/PEARLSCredit Unions
CAMELS FRAMEWORK ◦ Revolves around the following six groups of
indicators that focus on the health of financial institutions. Capital Adequacy Asset Quality Management Soundness Earnings and Profitability Liquidity Sensitivity to Market Risks
2.1 FINANCIAL SOUNDNESS FRAMEWORK: CAMEL
C
A
M
E
L
S
CapitalAdequacy
• Determines how well financial institutions manage shocks to their balance sheets by focusing on capital position of institution to support loan portfolio growth and potential deterioration in assets.
Asset Quality• Judges overall quality of assets by looking
at exposure of assets in institutions portfolio to various risks.
M’gmt Soundness
• Judges overall soundness and effectiveness of management of the institutions by looking at governance, human resources, processes, controls and audit.
2.1a FINANCIAL SOUNDNESS FRAMEWORK: CAMEL
Earnings & Profitability
• Judges the Institution’s ability to generate to absorb losses by building an adequate capital base, finance expansion and pay dividends to its share holders.
Liquidity
• Judges ability of Institution to meet its present and anticipated cash flow needs including funding loan demand, share withdrawals and liabilities and expenses.
Sensitivity to Mkt Risks• Judges the sensitivity of loans and
deposits to sudden changes in interest and exchange rates.
2.1b FINANCIAL SOUNDNESS FRAMEWORK: CAMEL
PEARLS FRAMEWORK
◦ Adopted by WOCCU in 1994;◦ Revolves around the following six groups of indicators
that focus on the health of financial institutions. Proposes a system of 44 financial ratios that deal with: Protection Effective Financial Structure Asset Quality Rates of Return Liquidity Signs of Growth
2.2 FINANCIAL SOUNDNESS FRAMEWORK: PEARLS
P E
A
R
L
S
Protection• Assesses extent to which credit unions can
provide a safe environment to protect their members’ money.
Effective Financial Structure
• Gauges financial structure of credit unions by assessing sources and uses of funds. Financial structure is effective when assets, financed by savings deposits, generate sufficient income to pay market rates on savings, cover operating costs and maintain capital adequacy.
Asset Quality• Assesses overall quality of assets and
identifies impact of non-earning assets on credit union income.
2.2a FINANCIAL SOUNDNESS FRAMEWORK: PEARLS
Rates of Return & Costs
• Monitors the return on all types of assets (uses of funds) as well as the costs of each liability. Looks at how yields and costs affect the growth of the credit union.
Liquidity
• Judges ability of Institution to meet its present and anticipated cash flow needs including funding loan demand, share withdrawals and liabilities and expenses
Signs of Growth
• Judges the growth of various areas in credit unions with a view to assessing member-client satisfaction as well as to help management maintain an effective financial structure.
2.2b FINANCIAL SOUNDNESS FRAMEWORK: PEARLS
MAIN AREAS CAMELS PEARLS
REGULATORY/SUPERVISORY FRAMEWORK
SUPERVISORY TOOL
INDUSTRY BENCHMARKING TOOL
INFORMATION USED
MIX OF QUANTITATIVE
AND QUALITATIVE INFORMATION
LARGELY QUANTITATIVE INDICATORS
NATURE OF SUPERVISORY EXAMINATION
REQUIRES ON-SITE AND
OFF-SITE EXAMINATION
ON-SITE EXAMINATION NOT
REQUIRED
Comparing CAMELS AND PEARLSMain Differences
3. Financial Soundness Indicators
CAMEL-BASED AND PEARLS-BASED
Conceptual Framework and Classification for Financial Soundness Indicators developed by IMF around 2001 with input from international bodies.
Financial Soundness Indicators Compilation Guide published in 2006.
New Compilation Guide with a focus on non-banks being prepared.
3.1Financial Soundness Indicators
Institutional Sector
•Financial Corporations
Deposit-takers •Commercial banks•Investment banks•Mortgage Banks•Development Banks•Savings and Loans Assoc.•Building Societies•Credit Union/Co-operatives•Micro-Finance Institutions
•Other Financial Corporations
Engaged in Financial Intermediation (but Non-Deposit Takers)
•Insurance Corporations•Pension Funds•Investment Funds•Securities Dealers
3.2 Classification for FSI Compilation: Financial Corporations
3.2b Financial Soundness Indicators: Core Indicators for Deposit-Taking Institutions
CAMEL FRAMEWORK KEY INDICATORS
Capital Adequacy• Regulatory capital to risk -weighted assets• Regulatory tier 1 capital to risk -weighted
assets
Asset quality
• Non-performing loans to total gross loans• Non-performing loans net of provision to
capital• Sectoral distribution of loans to total loans
Earnings and Profitability
• Return on Assets• Return on Equity• Net interest margin to gross income• Non-interest expenses to gross income
Liquidity • Liquid assets to total assets• Liquid assets to short-term liabilities
Sensitivity to market risk • Net open position in foreign exchange to capital
KEY INDICATORS
Deposit-Takers • Capital to assets• Large Exposures to capital• Geographical distributions of loans to
total loans• Gross asset position in financial
derivatives to capital• Gross liability position in financial
derivatives to capital• Trading income to total income• Personnel expenses to noninterest
expenses• Spread between reference lending and
deposit rates• Spread between highest and lowest
interbank rate• Customer deposits to total loans• Foreign currency-denominated loans to
total loans• Foreign currency-denominated liabilities
to total liabilities• Net open position in equities to capital
3.2c Financial Soundness Indicators: Encouraged Set
KEY INDICATORS
Other Financial Corporations • Assets to total financial system assets• Assets to GDP
Nonfinancial Corporations • Total debt to equity• Return on equity• Earnings to interest and principal expenses• Corporate net foreign exchange exposure to
equity• Number of applications for protection from
creditors
Households • Household debt to GDP• Household debt service and principal
payments to income
Market Liquidity • Average bid-ask spread in the securities market
• Average daily turnover ratio in the securities market
Real Estate Markets • Real estate prices• Residential real estate loans to total loans• Commercial real estate loans to total loans
3.2d Financial Soundness Indicators: Encouraged Set
Although not mentioned in FSI Compilation Guide (2006), PEARLS has emerged as a prudential standard for credit unions operating worldwide.
◦ Provides standardised financial ratios for individual credit unions.
◦ While meeting specific needs of credit unions, complements existing financial soundness indicators based on other frameworks (CAMEL).
3.3 PEARLS Financial Soundness Ratios
P - Protection Ratios Goals (Excellence)
P1. Loan Losses Allowances / Delinq. Loans >12 Mo. 100%
P2. Net Loan Loss Allowances / World Council Allowance Required for Delinq. 1-12 Mo. 35%
P3. Complete Loan Charge-off of Delinq. > 12 Mo. Yes
P4. Annual Loan Charge-offs / Average Loan Portfolio Minimized
P5. Accum. Charge-offs Recovered / Accum. Charge-offs > 75%
P6. Solvency (Net Value of Assets/Total Shares & Deposits) ≥ 111%
3.3a PEARLS: Protection
P1. Loan Losses Allowances / Delinquent Loans >12 Months.
◦ Purpose: To measure the adequacy of the provisions for loan losses when compared to all delinquent loans over 12 months .
◦ Items Required: A-Allowance for Loan Loss (Balance Sheet); B- Percentage of Allowance Required to cover delinquent Loans > 12 months and C – Loan Balances of all delinquent loans > 12 months.
◦ Formula : (A)/(B*C).
3.3a.1 Key PEARLS Protection Ratios
P6. Solvency Ratio.
◦ Purpose: To measure the degree of protection that credit union has for members’ deposits and share savings in the event of liquidation.
◦ Items Required: A- Total Assets; B- Allowance for Risk Assets; C –Balance of Delinquent Loans >12 mnths; D- Balance of Delinquent Loans <12 mnths; E – Total Liabilities; F – Problem Assets (losses to liquidate); G –Total Deposit Savings; H – Total Shares
Formula: – [(A+B)-(C+.035(D)+E+F-G]/(G+H)
3.3a.2 Key PEARLS Protection Ratios
E - Effective Financial Structure Goals (Excellence)
E1. Net Loans / Total Assets 70-80%E2. Liquid Investments / Total Assets ≤ 16%
E3. Financial Investments / Total Assets ≤ 2%
E4. Non-financial Investments / Total Assets 0%
E5. Savings Deposits / Total Assets 70-80%E6. External Credit / Total Assets 0-5%
E7. Member Share Capital / Total Assets ≤ 20%
E8. Institutional Capital / Total Assets ≥ 10%
E9. Net Institutional Capital / Total Assets ≥ 10%
3.3b PEARLS :Effective Financial Structure
E1. Net Loans / Total Assets
◦ Purpose: To measure the percentage of total assets that are invested in the loan portfolio, or to ascertain what percentage of assets the members have borrowed.
◦ Items Required: A – Total Gross Loan Portfolio Outstanding); B-
Total Loan Loss Allowances; C – Total Assets.
◦ Formula : (A - B)/(C).
3.3b.1 Key Effective Financial Structure Ratios
E5. Saving Deposits/ Total Assets
◦ Purpose: To measure the percentage of total assets financed by savings deposits.
◦ Items Required: A – Total Saving Deposits; B – Total Assets.
◦ Formula : (A )/(B).
3.3b.2 Key Effective Financial Structure Ratios
E9. Net Institutional Capital */ Total Assets
◦ Purpose: To measure the real level of institutional capital, after adjusting the allowances for risk assets to meet the standards of P1&P2, and covering any other potential losses.
◦ Items Required: Items Required: A- Total Assets; B- Allowance
for Risk Assets; C– Balance of Delinquent Loans >12 mnths; D- Balance of Delinquent Loans <12 mnths; E- Problem Assets (losses to liquidate); F – Total Assets;
◦ Formula : [(A+B ) – (C + 0.35(D) +E)]/(F).
*Institutional Capital comprise all legal and non-distributable reserves, non-withdrawable members’ share capital; capital donations and non-distributable reserves (from surplus).
3.3b.3 Key ‘Effective Financial Structure’ Ratios
A - Asset Quality Goals (Excellence)
A1. Total Loan Delinquency / Gross Loan Portfolio ≤ 5%
A2. Non-earning Assets / Total Assets ≤ 5%
A3. Net Zero Cost Funds / Non-earning Assets ≥ 200%
3.3c PEARLS: Asset Quality
A1. Total Loan Delinquency / Gross Loan Portfolio
◦ Purpose: To measure the total percentage of delinquency in the loan portfolio, using the criterion of outstanding delinquent loan balances instead of accumulated delinquent loan payments.
◦ Items Required: Items Required: A- Total Loan Delinquent
Balances; B – Total Gross Loan Portfolio;
◦ Formula : (A)/(B).
3.3c.1 Key PEARLS Asset Quality Ratios
A2. Non-Earning Assets* / Total Assets
◦ Purpose: To measure the percentage of the total assets that are not producing income.
◦ Items Required: Items Required: A- Total Non-Earning Assets; B –
Total Assets;
◦ Formula : (A)/(B).
*Examples of Non-Earning assets include Cash on hand and floats, non -interest bearing current accounts, accounts receivable, fixed assets and prepaid expenses, assets in liquidation.
3.3c.2 Key PEARLS Asset Quality Ratios
R - Rates of Return and Costs Goals (Excellence)
R1. Net Loan Income / Average Net Loan Portfolio Entrepreneurial Rate
R2. Liquid Inv. Income / Avg. Liquid Investments Market Rates
R3. Fin. Investment Income / Avg. Fin. Investments Market Rates
R4. Non-fin. Inv. Income / Avg. Non-fin. Investments ≥ R1
R5. Fin. Costs: Savings Deposits / Avg. Savings Deposits
Market Rates > Inflation
R6. Fin. Costs: External Credit / Avg. External Credit Market Rates
3.3d PEARLS : Returns and Costs
R - Rates of Return and Costs Goals (Excellence)
R7. Fin. Costs: Member Shares / Avg. Member Shares Market Rates, > R5
R8. Gross Margin / Average Assets ˆE9=10%
R9. Operating Expenses / Average Assets ≤ 5%
R10. Provisions for Risk Assets / Average Assets ˆP1=100%, ˆP2=35%
R11. Other Income or Expense / Average Assets Minimized
R12. Net Income / Average Assets (ROA) ˆE9=10%
3.3d PEARLS :Returns and Costs (Cont’d)
R9. Operating Expenses / Average Assets
◦ Purpose: To measure the cost associated with the management of all the Credit Union assets. This metric is an indicator of the degree of operational efficiency or inefficiency.
◦ Items Required: A- Total Operating Expenses (exclusive of
Provisions for loan losses); B- Total Assets of Current year-end; C-Total Assets as of Last year-end.
◦ Formula : (A)/[(B+C)/2].
3.3d.1 Key PEARLS Return and
Cost Ratios
R12. Net Income / Average Assets (ROA)
◦ Purpose: To measure the adequacy of earnings and also, the capacity to build Institutional Capital.
◦ Items Required: A- Net Income (After dividends); B- Total Assets
of current year-end; C-Total Assets as of last year-end.
◦ Formula : (A)/[(B+C)/2].
3.3d.2 Key PEARLS Return and
Cost Ratios
Liquidity Goals (Excellence)
1. Liquid Assets - ST Payables / Total Deposits 15-20%
2. Liquidity Reserves / Total Savings Deposits 10%
3. Non-Earning Liquid Assets / Total Assets < 1%
3.3E PEARLS :Liquidity
L1. [Liquid Assets – Short-term Payables ]/ Total Deposits
◦ Purpose: To measure the adequacy of the liquid cash reserves to satisfy deposit withdrawal requests, after paying all immediate obligations <30 days.
◦ Items Required: A- Total Earning Liquid Investments; B-Total
Non-Earning Liquid Assets; C-Total Short-term Payables <30 days; D- Total Savings Deposits;
◦ Formula : (A + B -C)/(D).
3.3e.1 Key PEARLS Liquidity Ratio
Signs of Growth (Annualized Rates) Goals (Excellence)
1. Net Loans ˆE1=70-80%
2. Liquid Investments ˆE2 ≤ 16%
3. Financial Investments ˆE3 ≤ 2%4. Non-financial Investments ˆE4=0%
5. Savings Deposits ˆE5=70-80%
6. External Credit ˆE6=0-5%
7. Member Shares ˆE7 ≤ 20%
8. Institutional Capital ˆE8 ≥ 10%
9. Net Institutional Capital ˆE9 ≥ 10%
10. Membership ≥ 15%
11. Total Assets > Inflation + 10%
3.3g PEARLS :Signs of Growth
S11. Growth in Total Assets
◦ Purpose: To measure the year-to-date growth of Total Assets.
◦ Items Required: A- Total Current Assets; B-Total Assets as of the
Last year-end; ◦ ◦ Formula : [(A/B)-1]*100.
3.3e.1 Key PEARLS Total Asset Growth Ratio
PEARLS RATIO ACRONYM
COMMON GROUND
ACRONY
M
CAMELSRATIOS
P1. Loan loss allowances/ Delinq Loans> 12.
P6. Net Val. Assts/Total Shares & Deposits (Solvency)
Capital/Risk-Weighted Assets
E1. Net Loans / Total Assets.
E.9. Net Institutional Capital / Total Assets
Non-Perf. Loans/Total Gross Loans
A1. Total Loan Delinquency / Gross Loan Portfolio.
A2. Non-Earning Assets/Total Assets.
Return on Assets.
Return on Equity.
Operating Expenses/Total Assets
Net Income/ Average Total Assets (ROA)
Rating (1 -5)
Liquid Assets – Short- term Payables/Total Deposits
Liquid assets to total assets
Growth in Total Assets
??Net open position in foreign exchange to capital
Mapping PEARLS to CAMEL: Establishing Some Common Ground
E
P
A
R
L
S
C
A
M
E
L
S
4. Reporting Regime for Credit
Union Financial Indicators
PEARLS
CARTAC has developed a useful reporting regime that can help Credit Unions Regulators collect information from the sector.
The reporting forms have been deployed and adapted in various CARTAC member States, including OECS, Jamaica and Suriname.
4.0 Reporting Regime for Credit Unions
Form Number Main Contents
CU1 Assets and Liabilities
•CU1 – Supp A•CU1 – Supp B•CU1 – Supp C•CU1 – Supp D•CU1 – Supp E•CU1 – Supp F•CU1 – Supp G
•Deposits•Borrowing•Loans•Investments•Receivables and Payables•Interest Rates•Deposit &Loans by Interest Rate &Size.
CU2 Economic Activity
CU3 Income Statement
CU 4 Credit Quality
CU 5A General and Specific Reserves
CU 5B Reconciliation of Allowance for Loan Losses and Change in Equity
CU SUMMARY KEY PEARLS RATIO
4.1 Reporting Regime: EXCEL Work Sheet FORMS
SWITCH TO PROVIDE A VIEW OF THE REPORTING FORMS IN EXCEL (OECS EXAMPLE)
5.0 Application of PEARLS to a Caribbean Credit Union
COK SODALITY CO-OPERATIVE CREDIT UNION LIMITED
COK Credit Union 2013 2012ASSETS (J$’000s)
EARNING ASSETS 6,369,128.0 6,327,710.0 Loans to Members 4,600,561.0 4,125,625.0 Credit Card Advances 25,472.0 32,775.0 Loan Loss Allowance (-) 110,733.0 120,114.0 Liquid Assets 876,844.0 1,081,200.0 Financial Investments 976,984.0 1,208,224.0
NON-EARNING ASSETS 748,188.0 773,989.0 Liquid Assets 112,910.0 85,744.0
Property Plant and Equipment 231,043.0 256,272.0 Other Non-Earning Assets 404,235.0 431,973.0
TOTAL ASSETS 7117316.00 7101699.00
5.1a Balance Sheet :COK Credit Union
COK Credit Union 2013 2012
LIABILITIES (J$’000s)
Interest-Bearing Liabilities 6,594,477.0 6,556,733.0
Savings Deposits 4,062,005.0 4,045,737.0
Voluntary Shares 2,185,326.0 2,167,227.0
Deferred Shares 300,000.0 300,000.0
External Credits 47,146.0 43,769.0
Non-Interest Bearing Liabilities 185,117.0 216,065.0
Payables and Accruals 177,104.0 204,895.0
Other Non-interest Liabilities 8,013.0 11,170.0
Total Liabilities 6,779,594.0 6,772,798.0
5.1b Balance Sheet :COK Credit Union
COK Credit Union 2013 2012
TOTAL LIABILITIES & EQUITY (J$’000s)
TOTAL EQUITY 337,722.0 328,901.0
Permanent Shares 380,613.0 361,865.0
Non-Institutional Capital (609,086.0) (610,981.0)
Institutional Capital 462,466.0 462,466.0 Investment Revaluation Reserve 5,923.0 5,877.0
Loan Loss Reserve - -
Pension Reserve 97,806.0 109,674.0
TOTAL LIABILITIES AND EQUITY 7,117,316.0 7,101,699.0
5.1c Balance Sheet :COK Credit Union
COK Credit Union 2013 2012
NET INTEREST INCOME (J$’000s)
INTEREST INCOME 794,507 761,084
Loans to Members 648,885 564577
Investments and Deposits 145622 196507
INTEREST EXPENSE -210,890 -210,500
Members' Deposits (160,211.0) (196,241.0)
External Credits (50,679.0) (14,259.0)
NET INTEREST INCOME 583,617 550,584
Provisions for Loan Losses (51,363.0) (101,212.0)
Loans to Members (40,667.0) (91,324.0)
Interest Receivable 1,065.0 9,875.0
Other Assets (11,761.0) (19,763.0)
5.2a Income Statement: COK Credit Union
COK Credit Union 2013 2012Profit/Loss (J$’000s)
NET INTEREST INCOME (write-offs and Loan Loss Provisions) 532,254.0 449,372.0
NON-INTEREST INCOME/(EXPENSES) 266,782.0 228,916.0
GROSS MARGIN 799,036.0 678,288.0
Operating Expenses 793,845.0 804,325.0
Surplus/Deficit 5,191.0 (126,037.0)
Other Comprehensive Income/Loss (16,323.0) 7,509.0
Total Comprehensive Loss (11,132.0) (118,528.0)
5.2b Income Statement: COK Credit Union
5.3a Delinquent Loans: COK Credit Union
DELINQUENT LOANS 2013 (J$’000s)
Period OverdueNum in Arrears
Loans in Arrears
Provision (ratio) Loan Loss Provision
1-2 Months
3,500
298,151 0 0
2-3 Months
956 27,389
0.1
2,739
3-6 Months
665 45,811
0.3
13,743
6-12 Months
824 63,909
0.6
38,345
Between 1-12 Months
5,945
435,260
54,828
Over 12 Months
198 53,661
1.0
53,661
Total
6,143
488,921
1.0
108,489
5.3b Delinquent Loans: COK Credit Union
DELINQUENT LOANS 2012 (J$’000s)
Period OverdueNum in Arrears
Loans in Arrears
Provision (ratio) Loan Loss Provision
1-2 Months
2,764
236,874 0.0 0.0
2-3 Months
705 27,562 0.1
2,756
3-6 Months
712 63,566 0.3
19,070
6-12 Months
794 63,891 0.6
38,335
Between 1-12 Months
4,975
391,893
60,161
Over 12 Months
429 55,174 1.0
55,174
Total
5,404
447,067 1.0
115,335
5.4a PEARLS RATIOS: COK Credit Union
COK Credit Union
Benchmark 2013 2012
PEARLS RATIO PEARLS RATIO
PROTECTION
Provision for Loans Delinquent >12 months
100% 100.00% 100.00%
Provision for Loans Delinquent < 12 months
35% 12.60% 15.35%
EFFECTIVE FINANCIAL STRUCTURE
Net Loans/Average Total Assets 80% 63.08% 56.40%
Savings Deposits/Total Assets 80% 57.07% 56.97%
5.4b PEARLS RATIOS: COK Credit Union
COK Credit Union
Benchmark 2013 2012
ASSET QUALITY
Total Delinquency/Gross Loan Portfolio Max 5% 10.63% 10.84%
Non-Earning Assets/Total Assets Max 5% 10.51% 10.90%
RATES OF RETURN
Operating Expenses/Average Assets 5% 11.89% 12.74%
Net Income/Average Total Assets 2% 7.49% 6.32%LIQUIDITY
Liquid Assets – ST Payables/ Deposits Min 15% 20.01% 23.78%
SIGNS OF GROWTH
Growth in Total Assets Min 10% 0.22 -0.29
SWITCH TO PROVIDE A VIEW OF THE COK FINANCIALS IN EXCEL (IF TIME PERMITS).
5.5 PEARLS RATIOS: COK Credit Union
What Conclusions would you draw about COK given the PEARLS Ratios?
Discussion?
6.0 Database Development for Credit Unions: Often Neglected Area!
Building an Effective Database for Credit Union Requires:◦ Setting up a functional reporting regime.
◦ Mapping and Developing Workflows necessary to support information gathering, analysis and dissemination.
◦ Choosing an effective, affordable, flexible and scalable database system. Good Examples include:
Sungard’s FAME/MARKET MAP (Data Warehouse) http://financialsystems.sungard.com/solutions/market-data/market-map/
analytic-platform
Vizor (Newly available system specifically for financial sector regulators). http://vizorsoftware.com. http://www.youtube.com/watch?v=ksR3TgFbnaU (DEMO OF VIZOR)
6.1 Database Development for Credit Unions
SWITCH TO PROVIDE A VIEW FAME and VIZOR (IF TIME PERMITS).
Building an Effective Database for Credit Union Requires:
◦Building a reliable IT Platform.
◦Keeping current with IT innovations and database enhancements and that can impact the sector positively.
6.1 Database Development for Credit Unions
7.0 Imperatives for Enhanced Regulation of Credit Union Sector.
Organize Reporting Regime & Database System;
Invest in and Upgrade IT Resources;
Push for Infusion of Expertise in Finance, Accounting, Economics, Law and IT in Credit Union Regulatory Bodies;
Intensify Regional and International Collaboration on Credit Union Regulatory Matters;
7.1 Imperatives for Enhanced Regulation of Credit Union Sector
Pay Attention to Financial Stability Developments Globally.
Leverage assistance, where necessary and appropriate from CARTAC and other bodies.
7.1 Imperatives for Enhanced Regulation of Credit Union Sector (Cont’d)
END OF PRESENTATION