THE MASTER DEGREE WORK: “The bank credit management policy” (on the example of the joint stock company “ОТP Bank”) Student : Lanna A. B-09 Scientific supervisor: S.A. Kuznetsova, Doctor of Economics, Full Professor, Head of the International Finance and Banking Department

CONTENT Chapter 1. Theoretical aspects of the bank credit management policy 1.1. Credit management policy essence 1.2. Credit policy formation: national and foreign experience 1.3. Credit bank policy evaluation in Ukraine Chapter 2. Performance analysis of the credit management policy of the OTP Bank JSC 2.1. Organizational structure of OTP Bank JSC 2.2. Credit policy performance evaluation of the OTP Bank JSC 2.3. Detailed credit portfolio evaluation analysis of OTP Bank JSC Chapter 3. Ways of the credit management policy improvements for the OTP Bank JSC 3.1. Ways to improve credit process to reduce risks of the OTP Bank JSC 3.2. Market credit value calculation for the OTP Bank JSC 3.3. Problem credits optimization in the OTP Bank JSC Chapter 4. The crisis management policy for the OTP Bank JSC 4.1. Safety rules in the OTP Bank JSC 4.2. Crisis management in the OTP Bank JSC

The purpose the given diploma work is to study the development prospects and improve the bank credit policy in Ukraine Tasks : - To examine the nature of credit policy of commercial banks; - To define the stages of the credit policy of commercial banks; - To analyze the bank performance; - To develop the ways of improving the bank credit policy management; The Object of the investigation is the credit policy of commercial banks The Subject of the investigation – is the management of commercial bank credit policy Research base – OTP Bank JSC

Credit policy as the strategy and tactics of the bank to attract and distribute financial resources for the customers crediting needs

Fig 1. The bank crediting dynamics for corporate and consumer credits in 2009-2013 years (mln.grn)

CREDIT POLICY PRIORITIES : quality crediting profitability credit portfolio growth justification

Fig 2. Debt category credit volume in OTP Bank JSC in 2012

Fig 3. Loans for the clients of the OTP Bank JSC (thousand grn.)

Fig 4. Credit structure by the type of economic activity

The comparative analysis of the bank crediting operations showed some drawbacks: 1. Insufficient credit diversification 2. Risky crediting policy 3. Inadequate control of the credit facilities to indicate problems and loses 4. Low level of loan security

Table 1. Ways of improving consumer and corporate crediting ACTION RESULTS RISKS New corporate credit products introduction Individual evaluation approach for the borrower including financial performance, production volume and reputation Lack of the regular solvent clients New consumer credit products introduction Developing the favourable conditions for the crediting of the most vulnerable clients using benefit credit facilities Credit non-payment Start-up crediting program creation Detailed business project evaluation taking into account all risks, return on investments and profitability of the business entity crediting Lack of the effective projects

ACTION RESULTS RISKS Marketing policy improvement Table 1 Ways of improving consumer and corporate crediting (Continued) ACTION RESULTS RISKS Marketing policy improvement Holding regular promotional events including mass media , Internet, providing additional information on the bank receipts Non-coverage of all events expenses Financial rate system expansion Selection and developing financial rates for the complex analysis of the future borrower including financial indicators and other aspects Lack of the clients meeting all evaluation requirements Debt collection Іndividual approach for the debt collection cases and process optimization Non-realization of pledged property

Find additional possibilities to receive debt payments AN ACTION PLAN TO IMPROVE THE CORPORATE CREDIT QUALITY Loan package control Control all account receipt of the borrower daily and in case of the lack of receipt to the current account ask for the reason explanation Provide the detailed analysis of the credit security and make conclusions Collect the full information about the risky aspects of the given borrower Fig 5. An action plan to improve the credit quality

AN ACTION PLAN OF THE DEBT COLLECTION FOR THE BANK 1 . Actions resulting in the financial organizational assistance of the bank to the problem borrower, helping to overcome the crisis and fulfill the obligations: - Debt restructuring program - Problem – solving and decision making - Acting on behalf of the bank - Credit expansion - Equity capital increase - Additional legal support 2 . Actions resulting in credit returns in the shortest terms: - Credit security - Debt transfer to the 3 rd party - Turning to guarantees - Legal actions - Bankruptcy procedure

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