Credit Risk Management: A Case Study on Maybank Automobile Financial Services

A non performing loan is a loan which is either in default or is about to be, with a reasonable expectation that the loan will enter default even though it has not technically defaulted yet. As a general rule, banks prefer to avoid non performing loan because there is a risk mainly credit risk that...

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Main Author:	Bentan, Ghazalli
Format:	Thesis
Language:	eng eng
Published:	2011
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/2634/1/Bentan_Ghazalli.pdf https://etd.uum.edu.my/2634/2/1.Bentan_Ghazalli.pdf
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id	my-uum-etd.2634
record_format	uketd_dc
spelling	my-uum-etd.26342022-04-13T00:45:01Z Credit Risk Management: A Case Study on Maybank Automobile Financial Services 2011-02-17 Bentan, Ghazalli Ahmad, Nor Hayati College of Business (COB) College of Business HG Finance A non performing loan is a loan which is either in default or is about to be, with a reasonable expectation that the loan will enter default even though it has not technically defaulted yet. As a general rule, banks prefer to avoid non performing loan because there is a risk mainly credit risk that they will not be able to recover the principal left on the loan, let alone the interest which has accrued. In hire purchase, the facility is 'fragile' in nature due to its extensive exposure to credit risk issues such as weak income gross level, weak net disposable income, high financing margin, financing of non popular model, high risk job sector, high risk business sector and fraudulent transactions. This dissertation is a case study on Maybank Automobile Financial Services non-performing loans problems. From the case study we find some essential factors that contributed to the increasing default trend over the study period. The existence and implementation of Standard Practice Instruction (SPI), Credit Policy and Guidelines from relevant authority sometimes were 'ignored' by staff or branches due to branches' robust business appetite to secure larger market share in vehicle financing. The issue is also due to information asymmetry leading to incomplete documentation and lack of information. This has worsened the credit risk and operational risk situation. The study traces strategies taken to manage the high non performing loan rate and identifies more effective approaches taken by the bank to address the risks involved. The case study reveals that it is of utmost importance to adopt a strong credit risk management culture through the practice of continuous, comprehensive and integrated approach in order to uphold high standard of credit underwriting. 2011-02 Thesis https://etd.uum.edu.my/2634/ https://etd.uum.edu.my/2634/1/Bentan_Ghazalli.pdf text eng public https://etd.uum.edu.my/2634/2/1.Bentan_Ghazalli.pdf text eng public masters masters Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Ahmad, Nor Hayati
topic	HG Finance
spellingShingle	HG Finance Bentan, Ghazalli Credit Risk Management: A Case Study on Maybank Automobile Financial Services
description	A non performing loan is a loan which is either in default or is about to be, with a reasonable expectation that the loan will enter default even though it has not technically defaulted yet. As a general rule, banks prefer to avoid non performing loan because there is a risk mainly credit risk that they will not be able to recover the principal left on the loan, let alone the interest which has accrued. In hire purchase, the facility is 'fragile' in nature due to its extensive exposure to credit risk issues such as weak income gross level, weak net disposable income, high financing margin, financing of non popular model, high risk job sector, high risk business sector and fraudulent transactions. This dissertation is a case study on Maybank Automobile Financial Services non-performing loans problems. From the case study we find some essential factors that contributed to the increasing default trend over the study period. The existence and implementation of Standard Practice Instruction (SPI), Credit Policy and Guidelines from relevant authority sometimes were 'ignored' by staff or branches due to branches' robust business appetite to secure larger market share in vehicle financing. The issue is also due to information asymmetry leading to incomplete documentation and lack of information. This has worsened the credit risk and operational risk situation. The study traces strategies taken to manage the high non performing loan rate and identifies more effective approaches taken by the bank to address the risks involved. The case study reveals that it is of utmost importance to adopt a strong credit risk management culture through the practice of continuous, comprehensive and integrated approach in order to uphold high standard of credit underwriting.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Bentan, Ghazalli
author_facet	Bentan, Ghazalli
author_sort	Bentan, Ghazalli
title	Credit Risk Management: A Case Study on Maybank Automobile Financial Services
title_short	Credit Risk Management: A Case Study on Maybank Automobile Financial Services
title_full	Credit Risk Management: A Case Study on Maybank Automobile Financial Services
title_fullStr	Credit Risk Management: A Case Study on Maybank Automobile Financial Services
title_full_unstemmed	Credit Risk Management: A Case Study on Maybank Automobile Financial Services
title_sort	credit risk management: a case study on maybank automobile financial services
granting_institution	Universiti Utara Malaysia
granting_department	College of Business (COB)
publishDate	2011
url	https://etd.uum.edu.my/2634/1/Bentan_Ghazalli.pdf https://etd.uum.edu.my/2634/2/1.Bentan_Ghazalli.pdf
_version_	1747827392816087040

Credit Risk Management: A Case Study on Maybank Automobile Financial Services

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