Transcript Development in Credit Information Industry

NHB Conference
Credit Activity and Risk Trends of Home Loan
Industry
Arun Thukral
Satish Pillai
Manish Jain
Satrajit Saha
21st April 2012
About CIBIL
CIBIL provides world class solutions and has become the risk
management partner for all lending institutions in India
Advanced
Analytical tools
Commercial
Database
CIBIL is
Established
First and only
credit bureau
2004
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• CIBIL Detect
• Personal Loan Score
• CIBIL Mortgage Check
• Bureau Credit
Characteristics
• Consumer Portfolio
review reports
2005
• Direct Consumer Access
• CIBIL TransUnion Score
• 0.6 million commercial
records
• 4 million consumer
records
• First central repository on
Fraud and Mortgage
• CIBIL Watchlist
• CIBIL Custom Solutions
2007
2009
CIBIL is the leading CIC in India
Accelerates
solution
offerings
Shareholders of CIBIL
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Expanding CIBIL Membership
CIBIL strengthened its membership to 766 members
Including 312 NBFCs, 266 Cooperative Banks & 32 Rural Banks
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Database Snapshot
Vast database of nearly 212 million records
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Strong database of over 10.2 million records
Mortgage Check
• Repository Size: 90 Lakh Records
• Contributors: Leading Private Banks, Public Banks, Housing Finance
Companies, Foreign Banks, NBFCs
• Coverage: Pan India – Covering more than 450 cities
• Property Type: Flats, Independent Houses, Plot, Office
• Customer Segment – Individual & Commercial
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Understanding the changing landscape of Home Loans
How has the credit enquiry mix changed over time?
How have the enquiries & acquisitions for Home Loans changed over time?
Which regions have driven this change?
How has the Home Loan Acquisition quality changed over time?
How did the Home Loans perform?
What type of loans do customers take after taking a Home Loan?
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How has the enquiry mix changed in last 3 years?
INQUIRIES OVER TIME
Credit Cards
Personal Loans
Auto Loans
Two-Wheeler Loans
Home Loans
100%
Decrease in
Contribution of
Home Loan Inquiries
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Unsecured Loan Inquiries down to
41% from 60% in Q1 2009
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Q1 11
Q2 11
Q3 11
Q4 11
Let’s look at the home loan enquiries
10,00,000
Home Loan Inquiries at
All Time High, Stable in
recent 2 Quarters
9,00,000
8,00,000
7,00,000
6,00,000
5,00,000
4,00,000
3,00,000
2,00,000
1,00,000
0
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
Q211
Q311
Q411
Home Loan Inquiries have been increasing since Q1-2009
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Lets look at the Geographical View
Home Loan Enquiries - 2009
2.12 MM
Legend
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Ranges
(Inquiries Done)
Color
Very Low
Red
Low
OrangeRed
Medium
Orange
High
Yellow
Home loan enquiries
Geographical view - 2010
REGIONS SHOWING
HIGH CREDIT NEED
2.96 MM
Legend
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Ranges
(Inquiries Done)
Color
Very Low
Red
Low
OrangeRed
Medium
Orange
High
Yellow
Home loan enquiries
Geographical view - 2011
REGIONS SHOWING
INCREASE IN CREDIT
NEED
3.51 MM
Legend
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Ranges
(Inquiries Done)
Color
Very Low
Red
Low
OrangeRed
Medium
Orange
High
Yellow
How was the product acquisition mix in last 3 years?
ACQUISITIONS OVER TIME
Credit Cards
Personal Loans
Auto Loans
Two-Wheeler Loans
Home Loans
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Unsecured Loan Acquisitions down
to 48% from 55% in Q1 2009
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Q1 11
Q2 11
Q3 11
Q4 11
What is the home loan acquisition trend?
HOME LOAN ACQUISITIONS OVER TIME
4,50,000
4,00,000
3,50,000
3,00,000
2,50,000
2,00,000
1,50,000
1,00,000
50,000
0
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
Q211
Q311
Q411
Home Loan Acquisitions increased in 2009-2010, New Loans
Booked decreasing since Q1 2011
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Geographical view of home loan acquisitions
Home loan acquisitions – 2009
1.06 MM
Legend
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Ranges
(Inquiries Done)
Color
Very Low
Red
Low
OrangeRed
Medium
Orange
High
Yellow
Home Loan Acquisitions
Geographical view – 2010
REGIONS SHOWING
INCREASED CREDIT
CONSUMPTION
1.51 MM
Legend
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Ranges
(Inquiries Done)
Color
Very Low
Red
Low
OrangeRed
Medium
Orange
High
Yellow
Home Loan Acquisitions
Geographical view – 2011
REGIONS WHERE
ACQUISITIONS
DECREASED
1.16 MM
Legend
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Ranges
(Inquiries Done)
Color
Very Low
Red
Low
OrangeRed
Medium
Orange
High
Yellow
How has the Acquisition Quality changed over
time?
70%
1Q2008
2Q2008
3Q2008
4Q2008
2Q2009
4Q2009
2Q2010
4Q2010
60%
Percentage Population
50%
40%
30%
20%
10%
0%
<650
650-699
700-749
CIBIL TransUnion Score Band
750-799
More customers in higher score bands indicating better
acquisition quality
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2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION
>=800
2Q2011
How did the home loans perform?
FRAMEWORK
Q12009
Q12010
Performance in 12 Months
(Ever 90+)
New Home Loan Opened
(Acquisition Vintage)
2.00%
1.71%
1.47%
1.50%
1.10%
0.99%
1.00%
0.96%
0.76%
0.79%
0.62%
0.50%
0.00%
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Quarters of Acquisition
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Q2 2010
Q3 2010
Q4 2010
Vintage
Delinquency
continues to drop
A deeper look at credit granted – what percentage of
consumers have opened their first loan after 2007?
NUMBER OF CONSUMERS WHO WERE
EVER GRANTED CREDIT
105 million
FIRST ACCOUNT OPENED
BEFORE 2007
FIRST ACCOUNT OPENED
AFTER 2007
64 million
61%
41 million
39%
DIDN’T OPEN ANY
ACCOUNTS AFTER 2007
54 million
84%
OPENED AN ACCOUNT
AFTER 2007
10 million
16%
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CREDIT
DORMANT
CONSUMERS
HOW HAS THE
CREDIT SEEKING
BEHAVIOR OF
THESE CONSUMERS
CHANGED?
How has the leverage of these consumers
increased over time?
PERIOD WHEN
CONSUMER
OPENED THEIR
FIRST LOAN
NEXT ACCOUNT
OPENED
BETWEEN 7 TO 12
MONTHS
NEXT ACCOUNT
OPENED
WITHIN 6 MONTHS
L
NO ACCOUNTS
OPENED
IN 18 MONTHS
8.2%
5.1%
78.2%
6.5%
5.8%
5.3%
82.4%
6.6%
8.0%
7.3%
78.0%
8.6%
10.4%
8.8%
72.2%
8.5%
H1 2007
NEXT ACCOUNT
OPENED
BETWEEN 13 TO 18
MONTHS
5 MM
16.7%
1MM
H1 2008
4 MM
H1 2009
3 MM
L
H1 2010
4 MM
19%
0.7MM
L
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CHANGE IN CUSTOMER BURDEN POST ACQUISITION
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Consumers who opened their second loan with another FI
WHAT TYPE OF LOAN THEY TAKE NEXT?
WHERE FIRST LOAN WAS A HOME LOAN
PERIOD WHEN
CONSUMER
OPENED THEIR
FIRST LOAN
Credit
Card
Personal
Loan
Home
Loan
H1 2007
31.8%
13.9%
21.9%
H1 2008
28.1%
11.0%
H1 2009
16.4%
H1 2010
21.0%
TwoWheeler
Others
6.9%
5.8%
19.8%
29.4%
7.6%
4.7%
19.2%
12.9%
34.5%
13.2%
4.4%
18.7%
7.7%
41.7%
10.8%
4.6%
14.2%
O
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Auto
Loan
O
O
OPPORTUNITY TO DEEPEN RELATIOSHIP
O
ARE THESE UNSECURED LOANS OPPORTUNITY FOR TOP UP OR FURNISHING LOANS
© 2012 ALL RIGHTS RESERVED | CONFIDENTIAL INFORMATION
Summary
• Enquiry mix tilted towards secured loans
• Home loans enquiries at all time high and stable for last two quarters
• Home loan companies seeing increased activity in new regions while
continuing to see high level of credit activity in the traditional markets
• Home loan acquisitions peaked in 2010, a downward trend seen since
last couple of quarters
• Acquisition quality at all time high with large no. of customers above
800 CIBIL TransUnion score.
• Loans acquired in last two years are performing much better
• Almost 20% first time customers take another loan within 12 months
• More than 65% first time home loan customers who opened a second
loan within 12 months tend to take another home loan or unsecured
loan from another FI
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CIBIL TransUnion Products and Capabilities
Acquisition
Account Management
Bureau
Data
Collections
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Cross Sell
Thank You
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