Indirect Loan analysis by HACKERS

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Indirect Loan analysis by HACKERS

• Leon Savvas
• Michael Theriot
• Dasha Priklonskaya
• Date May 2, 2000

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30 day Delinquency Distribution in
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Relative 30 Day Delinquency
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60 day Delinquency Distribution in
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Relative 60 Day Delinquency
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90 day Delinquency Distribution in
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Relative 90 Day Delinquency
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Bottom Line

• B tier is clearly the most delinquent
• At least 60 of 30, 60, and 90 day delinquency
  comes from the B customers
• At least 60 of delinquency for B customers is
  a 30 day delinquency
• On the delinquency graphs B curve is always
  higher than A curve

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New Loan Origination
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Prepayment
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Profit
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Cumulative Charge-offs
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Bottom Line

• At least 60 of New Loan Origination, Prepayment
  and Profit come form A customers
• Both A and B customers tend to pay off their
  loans. However, most of the charge off volume
  come from the B customers. Asymptotically B
  customers charge offs are 3 times higher than A
  customers charge offs

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Charge-offs
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Bottom Line

• B and A customers have a similar charge off
  pattern, but on different scales
• B customers have greater charge off rate than A
  customers

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Conclusion

• Most of the delinquency and charge off volume can
  be explained by A and B customers
• A and B have similar patterns. However,
  numerically B always underperforms A
• Need to review B tier policies
• B tier has good Cash Flows
• B tier is less reliable