Note 11d (page 50 UDC for 2015 prospectus (No.69)) lists the internal risk grading of the loan assets on a scale of 0 to 9. On this scale 0 is the lowest risk while 9 means a default.
|
UDC Vulnerable Loans |
|
Judgement |
Total |
|
Grade 6+ |
|
2012 |
$975.744m +$80.745m +$55.403m |
$1,111.892m |
2013 |
$1,157.111m +$83.790m +$24.814m |
$1,265.715m |
2014 |
$811.700m +$92.366m +$34.883m |
$938.949m |
2015 |
$904.338m +$81.156m +$32.640m |
$1,018.134m |
The grade 6 and below categories for EOY2015 added up represents a fraction of the total loans outstanding as follows:
$1,018,134m / $2,461.224m = 41.4% of total loan assets.
Credit impairment is noted as $31.529m (note 11d)
========
For comparative purposes it is interesting to see what happens when we take the same statistics for Heartland bank. The situation is not strictly comparable because Heartland has a different credit risk system for so called 'Behavioral Loans'. Behavioral loans consist of consumer and retail receivables usually relating to the financing of a single asset.
OTOH 'Judgement Loans' are graded on the 1-9 system. Grade 1 represents a 'Very Strong' loan. Grade 9 represents a loan 'At Risk of Loss'. Grade 6 represents a loan that should be monitored. A 'Judgement loan' within Heartland consists mainly of business and rural lending, including non-core property, where an ongoing and detailed working relationship has been developed.
The grade 6 and below categories of 'Judgement Loans' plus the equivalently vulnerable 'Behavioural Loans' sum up to a total amount of Heartland Vulnerable Loans'. represent a fraction of the total loans outstanding as follows:
$149,011m / $2,878,513m = 5.18% of total loan assets.
Some impairment ($10,201m) (Note 18b) has already been taken onto the book over the years. Add to this a reverse mortgage fair value adjustment of ($6.242m) This total impairment of $16.433m represents
$16.433m / $126.382m = 13.0% of the Grade 6 (monitor) and below grade assets.
|
|
Heartland Vulnerable Loans |
|
Behavioural |
|
|
Judgement |
Total |
|
Arrangement |
Non Performing Repossession |
Recovery |
Grade 6+ |
|
2012 |
$13.750m |
$4.386m |
$2.740m |
$185.315m +$53.360m +$14.036m +$13.741m |
$287.118m |
2013 |
$8.416m |
$2.226m |
$1.936m |
$198.370m +$18.034m +$21.518m +$27.761m |
$278.051m |
2014 |
$7.571m |
$2.113m |
$2.113m |
$165.776m +$14.833m +$13.520m +$3.412m |
$159.338m |
2015 |
$15.855m |
$3.087m |
$3.687m |
$99.849m +$14.937m +$4.514m +$7.082m |
$149.011m |
A summarized comparative table between UDC (Year ending 30th September) and Heartland (Year ending 30th June) is below:
|
UDC |
|
|
|
|
Heartland |
|
|
|
Impaired Loans (A) |
Grade 6+ Loans [total Vulnerable](B) |
(A)/(B) |
Total Loans (C) |
(A)/(C) |
Impaired Loans (A) |
Total Vulnerable Loans (B) |
(A)/(B) |
Total Loans (C) |
(A)/(C) |
2012 |
$38.481m |
$1,111.892m |
3.46% |
$2,141,780m |
1.79% |
$8.032m |
$287.118m |
2.80% |
$2,086.303m |
0.785% |
2013 |
$37.460m |
$1,265.765m |
2.95% |
$2,198,653m |
1.70% |
$15.961m |
$278.051m |
5.74% |
$2,026.337m |
0.788% |
2014 |
$31.805m |
$938,899m |
3.38% |
$2,375.936m |
1.34% |
$14.999m |
$159.338m |
9.41% |
$2,622,392m |
0.571% |
2015 |
$31.529m |
$1,018,134m |
3.10% |
$2,461.224m |
1.28% |
$16.433m |
$149.011m |
11.0% |
$2,878,513m |
0.571% |