20120220 Banking SWOT Analysis v2

8/2/2019 20120220 Banking SWOT Analysis v2

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SWOT AnalysisBase on Improve Loan Approval Process

Group: TTTM - Feb 2012

MGMG694 CP Banking Management



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ObjectiveObjective

To Develop loan approval process to be more effective and cover

to SME loan from related agriculture business.

Effective mean:

1. Process time is comparable to the competitors (1 month for agriculture loan and 15

days for SME)

2. Approval criteria must focus in both collateral and business feasibility (reduce NPL and

support opportunity for SME loan)

3. Credit Analyst or Officer must have at least basic financial knowledge as well as the

market/business environment data should be available to used at all time



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SWOTSWOT -- AnalysisAnalysis

STRENGTHSTRENGTH

OPPORTUNITYOPPORTUNITY

WEAKNESSWEAKNESS

THREATTHREAT

1. Computer structure in the system

2. Agriculture database

3. Customer relationship.

4. Knowledge in agriculture

1. Knowledge and experience.

2. Resistance in change from age.

3. Many approval level require when change

4. Online application.

5. Using Outsource

6. Insufficient officer

7. High NPL

1. ASEAN Economic Community (AEC)

2. Knowledge exchange

3. New technology

4. Credit bureau system

1. Abnormal situation such as disaster, protest,

revolution, etc

2. Hacker

3. Change in Government cabinet



1. BAAC already applied computer structure into the loan approval

system. From the BAAC website, BAAC invest in 3 core system to

develop their service which are:

Financial Management Information Systems (FMIS) - is installed

for timely, relevant and accurate information to support betterbusiness decisions

Core Banking System (CBS) to manages financial transactions

Data Warehouse to keep customer information

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StrengthStrength Computer StructureComputer Structure

Source: www.baac.or.th/content-about.php?content_group_sub=17



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StrengthStrength Agriculture databaseAgriculture database

Source: BAAC 2010 Annual report page 129

2. BAAC already have large agriculture database as their client which will

useful to improve the loan approval process especially when they change

to SME business



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StrengthStrength Customer RelationshipCustomer Relationship

BRANCHES

BAAC 1131

SCB 1096

KTB 1024

BBL 981

KBANK 833

BAY 587

TMB 459

3. BAAC maintains the good relationship with their customer (client) for a

long time as their concept of Service at Door Step. So, it will be more

easier to collect additional data (when required). Moreover, BAAC have

many branches around the country which can be the information

channel.



Slide - 7

StrengthStrength -- Knowledge in agricultureKnowledge in agriculture

4. Many of BAAC officer has background on agriculture degrees. So, it will

help officer to valuate the SME project which result in faster approve.

The BAACs mission was to extend credit more widely, directly to

individual farmers as well as through farmer institutions.



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WeaknessWeakness



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WeaknessWeakness



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WeaknessWeakness



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WeaknessWeakness



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WeaknessWeakness



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WeaknessWeakness



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WeaknessWeakness



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OpportunityOpportunity -- AECAEC

1. Thailand prepare to join ASEAN Economic Community (AEC) in 2015.

Due to mutually agreement of each member able to hire and rotate

skilled worker from other countries to fulfill their lack.

Source: www.thaifta.com/thaifta/Home/tabid/36/ItemId/4374/ctl/Details/Mid/582/Default.aspx



The Agricultural Promotion Bank (APB) of Laos signed a

memorandum of understanding on mutual cooperation with the

Bank for Agriculture and Agricultural Cooperatives (BAAC) of

Thailand in Vientiane. The two banks began cooperating in 1997,

exchanging experiences in human resources development and staff

upgrading. The banks decided to enlarge their cooperation due to

their similar responsibilities, financial business operations, and

customer bases.

EC-FAO Food Security Programme & Dailynews 3 Dec 2011Source: http://foodsecuritylink.net/laopdr/index.php?option=com_k2&view

=item &id=269:lao-thai-agricultural-banks-extend-cooperation&Itemid=36

http://www.dailynews.co.th/article/223/1437

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OpportunityOpportunity -- Knowledge exchangeKnowledge exchange

2. BAAC have support by Thailand government. So, it will have

opportunities to exchange the technology/knowledge among country

According to (Asia Pacific Rural and Agricultural Credit Association :

APRACA Co-operate and fulfill strength to each others for

sustainable development

Agricultural Promotion Bank Source: http://apb.com.la/index_en.php



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OpportunityOpportunity -- New technologyNew technology

3. As the technology keep development. So, the new technology (tools)

for support and enhance the loan approval process are update all the

time.

The benefit of using new technology can be in form of:

Faster & More Secure

Convenience & paperless

Double checking and able to track back the historical trail.

RSA Offers New Security Tokens for Online Banking.

The latest in EMCs RSA security includes hardware

tokens and software tokens to suit mobile banking

customers.

Bank System&Technology Source: http://www.banktech.com/risk-

management/209400667



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OpportunityOpportunity -- Credit bureau systemCredit bureau system

Source: www.ncb.co.th/

4. Establish the alliance with National Credit Bureau.

Enhance the useful database of credit bureau to mapping with BAACs

client ( Especially in group of agriculturist) In order to reduce the time

to manage and process the loan approval.



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ThreatThreat Abnormal situationAbnormal situation

1. Abnormal situation such as flood, earth quack, protest, revolution

may effect to loan approval process when some branch need to

closed during the event.

Thirteen commercial banks, two retail

banks and a financial firm reported that they

had now temporarily closed a total of 620

branches in flood-stricken provinces, theBank of Thailand said Monday.

Of the total, 333 outlets are in Bangkok, 149

in Pathum Thani, 68 in Nonthaburi, 31 in

Nakhon Pathom, 22 in Ayutthaya, 11 in

Samut Sakhon, five in Nakhon Sawan and

one in Chai Nat.

Bangkok Post 7 Nov 2011

Source:www.bangkokpost.com/business/news/265136/m

ore-bank-branches-atms-closed

After two months of protests that ended in an arson spree,

Thailand is counting the economic cost and financial toll of a crisis.

The country's second-largest lender, Krung Thai Bank KTB.BK, said

39 properties had suffered fire damage, including many bankbranches. Markets and banks were closed on Thursday.

Reuters 20 May 2010Source: www.reuters.com/article/2010/05/20/thailand-business-

idUSSGE64J0F520100520

Prime Minister said the government is looking for 2 million rai of

land to use as areas to hold flood water - given the likelihood that

wet-season flooding this year could be as severe as last year.

"I am confident that if the measures can be implemented as

planned, the flood problems will be less serious than last year."

Yingluck said

The Nation 12 Feb 2012Source: www.nationmultimedia.com/national/Govt-seeks-2-million-rai-to-

hold-flood-water-30175684.html



Slide - 20

ThreatThreat HackerHacker

2. Hacker, they can hack into the system and make the system down for

several day which effect directly to the loan approval process

Police have arrested a 23-year-old hacker who allegedly stole

more than 500,000 baht from internet bankers. Officers from the

Technology Crime Suppression Division (TCSD) arrested Akaphan

Gummanoi at a house in Soi Maiyalap on Rarm Intra Road late on

Friday night for allegedly robbing Siam Commercial Bank accounts.Police confiscated two computers from the house.

Bangkok Post 24 July 2011Source: www.bangkokpost.com/news/local/248490/suspected-internet-

bank-hacker-held

Hackers have stolen data from thousands of Citibank customers in

the US, the bank has confirmed. The breach exposed the names of

customers, account numbers and contact information, the banksaid in a statement. Citigroup is the latest in a string of high profile

companies to be targeted by cyber criminals.

BBC 9 June 2011Source: www.bbc.co.uk/news/technology-13711528



Slide - 21

ThreatThreat Government CabinetGovernment Cabinet

3. As the data in the annual report stated that the chairman of BAAC is the

ministry of Finance. So, in term of any change in cabinet may have effect to

BAAC policy and plan.

The data from annual report show that chairman has been change for

more than 6 times during 2007 2012 (especially in 2008 that 3 times)

Under the Section 14 of BAAC Act B.E.

2509 (1966) amended in BAAC Act (Fifth

Amendment) B.E. 2542 (1999) and (Sixth

Amendment) B.E. 2549 (2006) stipulated

that BAAC Board of Directors be consisted

of the Minister of Finance as ex officio

chairman of the Board, a vice chairman and

up to twelve other board membersappointed by the cabinet.

BAAC 2009 Annual report page 176

Period Name

JAN 11 present Mr. Kittirat Na Ranong

JUN10 JAN 11 Mr. Thirachai Phuvanatnaranubala

DEC 08 MAY 10 Mr. Korn Chatikavanij

SEP 08 DEC 08 Mr. Suchart Thada-Thamrongvech

FEB 08 SEP 08 Mr. Surapong Suebwonglee

MAR 07 FEB 08 Dr. Chalongphob Sussangkarn

OCT 06 FEB 07 M.R. Pridiyathorn Devakula

Source: Ministry of Finance (http://www.mof.go.th/home/minister_3.html)



Slide - 22

Suggest SolutionSuggest Solution

Solution Action plan

1 Develop knowledge of

employee in term of financial

and marketing

Conduct the training or workshop to increase the financial

and marketing skill to the officer

Revised the KPI (or other measurement) to included the

training participate.

2 Prevent the resistance from

employee on change in the

process

Communicate the company target and benefit from change

(may applied Kotters change model)

Reference: Kotter, John P. (1996). Leading Change.

3 Develop the online application

in order to support live-time

activities

Collect data and make decision between make or buythe system

Create/upgrade should be step by step which may start with

application online module and develop to tracking system.

Target to reduce traditional manual work as well as

convenience get approval from the bank



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4 Develop the appraisal team

which respond for monitor and

audit the outsource work for

collateral appraisal.

Set the appraisal unit into the loan approval team.

Recruit or develop the existing employee (target at 25% of

outsource team)

Work with outsource in the first phase as the OJT to develop

the knowledge and skill

5 Develop HR department/system

to be able to set the suitable

number of employee

Collect the data and analysis of the current workload foreach loan approval process officer.

Using ratio analysis to calculate the number of officer require

to handle client

Using sensitivity analysis to support the additional client

from SME

6 Develop credit approval processto be more efficient especially

the first stage to reduce non-

performing loan problem

Revise the verify client information system to screen theblack list or potential NPL at the first stage.



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7 Revise the level of authority to

allow branch/province manager

to be able to approve the loan

with suitable tolerance

Analysis the existing data to group the loan into many group

as total amount

Calculate the proper level of authority for branch/province

manager to reduce the approval process step.

8 Create collateral guideline/book

to support the appraisalcollateral process and faster.



Q & A

Feb 2012

MGMG694 CP Banking Management



Slide - 26

Team memberTeam member

Mr. Thanapol Vachirarojpaisorn 5349204

Mr. Thana Wattanasak 5349211

Mr. Teerawat Hungsasut 5349212

Mr. Chiraroj Angsumalee 5349265



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1. Develop knowledge of employee in term of financial and marketing

Conduct the training or workshop to increase the financial and marketing skill to the

officer as well as revised the KPI to included the training participate.

2. Reorganization structure to set the job to match with age to prevent resistance from

old employee (THAM)

Applied Kotter change theory

3. Develop the online application to support online activities (make/hire) and easy to

track the process and easy to approve from bank (MAN)

Used benefit of online system to let the client able to submit the application anytime

as well as able to track the process. (example of ME)



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4. Develop the appraisal team (25% of outsource) to monitor and audit outsource workas well as work instead of outsource in case of lack of available of outsource. (TEE)

Hire or develop the officer to be act as appraisal unit. Appraisal unit will respond for

monitor and audit the outsource work for collateral appraisal. Moreover incase of

lack of outsource, the appraisal unit can be work instead.

5. Develop HR to be able to get the right number of employee (TOP)

Collect the data and analysis of the current workload for each loan approval process

officer. Using ratio analysis to calculate the number of officer require to handle client

plus using sensitivity analysis to support the additional client from SME

6. Develop credit approval process to be more efficient at the first stage to reduce

number of bad application (TOP)

Revise the verify client information system to screen the black list or potential NPL at

the first stage.



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7. Analysis loan amount and calculate the portion to Revise table of authority to allowbranch/province manager to able to approve loan with higher amount that large

portion of total loan (MAN)

8. Create collateral guideline/book to support the appraisal collateral process and

faster. (THAM)

Documents

20120220 Banking SWOT Analysis v2