Joint Press Statement by

Credit Guarantee Corporation Malaysia Berhad

And Deutsche Bank


Petaling Jaya, 16 July: Credit Guarantee Corporation Malaysia Berhad (CGC) today announced it has appointed Deutsche Bank AG Singapore Branch to provide advisory and risk management services to CGC. The agreement includes the implementation of a unique credit risk management system that will help CGC more efficiently process loan guarantee applications and manage credit risk.


Known as the Comprehensive Approval System (COMPAS), the web-based system will help CGC better manage the varying levels of risk associated with the guarantees it issues, streamline approval processes and manage balance sheet risk. COMPAS achieves this by using unique criteria to assign loan applications with an internal credit rating, allowing them to be automatically processed or evaluated further by the Management.


With increased processing and better risk management capabilities, customers are expected to enjoy faster turnaround time and disbursement of loans. In addition, the implementation of this robust credit rating system will enable CGC to improve its accuracy in terms of risk profile identification and consequently benefit deserving customers who could potentially enjoy the competitive guarantee fees that come with better credit ratings.


COMPAS also enables CGC to enhance its management of loan quality.


ìWith increasing focus on customer service level, turnaround time and loan quality, it is critical for CGC to review its existing risk rating model and implement a more robust and dynamic one such as the COMPAS system that incorporates new risk parameters. This new initiative combined with the SME Credit Bureauís ratings on SMEs would enable CGC to determine the credit risk of borrowers with greater accuracy and thereby allowing us to effectively structure the guarantee fees based on the credit risk of SMEs and borrowers,î said CGCís Managing Director Datuk Wan Azhar Wan Ahmad.


Datuk Wan Azhar further stressed that the review of its risk rating model is part of CGCís overall efforts to improve its loans quality as well as to better serve the SMEs who form 99.2% of total business establishments and contribute 32% of the countryís gross domestic product.


Wolfgang Topp, Head of Risk Management Advisory at Deutsche Bank said: ìCOMPAS provides an excellent means for CGC to streamline its loan processing and potentially lower processing costs, while improving overall risk management and enhancing credit quality. Used in conjunction with Deutsche Bankís risk advisory services, COMPAS is a powerful tool which can enable CGC to maximise risk efficiencies and increase the quality of assets it holds on its balance sheet.î


The platform is an integral part of Deutsche Bankís integrated risk management advisory service, which is designed to support banks and financial institutions price, manage and distribute balance sheet risk and improve lending systems.


With Deutsche Bankís proven credit rating system and their wide experience as a provider of advisory and risk management services, CGC is confident that it will enhance its support to the SME sector in efforts to sustain the growth of this vital segment of the economy.


27-Jul-2009 18:43:57 PM