• Journal of Information Technology Services
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• v.11 no.4
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• pp.233-250
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• 2012

In this paper, credit card delinquency means the possibility of occurring bad debt within the certain near future from the normal accounts that have no debt and the problem is to predict, on the monthly basis, the occurrence of delinquency 3 months in advance. This prediction is typical binary classification problem but suffers from the issue of data imbalance that means the instances of target class is very few. For the effective prediction of bad debt occurrence, Support Vector Machine (SVM) with kernel trick is adopted using credit card usage and payment patterns as its inputs. SVM is widely accepted in the data mining society because of its prediction accuracy and no fear of overfitting. However, it is known that SVM has the limitation in its ability to processing the large-scale data. To resolve the difficulties in applying SVM to bad debt occurrence prediction, two stage clustering is suggested as an effective data reduction method and ensembles of SVM models are also adopted to mitigate the difficulty due to data imbalance intrinsic to the target problem of this paper. In the experiments with the real world data from one of the major domestic credit card companies, the suggested approach reveals the superior prediction accuracy to the traditional data mining approaches that use neural networks, decision trees or logistics regressions. SVM ensemble model learned from T2 training set shows the best prediction results among the alternatives considered and it is noteworthy that the performance of neural networks with T2 is better than that of SVM with T1. These results prove that the suggested approach is very effective for both SVM training and the classification problem of data imbalance.

• The Korean Journal of Financial Management
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• v.24 no.2
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• pp.113-145
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• 2007

In this paper, we examine whether the poor performance of distressed firms where banks take equity may occur due to agency problems in banks. By adopting the debt-equity swap, the bank can effectively postpone the occurrence of bad loans form the failure of the distressed firm. As a result, firms with more debt will be more likely to obtain debt-equity swap, regardless of their probabilities of revival. This is not because they are more profitable, but because they have more debt and thus it poses greater risk to the bank. We empirically look into these predictions with the data of 44 workout firms and find the following results. First, debt-equity swap appears to be more applicable especially when the distressed firms are large and when BIS of related banks is low. Specifically, the conditional probability of 'large firms' based on debt-equity swap is 65.52% and the conditional probability of 'bad banks' based on debt-equity swap is 75.86%. Also, as predicted, the performance of these debt-equity firms is poorer than that of non debt-equity firms. The conditional probability of 'large firms' based on posterior failure is 84.62% and the conditional probability of 'bad banks' based on posterior failure is 84.62%. This is consistent with our predictions and is also confirmed through results of the logit regression analysis. Second, when the restructuring is led by 'good banks', the performance of equity-swap firms is superior to that of non equity-swap firms. This result is consistent with that of James(1995). Hence, we can conclude that there may be some agency problems in restructuring distressed firm-especially when distressed firms are large and banks are bad. And these agency problems can reconcile the difference between James' results and Park, Lee, and Jang's.

• Korean Journal of Human Ecology
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• v.18 no.1
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• pp.123-136
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• 2009

Debt and credit problems in Korea have been escalated during the past decade. The number of people with debt and credit problems is in its historic high. In May 2008, about 2.48 million debtors are officially classified as bad debtors and 7.20 million people have low credit scores. People with low credit scores are in disadvantageous situation in the financial market thus their financial transactions and activities are limited. In 2004, Korean government introduced various credit rehabilitation programs. However, most of these problems are remedial in nature and preventive programs such as credit counseling and debtor education are lacking. The purpose of this review is to examine US credit counseling and debtor education programs to obtain insights for preventive credit program developments in Korea. The review focused on programs offered through National Foundation for Credit Counseling, Jump Start, and Cooperative Extension Services from two large land grant Universities. From the program review suggestions and recommendations for educational contents, program and educator developments, and program quality control were discussed.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.1
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• pp.91-105
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• 2019

The paper aims to combine balance sheet analysis at the firm level with the International Monetary Fund's public debt sustainability assessment framework to assess state-owned enterprises' (SOE) leverage as a contingent liability to the public sector. Based on company data and the interest coverage ratio as a measure of debt at risk, aggregate baseline scenarios are projected to gauge the magnitude of SOE debt as a contingency. SOE's financial and debt ratios are first bootstrapped to generate firm-level distributions and then averaged into a fan chart of the economy-wide SOE contingent liability. Applied to the People's Republic of China as an example, the study finds that by the end of 2015 SOE leverage had grown to a substantial liability. However arbitrary the assumptions underlying these projections, it would appear that even if authorities had to mop up as much as 20% of SOE debt at risk gone bad, this would have been manageable at roughly 2.7% of the gross domestic product in 2016 or 5.5% by 2021. This projection framework is fully amenable to alternative assumptions and settings, which makes it a useful analytical tool to monitor contingent liabilities from non-financial corporate debt that have been building in emerging and advanced economies alike.

• The Korean Journal of Financial Management
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• v.11 no.2
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• pp.175-193
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• 1994

This paper relates the valuation consequences of common-stock, convertible-debt and straight-debt offering announcements to the issuing firms' stock price performance in periods before the announcements. Similar to previous studies on equity offerings, we find that the announcement effects of security offerings, regardless of offering types, are negatively correlated with the short-term pre-offering stock returns. We show that the informational impact of the preceding earnings and dividend(E/D) announcements account for the previous findings of the negative correlation. We further report that security issues following 'good-news' E/D announcements result in larger stock price declines than issues following 'bad-news' E/D announcements. The finding is consistent with the hypothesis that the E/D information affects the investors' assessments of the firm's cash flow expectations and of the probability of external financing.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.10
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• pp.327-339
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• 2021

This study examines the impact of bank restructuring on the financial performance of commercial banks in Vietnam. The data for this study was obtained from the audited financial statements of 30 Vietnamese commercial banks from 2007 to 2019. Multiple regression analysis was used for investigation. Financial performance, as evaluated by ROAA, ROEA, and NIM, is the dependent variable. Financial restructuring, ownership restructuring, and operational restructuring are the independent variables. Pooled least squares (Pooled OLS), fixed effects model (FEM), random effects model (REM), and system generalized moment regression model (System GMM) are the estimate methods used to increase the accuracy of the regression coefficient. The research results show that the variables of financial restructuring activities such as government intervention and the ratio of equity to total assets; variables of ownership restructuring such as capital adequacy ratio, privatization of state-owned commercial banks, mergers, and acquisitions; variables of operational restructuring such as employees, branches, the cost to total assets; GDP variables and the second restructuring period have a positive impact on financial performance. Variables such as debt-to-capital ratio, bad debt ratio, state ownership ratio, expense-income ratio, and inflation have a negative effect on financial performance.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.8
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• pp.99-108
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• 2022

This study aims to examine the influence of capital structure on the business efficiency of joint stock commercial banks listed on the Vietnamese stock market. The article uses data collected from the financial statements of 15 prominent joint-stock commercial banks out of 27 joint-stock commercial banks listed in Vietnam from 2011 to 2021. The research uses E-view software in quantitative analysis to build regression models to determine the relationship and the impact of capital structure factors on the business efficiency of listed joint stock commercial banks. Research results show that ROA is affected by 2 variables of capital structure. It is the sum of customer deposits to total assets and total liabilities to total equity. Total debt to total equity and total customer deposits to total assets both have a negative effect on ROA. For the regression results of ROA with all control variables, the control variables have a positive relationship with the dependent variable. The article has provided recommendations based on the research findings to determine the proper capital structure. Managers must solve the outstanding amount of mobilized capital in previous years, combined with the bad debt handling activities that have arisen.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.12 no.6
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• pp.13-24
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• 2017

The purpose of this study is to examine the effect of the management of receivables on the management performance of micro manufacturing industries. The results of the survey are as follows. First, among the factors of management of pre- and post-trade receivables in the micro manufacturing industries, management organization and regulations, contract execution management, bad debt control, which are the subordinate factors of credit control, are positive (+) significant effect on stability. In terms of profitability, management organizations and regulations, which are subordinate factors of credit control management, have a positive (+) significant effect on profitability. The recovery management, which is a factor of management of post - receivable receivables, did not have a significant effect on the stability and profitability of financial management performance. Second, the effect of financial performance on organizational satisfaction is positively related to stability, while profitability has no significant effect on organizational satisfaction. The implication of this study is that pre - trade receivables management is more important than post - trade receivables management in the management of accounts receivables of micro manufacturing industries. Proactive credit management refers to the procedure of establishing and managing personal guarantees and physical guarantees in order to smooth the execution of the obligations at the same time as the contract is concluded through processes such as credit investigation, analysis and evaluation, and sales decision before the contract is concluded. Post receivables management based on the assumption of default is a receivables management procedure from receipt of receivables that are already defaulted to bad debts to bad debt processing. If the collection of receivables is delayed or bad debt is increased, Furthermore, a corporation may be subject to bankruptcy risk (insolvency by paper profits). Therefore, it is meaningful that this study suggests direction to induce change of contract type in advance by understanding the possibility of settlement of accounts receivable and recovery of bad debts within the day of transition in case of contract of micro manufacturing industries.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.11
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• pp.219-229
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• 2020

The study investigates the factors affecting the profitability of listed commercial banks in Vietnam. Survey data for this research were collected from 10 Vietnamese listed commercial banks for the period from 2008 to 2018. In the study, we have built a model of econometric regression with the dependent variable being listed commercial banks' profitability results measured through ROA. The research methods used include descriptive statistics, IV regression and OLS regression analysis, and the authors carried out the model verification with Stata 14 software. The results showed that operating efficiency, loans size, retail loans ratio, state ownership, inflation rate, and GDP growth are factors that have a positive impact on profitability On the other hand, variables such as capital size, credit risk, liquidity risk, bank size, and revenue diversification are statistically insignificant; hence, these variables are not statistically adequate to indicate the influence of those independent variables to banks' profitability. The findings of this study suggest that the quality of assets should be considered in the context that bad debt risks come from lending heavily to the real estate sector. Meeting Basel II's capital compliance requirements is relatively difficult for small listed commercial banks compared to bigger listed commercial banks in Vietnam.

• Journal of Korea Foundry Society
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• v.42 no.2
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• pp.83-93
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• 2022

Throughout this research course, we have analyzed the financial situation of more than 2,700 companies using credit evaluation disclosures from 2017 to 2019. The population was gathered based on the certification of Ppuri companies and Ppuri Expertise companies through the Korea National Ppuri Industry Center, accompanied by the NICE credit evaluation index. For the first time in Korea, we wanted to look at growth, profitability, and stability through financial analysis of the Ppuri industry. Through an indepth analysis, we identified operating income (rate), net income (rate), asset size, and debt ratio, along with three years of Ppuri company workers and total sales fluctuations, and looked at the financial structure per capita. In addition, financial status per person was compared by dividing Ppuri companies into six groups by employee size. Groups were 10 or fewer people, 11 to 20 people, 21 to 50 people, 51 to 200 people, 201-300 people, and 300 or more people; single individual companies were excluded for research convenience. Overall, the financial situation of Ppuri companies was judged to be in a very bad downturn, and financial indicators deteriorated over the course of the three years of investigation. In particular, the smaller the number of employees, the greater the financial fluctuations were and the worse the situations were. Among Ppuri companies, the casting industry, which is the technical starting point for the value chain of the industry, was found to also be in a very bad state, with continued workforce declines, total assets and sales reductions at severe levels, and operating income (rate) and net income (rate) also very poor. This is why we need a suitable and feasible policy direction, something that is difficult but must be allowed to develop.