Appendix 1: Samples of Early Warning Signals
| No: 41033343 | Date(g): 6/1/2020 | Date(h): 11/5/1441 | Status: In-Force |
Effective from Jul 01 2020 - Jun 30 2020
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The Following are illustrated for indicative purposes and are not intended to be prescriptive, as stated in the rules of Management of Problem Loans, banks should establish EWS that are suitable to their portfolio:
| EWS At Borrower Level from External Sources | |
| Debt and collateral increase in other banks | |
| Past-due or other NP classifications in other banks | |
| Guarantor default | |
| Debt in private central register (if any) | |
| Legal proceeding | |
| External Sources | Bankruptcy |
| Changes in the company structure (e.g. merger, capital reduction) | |
| External rating assigned and trends | |
| Other negative information regarding major clients/counterparties of the debtor/suppliers | |
| EWS at a borrower level from internal sources | |
| Negative trend in internal rating | |
| Balances not appearing in current account / lower balances in Margin account / Negative own funds | |
| Significant change in liquidity profile | |
| Liabilities leverage (e.g. equity/total < 5% or 10%) | |
| Number of days past due | |
| Companies | Number of months with any overdraft/overdraft exceeded |
| Profit before taxes/revenue (e.g. ratio < -1%) | |
| Continued losses | |
| Continued excess in commercial paper discount | |
| Decrease of turnover | |
| Reduction in credit lines related to trade receivables (e.g. year- on-year variation, 3m average/1y average) | |
| Unexpected reduction in undrawn credit lines (e.g. undrawn amount/total credit line) | |
| Negative trend in behavioral scoring | |
| Negative trend in probability of default and/or internal rating | |
| Mortgage loan installment > x time credit balance | |
| Mortgage and consumer credit days past due | |
| Decrease in the credit balance > 95% in the last 6 months | |
| Average total credit balance < 0.05% of total debt balance | |
| Forborne Exposures | |
| Nationality and related historic loss rates | |
| Individuals / sole proprietors | Decrease in payroll in the last 3 months |
| Unemployment | |
| Early arrears (e.g. 5-30 days of past due, depending on portfolio/borrower types) | |
| Reduction in bank transfers in current accounts | |
| Increase of loan installment over the payroll ratio | |
| Number of months with any overdraft exceeded | |
| Negative trend in behavioral scoring | |
| Negative trend in probability of default and/or internal rating | |
| EWS at a portfolio/segment level | |
| Size distribution and concentration level | |
| Portfolio Distribution | Top X (e.g. 10) groups of connected borrowers and related risk indicators |
| Asset class distribution | |
| Breakdown by industry, sector, collateral types, countries, maturities, etc. | |
| Risk parameters | PD/LGD evolution (overall and per segment) |
| PD/LGD forecasts and projections | |
| Default loan | |
| Volumes and trends of significant risk provisions on individual level | |
| NPL/restructuring status/foreclosure | NPL volume by category (>90 past due, etc.) |
| Restructuring volume and segmentation ( workout, forced prolongation, other modifications, deferrals, >90 past due, LLP) | |
| Foreclosed assets on total loans | |
| NPL ratio without foreclosed assets | |
| EWS by specific type of borrowers/sectors | |
| General | Customizable index data (GDP, stock markets, commodity prices, CDS prices, etc.) |
| Real estate | Real estate-related indexes (segment, region, cities, rural areas, etc.) |
| Rental market scores and expected market value changes | |
| Aviation | Airline-specific indicators (passenger load, revenue per passenger, etc.) |
| Energy | Index data on regional alternative energy sources (e.g. wind quantities, etc.) |
| Information-gathering system on potential technical or political risks on energy | |