SAS® moves Croatia's leading bank closer to Basel II
Zagrebačka banka: Risk management and more in the 'new Europe'
Part of the Milan-based UniCredit Group, Zagrebačka banka (ZaBa) is Croatia's largest bank in both market share and assets (57.5 billion Croatian kuna, or approximately US$9.4 billion). A full-service bank with 186 branches and more than 4,000 employees, ZaBa provides loans to retail and corporate clients together with savings, investments, pension funds and transactional services.
Zaba has a highly developed infrastructure and clear market leadership in key areas, according to Sandra Bilandzic, Director, Risk Architecture Management Department. In 2002 ZaBa joined the UniCredit Group, one of Europe's most successful financial institutions. "Investing in 'new Europe' is part of UniCredit's long-term strategy," says Bilandzic. The acquisition meant increased impetus within ZaBa to enhance internal processes and address regulatory requirements. SAS was perceived as an essential element in enabling this change.
"Over the last decade we've embraced various opportunities for using SAS," says Bilandzic. These range from data capture and cleansing to data marts, model development and testing simulations, "what if?" analyses and all types of reporting. "SAS solutions have helped improve our ongoing business. Other Croatian banks are not nearly as advanced as we are in areas such as data quality or modelling." ZaBa has seen long-term benefits in all areas from the product level to client service, audits and more. "This has helped move us far closer to all three pillars of Basel II. Our use of SAS has shown that continuous, structured improvements can reduce the impact of big changes on a business like ours. And SAS has saved us a lot of time and effort – it's certainly made my professional life much easier."
Risk management and reporting
Satisfying a huge appetite for information
Credit risk data is gathered from more than 20 source applications on various platforms – including those dealing with account, client, exposure and collateral – with extracts available daily if required. ZaBa has also set up Web-based market risk reporting.
"The software's ability to deal quickly with ad hoc queries is a key benefit," says Bilandzic. "An efficient reporting system is of course dependent on data availability. Our competitive environment and the requirements of internal management and external regulators led us to collect and organize data in a more structured way, most recently through a data warehouse." Any mistakes or omissions are corrected centrally, with a clear audit trail covering who, what, when and how.
A direct impact on costs and profitability
Models developed cover a number of activities. They include a provisioning model for more than 800,000 individual customers (overdrafts) and a further 130,000 loan accounts. ZaBa has also developed a model to help implement IAS 39 principles (for the recognition and measurement of financial instruments, in particular derivatives) well in advance of the necessary regulatory changes being made by the Croatian National Bank. ZaBa has deployed models in new product design for individual customers – to help grow market share without jeopardizing the bank's risk profile – and in client behavioural scoring for credit risk monitoring. ZaBa was the first non-Italian bank in the UniCredit Group to develop such scorecards.
ZaBa used SAS to develop simple systems for tracking credit and market risk, providing balance sheet reports and industry sector analyses. Bilandzic says, "We've also built more sophisticated applications. The most notable help us deal with any legal cases against the bank, replacing paper-based evidence, while our Internal Rating model collects all necessary data, calculates and validates ratings and provides reports."
Faster 'time to intelligence'
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.
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Director, Risk Architecture Management Department
Risk management and reporting, regulatory compliance
SAS for data management, analysis, modeling and reporting, with a direct impact on costs and profitability while moving the bank closer to Basel II compliance
Enhanced cost control and increased profitability while maintaining fair banking standards
“ Using SAS is like having another person in the department. ”
Director, Risk Architecture Management Department