Investor Presentaiton
Simulating the Rebuttal of Default
Loan Balance Rs.1000
# Rentals
Cash Inflow
30 Days
1
60 Days
90 Days
2
3
120 Days
4
150 Days
5
180 Days
6
210 Days
7
240 Days
8
270 Days
300 Days
9
10
100
100
100
100
Without Rebuttal for a Customer Aged 90Days
Probability of Default is = 100% on 90 DPD
Recovery After Default = 400
Therefore the Loss
=
600 Resulting in a LGD of 60% (600/1000)
Overall Loss Rate
=
= 100% (PD) x 60% (LGD) = 60%
With Rebuttal for a Customer Aged 90Days
Probability of Default is
=
100% on 180 Days Therefore CF recoveries until T6 is Captured in PD
Therefore the PD of 90 Days
=
80% (8/10)
Outstanding at the Default Point
= 800
Recovery After Default
= 200
Therefore the Loss
=
Overall Loss Rate
Page 16
= 600 Resulting in a LGD of 75% (600/800)
= 80% (PD) x 75% (LGD) = 60%
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