After the Ministry of Finance permitted private banks in 1992, Taiwan''s financial markets started to become competitive. As the result of Asia Financial Crisis in 1997, credit over-expansion, bankruptcy of many enterprises, assets inflation, rapid increment of overdue loans (which caused serious impact on profits), and the dual-card debt event in 2005, many financial-related issues has been changed to social problems, moreover, had harmful influence on economic development. In the period of economic recession with meager profit, the reduction of non-performing loan and bank’s bad debts become the main goal of this study.
This thesis is aiming at investigating the characteristics of those cash card holders with overdue payment issue. The studying is conducted based on the data of Joint Credit Information Center as well as the 6,039 client records in Bank C (from Jan 2009 to Dec 2010) with valid and used cash cards. From these two data sources, 17 predictive variables, which cause the breach of contract, have been identified. Furthermore, by the means of Logistic Regression statistical analysis, several important factors resulting in overdue payments are classified as well.
There are six significant variables that will influence the possibility of overdue payments, i.e. education, company type, marriage, age, gender, and occupation. After the statistical analysis, it has been found that there is higher risk for those unmarried men under 29 years old with education below high school, work in construction or service industry to defer the cash card payment.
The study also discovers another customer pool with punctual payment. Therefore, banks are suggested to focus more on the long-term relationships and marketing strategies with such clients in order to strengthen the profitability. The characteristics of this customer pool are:
2.Age between 30 to 39 years old
3.Have real estate
4.Work in financial industry, electronics industry, or educational institutions
5.Work for listed or OTC companies or other well-known companies
The conclusions of this study provide a reference of bank management and risk management, moreover, strengthen the bank''s overall business performance and competitive advantage.