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-- System protects lenders while speeding corporate ratings process --


SAS Institute Japan has announced that Teikoku Databank (TDB), Japan's largest corporate credit research company, has developed a system to help shield lenders from high-risk credit exposure by predicting the likelihood of a corporate borrower going bankrupt within a year.

The system will also automate and speed up the credit approval process - something that is always problematic for organisations that deal with a large number of small accounts. TDB's system is powered by SAS' analytical software, including its award-winning data mining software, Enterprise Miner(tm).

"The system can predict whether or not a company is likely to go bankrupt with an accuracy of 70 percent or more," said Katsushige Iwabuchi, a member of the TDB team that built it. "We verified its performance using bankruptcy cases that occurred five months after the system was completed. The system certainly enables bad debt to be avoided quite efficiently."

Constructed with TDB-owned data from corporate surveys of approximately 820,000 companies, the system uses 10 variables based on qualitative information, such as data about corporate management teams and a company's solvency. This detail gives the system a high degree of predictive accuracy. TDB will calculate one-year bankruptcy prediction values, which it will offer on a trial basis to major organisations located in Tokyo. The predictions will be revised monthly. Using the bankruptcy prediction values provided by TDB, organisations can increase both the accuracy and the efficiency of their credit checks. The model also provides a set of standards that lenders can use to evaluate their customers.

TDB's bankruptcy prediction system is based upon three data sources - company credit reports, including TDB ratings that are created by TDB employees after onsite company visits, internal TDB credit data, and data on businesses that went bankrupt during 2000. The system also incorporates the degree to which a company's assets are collateralised, the ratio of factors that comprise TDB rating, and credit information obtained through the company's information gathering activities. As a result, organisations with the same rating can have different bankruptcy expectancies.

"The software provided by SAS is superior in its ability to process and analyse large volumes of data at high speed," Iwabuchi said. "SAS has become the de facto standard for analytics within TDB. The outstanding support provided by SAS' staff has also contributed hugely to the success of our project."


About Teikoku Databank


Founded in 1900, Teikoku Databank is a corporate credit research company. Over the past 100 years, the company has continued to refine its research activities. With its annual cases numbering 1,420,000, it has become the largest corporate credit research company in Japan. Following the motto "Visit and Confirm," Teikoku Databank's staff of 1,500 professional field reporters engages in research activities via a network of 82 offices nationwide.

For more information, please visit: http://www.teikoku.com/intro/parent/parent.html




About SAS


SAS provides software and services that enable customers to transform data from all areas of their business into intelligence. SAS solutions help organisations make better, more informed decisions and maximise customer, supplier, and organisational relationships. Solutions from SAS, the world's largest privately held software company, are used at more than 37,000 business, government and university sites around the world. Customers include 98 of the Fortune 100 and 90 percent of Fortune 500 companies. For 25 years, SAS has been giving our customers The Power to Know(tm).

For more information, visit http://www.sas.com



For further information, please contact the SAS press office on: tel:+44 (0)20 7544 3202
fax: +44 (0)20 7240 1910 or saspressoffice@webergroup.co.uk

Please visit SAS' Web site: http://www.sas.com/uk

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