Top PDF Credit risk management in Sonali Bank Ltd.

Credit risk management in Sonali Bank Ltd.

Credit risk management in Sonali Bank Ltd.

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Concentration of credit risk arises when a number of counter parties are engaged in similar business activities, or activities in the same geographical region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. To manage credit risk, the Bank applies credit limits to its customers and obtains adequate collaterals. Credit risk in the Sonali Bank Ltd.'s portfolio is monitored, reviewed and analyzed by the Credit Risk Management (CRM).
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Credit risk management practice in Sonali Bank Ltd.

Credit risk management practice in Sonali Bank Ltd.

In this study I made an attempt to demonstrate the credit risk management practices in Sonali Bank Ltd. The study is carried out in a widely practiced manner. In chapter 2 I tried to give an overview of the bank. Here I summarized current status of the bank, main services it offers, practice of CSR as well as government agendas etc. Disclosures that are made under BASEL-II relating to Credit risk of the bank and credit rating are also presented here. In the end I tried to do an SWOT analysis on overall position of the bank. I also tried to illustrate CRM practice that I experienced during my internship period. I tried to show the performance of this particular branch from the data I collected during my internship. Though it is near impossible to judge overall CRM practice of such big organization from working in a small branch for short period of time. In the last chapter I made some recommendations that I think the management should look into.
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Credit risk management practices in Sonali Bank Limited

Credit risk management practices in Sonali Bank Limited

To support my internship report I worked as an intern (at least ninety days) in Sonali Bank Ltd. Mirpur Shilpa Elaka branch and my topic of the report is "Credit risk management practices in Sonali Bank Ltd." as part of the fulfilment of internship requirement. One of most significant challenges for a bank is to strongly manage its credits. Since the largest slice of income generated by a bank and a major percentage of its assets is subject to this credit, it is obvious that sensible management of this credit is fundamental to the sustainability of a bank.
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Investigating Risk Effect and Profit Management on Bank Credit Risk

Investigating Risk Effect and Profit Management on Bank Credit Risk

Because of the asset importance and its dynamism from one point of view and its flexibility for the outside variables, which are caused because of social, political and economic situations, from another point of view, creation of a mechanism for resistance of this insurance institution is a financial markets duties. This mechanism structure at first, should own attractive ability of stagnant savings by financial policy. Secondly, this mechanism should ensure access efficiency of the stagnant sources to effective activities. Asset owners to invest on their financial sources should consider inflation, damages which are caused by foreign exchange liquidity, natural and marketing price, risks which are caused by operating of financial activities, credit of applicant asset, and his famousness in market by market share indicator. The accessibilities to the mentioned statements are time consuming and can impose costs of mistaken choices to real and legal individuals, so existence of a credit rating mechanism is necessary for applicant asset, (Sadraei, 2009). Credit rating mechanism indicates an important indicator for
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Credit risk management of IFIC Bank Limited

Credit risk management of IFIC Bank Limited

International Finance Investment and Commerce Bank Limited (IFIC Bank Ltd.) is a banking company incorporated in the people‟s republic of Bangladesh with limited liability. It was set up at the instance of the Government in 1976 as a joint venture between the Government of Bangladesh and sponsors in the private sector with the objective of working as a finance company within the country and setting up joint venture banks/ financial institutions abroad. The Government held 49 percent shares and the rest 51 percent were held by the sponsors and general public. In 1983 when the Government allowed banks in the private sector, IFIC was converted into a full-fledged commercial bank. The Government of the People‟s Republic of Bangladesh now holds 32.75% of the share capital of the Bank. Leading industrialists of the country having vast experience in the field of trade and commerce own 11.31% of the share capital and the rest is held by the general public.
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Credit risk management of BRAC Bank Limited

Credit risk management of BRAC Bank Limited

BRAC Bank Limited, one of the third generation of commercial banks started its journey on July 04, 2001. It is an affiliate of BRAC (Bangladesh Rural Advancement Committee), one of the world’s largest non-governmental development organizations founded by Sir Fazle Hasan Abed in 1972. The Bank operates under a "double bottom line" agenda where profit and social responsibility go hand in hand as it strives towards a poverty-free, enlightened Bangladesh. BRAC Bank focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which has remained largely untapped within the country. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh. Since inception in July 2001, the Bank's footprint has grown to 151 branches, over 300 ATM Booths, 405 SME Unit Offices, 1,800 remittance delivery points and 8,306 human resources. In addition to small business lending, BRAC Bank has fast growing remittance, savings mobilization and consumer lending businesses
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Market and credit risk as components of bank enterprise risk management

Market and credit risk as components of bank enterprise risk management

Imbierowicz and Rauch (2014), focused on measuring the interaction between credit and liquidity risk. Their work is of importance to my paper, where I am measuring whether the market and credit risk affect each other or not, because they clearly set a definition on how to measure credit risk. Their data set was from 1998 first quarter to 2010 third quarter, including 4046 non-default US commercial banks. They also included 254 default banks from 2006 first quarter to 2010 third quarter. The data for profit and loss, off-balance sheet items, and balance sheet was retrieved from Federal Financial Institutions Examination Council (FFIEC) call report on quarterly basis. This data is publicly available and can be retrieved through the Federal Reserve Bank of Chicago. The banks in their dataset were “US based and held banks”. Moreover, all the analysis was done on the charter bank and not the holding company level. The information needed on the banks was retrieved from the Federal Deposit Insurance Corporation (FDIC) public database. For the macroeconomic variables, they used the public database of St. Louis Federal Reserve (FRED). The variables used by authors are: proxy for liquidity risk and proxy for credit risk. The controlled variables are:
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The credit risk management of Standard Chartered Bank Limited, Mirpur Branch

The credit risk management of Standard Chartered Bank Limited, Mirpur Branch

18 Banking business consists of borrowing and lending. Banks act as intermediaries between surplus and deficit economic units. Thus a banker is a dealer in money and credit. Banks accept deposit from large number of customers and then lend a major portion of the accumulated money to those who wish to borrow. In this process banks secure reasonable return to the savers, make funds available to the borrowers at a cost and earn a profit after covering the cost of funds. Banks, besides their role of intermediation between savers and borrowers and providing an effective payment mechanism, have been allowed to diversify into many new areas of better paying business activities.
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Credit risk management of commercial bank

Credit risk management of commercial bank

quality and credit management personnel training and the control of professional ethics, set up the concept of dynamic management after credit, human resource strategic concept, and the benefit of post-loan management concept. At the same time improve the specialization level of management after loan and comprehensive quality is essential [8]. (2) make post-loan management procedures and content specific. Post-loan management including after regulation, credit loan, account checking, loan risk classification, customer maintenance, there is a problem loan processing and loan recovery and summary evaluation, etc. (3) to do a good job of loan risk classification, we must strengthen post-loan management. To do a good job of loan risk classification, the corresponding resolve measures to prevent and overcome risks, because of information asymmetry between Banks and enterprises on the adverse impact of the credit management, make the post-loan management standardized and institutionalized. (4) Institutionalize and intensify post-loan management work earnestly. Establish and improve a set of specific and detailed post-loan inspection measures for the administration of assessment [9]. The customer check process, information analysis, early warning and forecasting process, such as customers withdrew from the process involved in the work the overall credit assessment category, for each assessment standards and the reference for management links and factors, prompted the post-loan management consciousness deeply post-loan management, perfecting the incentive mechanism.
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Credit Risk Management (CRM) Practices in Commercial Banks of Bangladesh: “A Study on Basic Bank Ltd.”

Credit Risk Management (CRM) Practices in Commercial Banks of Bangladesh: “A Study on Basic Bank Ltd.”

Abstract: This Paper is not only a way for getting acknowledged about the efficiency in managing credit risk of Bangladeshi Banks, but also a conclusive reference for studying how CRM practices helps to increase profitability and long term sustainability of commercial banks. Credit risk management encompasses identification, measurement, matching mitigations, monitoring and control of the credit risk exposures. For conducting this research, I have to collect secondary data relating to the financial status of Basic Bank Ltd.In my analysis I have divulged a comprehensive overview about CRM in different phase of my report. First, I have described about the CRM practice and performance of BBL. Then, I analyze the impact of CRM on financial performance of bank. I have used Ms Excel as well as SPSS software to compare relationship between CRM and banks profitability. After analysis and discussion I have identified some conclusive findings of my research paper.
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Credit risk management of Prime Bank Limited

Credit risk management of Prime Bank Limited

Prime Bank’s corporate business provides tailored services to corporate and institutional clients. The financing is based on both conventional and Islami Shariah mode. While proving large loans to our customers, the policy of Bangladesh bank is strictly followed. The customer relationship program has been strengthened and frequent interaction has been ensured to care the growing needs of our customers. Corporate finance in both modes - conventional and Islami Shariah showed steady growth. PBL has been a dominant player in arranging syndicated loan for its customers. PBL already proved itself as a trusted partner of both syndication participants and large loan borrowers and it is expected that demand for structured projects. The sectors of financing include pharmaceuticals, chemicals, cement, ceramic, steel micro finance, food and allied industry, power station, infrastructure. It raises funds from the market fir financing term loans, working capital at the most competitive rates under secured terms and condition.
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Credit Risk Management as a Good Measure of Financial Performance of Banks in Ghana

Credit Risk Management as a Good Measure of Financial Performance of Banks in Ghana

This study considered the effect of credit risk management on financial performance and examine the causal link amid the measurement variables (bank credit, liquidity risk and capital risk) for 15 banks in Ghana covering the period 2007 to 2017. First, considering the results from homogeneity assessment and Pesaran CD's checks, we detect the presence of heterogeneity and cross-sectional correlations for the explored data. Second, the CADF and CIPS panel unit root tests report that, the variables are non-stationary at their stages but become stationary at their first transformations. Third, the Westerlund-Edgerton panel bootstrap cointegration test show that, the variables are cointegrated and hence possess a structural long-run relationship. Forth, results from the PMG estimator through the panel ARDL model show that; (1) A two-way connectedness is verge by bank BC and FP in the long- period and short-period; (2) A positive and significant one-way cause running from liquidity to FP, a one-way cause amid capital risk and FP lastly one-way causality only in the long-period for LR and BC are evidenced; (3) The PMG estimator through the panel ARDL framework is evidenced to be very significantly effective to the application of Granger causativeness test. Though difference parameter estimates are evidenced, the results is generally consistent with that of the PMG in terms of connections.
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Impact of Credit Risk Management on Bank Performance of Nepalese Commercial Bank

Impact of Credit Risk Management on Bank Performance of Nepalese Commercial Bank

The study conducted by Macaulay (1988) in the United States and found credit risk management is best practice in bank and above 90% of the bank in country have adopted the best practice. Inadequate credit policies are still the main source of serious problem in the banking industry as result effective credit risk management has gained an increased focus in recent years. The main role of an effective credit risk management policy must be to maximize a bank’s risk adjusted rate of return by maintaining credit exposure within acceptable limits. Moreover, banks need to manage credit risk in the entire portfolio as well as the risk in individual credits transactions (Sreelakshmi, 2014). The result from the study by Poudel (2012) showed that credit risk management is an important predictor of bank financial performance thus success of bank performance depends on risk management. Since risk management in general has very significant contribution to bank performance, the banks are advised to put more emphasis on risk management. In order to reduce risk on loans and achieve maximum performance the banks need to allocate more funds to default rate management and try to maintain just optimum level of capital adequacy. Credit Risk Management is one of the biggest risks faced by commercial banks and assuming even greater importance in a changing regulatory regime and volatile market conditions. Advanced credit analytics are now required to be compliant and to make sound business decisions. However, to successfully operationalize credit analytics, banks need to assess credit risks across the entire lending value chain and build an integrated risk management layer that uncovers interlinkages between credit risk and other risk categories (market risk, fraud and liquidity risks) (Otamurodov & Rakhimov, 2016; Jain, 2014).
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Credit risk management practices in Mutual Trust Bank Limited

Credit risk management practices in Mutual Trust Bank Limited

The topic of my internship report is “Credit Risk Management Practices in Mutual Trust Bank Limited”. The justification of my report writing on this topic is that credit risk management has attained the latest highlighted feature in the banking field. The arena of credit risk has gained extensive attention in recent years due to the increased competition and the challenges of the present financial crisis. The main objective of my report is to have a complete knowledge on the activities performed in Credit Risk Management of Mutual Trust Bank Limited. In this report, I have put some specific objectives and methodology to reach the main objective. Specific objectives are to learn the most recent risk regulation for banks which is linked with credit risk management, to understand various dimensions of risk involved in different credit transactions, to suggest scopes of improvement in credit risk management of Mutual Trust Bank Limited. To get the answers of my objectives, I have considered credit risk grading, risk area analysis under qualitative and quantitative approach for credit risk assessment, credit approval process, administration and recovery process and also gone through several newspapers and MTB Annual Report 2014 for required information. This report contains some limitation because of information security concern and my interest to have coverage in General Banking, Clearing, Foreign Exchange and Credit Department within the 12- week internship period.
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THE ROLE OF CREDIT REFERENCE BUREAU ON FINANCIAL PERFORMANCE OF BANKS IN KENYA: A SURVEY OF SELECTED BANKS IN KERICHO TOWN

THE ROLE OF CREDIT REFERENCE BUREAU ON FINANCIAL PERFORMANCE OF BANKS IN KENYA: A SURVEY OF SELECTED BANKS IN KERICHO TOWN

Licensed under Creative Common Page 535 increasing returns on assets and better financial returns. study concluded that credit risks identification, credit scoring mechanism, credit analysis and assessment are good predictors of the model consequently those three indicators used of credit risk management have responded positively with the financial performance of banks in Kenya. The study recommends that the bank’s policy recommendations are the key factor of success of financial institutions. Credit risks management is a key factor for the success of financial institution operations in Kenya and by extension pillar to financial prosperity and stability. It is therefore important for the Government of Kenya to develop policy and legal environment that is conducive to association of commercial banks.
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Capital Allocation and Bank Management Based on the Quantification of Credit Risk

Capital Allocation and Bank Management Based on the Quantification of Credit Risk

Japanese city banks have tens of thousands of clients whose creditworthiness ranges from triple A to unrated (for example, privately owned businesses). Monte Carlo simulation is therefore inappropriate for each new lend- ing transaction since the simulation demands a heavy calculation load and accordingly a lengthy credit approval process. In our model, we perform Monte Carlo simulation once for all the portfolios and then calculate the risk ratio on the uncovered balance of each loan on the basis of the simulation result. We have devised a method to calculate the risk amount in a particular category by summing individual risks. We introduce the concept of credit risk delta to achieve this purpose. The credit risk delta is a measurement of the marginal increase in the risk of the entire portfolio when loans to one segment that constitutes the portfolio are increased. The maximum credit risk delta is measured at a 99 percent confidence interval. The average of credit risk deltas is equal to the expected loss, but the delta’s maximum does not corre- spond to the maximum loss.
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Contingency Factors, Risk Management, and Performance of Indonesian Banks

Contingency Factors, Risk Management, and Performance of Indonesian Banks

Fraser and Kolari (2001) concluded that banking industries deal with credit, country, market, interest rate, liquidity, operational, legal and reputation risk. In addition Basel Committee on Banking Supervision (2000) define credit risk as the potential failing of banks borrower orcounter party to meet its obligations. Moreover, the committe highlighted that banks face credit risk sourced from loan and other various financial instruments, including acceptances, interbank transactions, trade financing foreign exchange transactions, financial futures, swaps, bonds, equities, options, and in the extension of commitments and guarantees, and the settlement of transaction. Thoses risks would have a negative impact on the bank's performance. Since the bank facing a variety of potential risks throughout the bank's operations, management must be able to implement an effective risk management to control and manage risk. Banks’ managers should consider the best way to reduce risks. Gordon et al.(2009) describe management in any industries including banking must view and manage risk as firm fundamental concern based on a holistic perspective known as enterprise risk management (ERM) in addition Pagach and Warr (2011) state that ERM is a strategy that holistically evaluate and manage the risks. However, for banking industries credit risk should be given greater attention in risk management compared to other risks. Therefore, banks’ managers should implement a holistic risk management (ERM) as well as specific credit risk management (CRM) principles
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Credit Risk Management: Implications on Bank Performance and Lending

Growth

Credit Risk Management: Implications on Bank Performance and Lending Growth

investigated the impact of bank’s specific risk characteristics, and the overall banking environment on the performance of 43 commercial banks operating in 6 of the Gulf Co-operation Council (GCC) countries over the period 1998-2008. Using regression analysis, he observed that bad debts or credit risks, liquidity risk and capital risk are the major factors that affect bank performance when profitability is measured by return on assets while the only risk that affects profitability when measured by return on equity is liquidity risk. Hosna & Manzura, (2009) investigated the effects of credit risk and other risk components on the banks’ financial performance. They found a strong relationship between risk components and the banks’ financial performance. Harvey & Merkowsky (2008) examined the relationship between credit risk and banks’ profitability. They found a linear relationship between credit risk and bank profitability. Afriyie & Akotey, (2011) investigated the effect of credit risk management techniques on the banks’ performance of unsecured loans. They concluded that financial risk in a banking organization might result in imposition of constraints on bank’s ability to meet its business objectives. Kolapo, Ayeni and Oke [1] showed that the effect of credit risk on bank performance measured by ROA was cross- sectional invariant, though the degree to which individual banks were affected was not captured by the method of analysis employed in the study. Osuka & Amako, (2015) using time series data from 2001 – 2011 appraised the impact of the credit risk management in bank’s financial performance in Nepal. The result of the study indicates that credit risk management is an important predictor of banks’ profitability and financial performance. Harvey & Merkowsky (2008
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Credit risk management of United Commercial Bank Limited.

Credit risk management of United Commercial Bank Limited.

I, Tanusree Barua, would like to inform you that it is a great feeling to me to submit my internship report on “Credit Risk Management of UCBL” as a mandatory requirement for BBA program. I found this report to be useful and practical where I can incorporate my knowledge gathered throughout my graduation courses. I have concentrated my best effort to achieve all the objectives of the report. However, some of the aspects are unintentionally overlooked. It is hoped that you would ignore any discrepancies considering my limitations. I believe that the knowledge and experience of my internship program will immensely help me in my professional life. I will be obliged and grateful to receive your suggestions and comments on this regards.
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Credit appraisal and risk management of Uttara Bank Limited

Credit appraisal and risk management of Uttara Bank Limited

This report is basis on the entire process of credit approval and the credit risk assessment system of Uttara Bank Limited and identifying the positive aspects as well as the shortcomings of that credit scheme. After completing of BBA program of BRAC Business School, I have completed my internship in Uttara Bank Limited (Sadarghat Branch), one of the largest and reputed private commercial bank in Bangladesh and went under a rotation program in different department of Uttara Bank Limited (UBL). I worked with some officers and some departments sincerely. But I mainly gave emphasis on the bank’s credit appraisal and recovery policy. The objective was to analyze the criteria of UBL’s such as loan distribution sector, interest rate of loan, the bank’s capability to recover load during stipulated time and the management efficiency regarding classified loan. The primary activities carried out by the credit department of UBL include evaluation of loan application, preparing necessary documents for the loan approval, monitoring the loan after disbursement and ensuring its repayment and finally initiate classification in case of non-recovery.
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