Top PDF Credit risk management practices in Mutual Trust Bank Limited

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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An overview of banking service of Mutual Trust Bank Limited (MTBL)

An overview of banking service of Mutual Trust Bank Limited (MTBL)

Overall management is vested to the Board of Directors of the Bank. On behalf of the Board Managing Director executes all business, financial and administrative powers to operate the bank. Managing Director is assisted by 2 Deputy Managing Director posted of head office. For smooth functioning of bank’s day to day affairs head office activities are conducted under the banner of different named departments. The said departments are Human Resources Division (HRD), Credit Division (CRD), International Division (ID), General Banking Division GBD), Board & MD Secretariat, Central Accounts & MIS Division (CAD), Establishment & Development Division (ESD) etc. The Organization Chart of the bank as obtained is presented below.
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Impact of Credit Risk Management Practices on the Profitability, A Case of Askari Bank Limited

Impact of Credit Risk Management Practices on the Profitability, A Case of Askari Bank Limited

Businesses are set up to generate profits. Hence it’s the profitability of an organization that is the main goal. This is the basis for the long term survival of business. It is important for an organization to measure the past and present profits it had earned. Businesses earn income through their activities. Therefore it is likely that a business generating higher profits will provide more return on investments to the owners (Waweru & Kalani, 2009). A strong banking sector has the ability to avoid the negative factors and provide stable foundations for financial structure. The profitability of a bank is affected by the changing environment in which the bank operates. This also includes credit risk. Previous studies have shown this empirically that macroeconomic factors along with the bank related factors play an important role in the profitability of the banks (Stephen, Randolph, Jaffe, & Bradford, 2007).
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Credit risk management of Prime Bank Limited

Credit risk management of Prime Bank Limited

In order to streamline risk control features in a more effective manner, PBL has put in places all manuals as suggested in the core risk management guide lines of Bangladesh Bank. Its Standard Operating Procedure (SOP) contains all the guide lines and also includes some of the internationally accepted best practices. SOPS cover all operating departments including corporate banking, SME banking, retail banking, credit card, foreign exchange, treasury, human resources and financial administration. The SOPS include all processes related to the initiation, maintenance, settlement/closure and recording for the entire range of products offered by the Bank. SOPS will help the bank maintain control over its operations, clarify the links with the IT system, act as an effective communication tool that will reduce training time, improve risk management and work consistency.
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Credit risk management of IFIC Bank Limited

Credit risk management of IFIC Bank Limited

Credit Monitoring play crucial roles in achieving financial goals. Too conservative a policy will entail high opportunity cost through loss of business, but too liberal a policy results in the cost of tying up funds in debtors and the increased possibility of b ad debts. A survey investigating building merchants' practices in Wales (1984), conducted by questionnaire, reflects some variety in approaching the provision of trade credit, but a relatively high degree of uniformity and lack of sophistication in monitoring systems. Stigitz and Weiss(1988) are the example of papers advancing the idea that banks are institutions specializing suggest that monitoring the behavior of customers over time including repayment of loans and other transactions, provides banks with an information advantage they can use to successfully perform the function of resource allocation in an economy.
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Credit appraisal and risk management of Uttara Bank Limited

Credit appraisal and risk management of Uttara Bank Limited

So as a private bank UBL is trying it’s best to extend their service to the public. UBL, Main Branch provides all kinds of commercial banking services to its customers. Foreign Exchange department is doing well in rending all the services related to the international trade and remittance. Though the advance of Main Branch is high, the Credit department will be in a good position if the Branch able to recover that. General banking is engaged in cash receipt, payment, cheque clearing, opening accounts, deposit scheme, and local remittance etc. So if the UBL wants to continue a profitable business and position itself as one of the top bank in the bank arena then it has to earn the trust of their assets and must be concerned about their commitment to the customers.
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General banking and performance evaluation of Mutual Trust Bank Limited (MTBL)

General banking and performance evaluation of Mutual Trust Bank Limited (MTBL)

As of the year 2012, MTB’s total assets along with subsidiaries had risen by 22.0% over 2011, reaching BDT 93.2 billion. Accompanying this quantitative growth has been an improvement in asset quality, with our careful risk management measure contributing to high quality loans and advances. The NPL ratio of the bank increased by 1.2% to 3.7%, which is still lower than that of the average country NPL. Due to the difficult economic situation, in 2012, our net income reduced by 18.9% going down to 328 million from 404 million in the previous year. A number of successful strategies were taken in the year 2012, including steady growth of our savings and lending businesses, development of more innovative and customer centric financial products.
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Risk Management Practices in Islamic Bank: A Case Study of Islami Bank Bangladesh Limited

Risk Management Practices in Islamic Bank: A Case Study of Islami Bank Bangladesh Limited

Banking industry is one of the most highly regulated industries in the world. Risks, financial and non-financial, are inherent for banks, financial intermediaries, which mobilize fund from surplus unit to deficit unit of an economy. Financial risks consist of market risk and credit risk, whereas non-financial risk include, but are not limited to operational risk, regulatory risk and legal risk (Khan and Ahmed, 2001). Islamic banks, an integral part of a financial system, are not excluded from these risks. The establishment of the Islamic Finance Standard Board’s (IFSB) guiding principles on Risk Management in 2005 reflects the growing importance of prudent risk management in Islamic banking industry. Consequently, the survival and success of Islamic banks depend on the efficiency in which they can manage risk, and thus, effective risk management is critical for maximizing shareholders wealth (Akkizidis and Khandelwal, 2008).
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Credit management of United Commertial Bank Limited

Credit management of United Commertial Bank Limited

The standards of credit relate to safety, liquidity and profitability whereas these dynamic factors are also related to different aspects such as interest or margin, credit spread nature and extent of risk and credit dispersal. In the UCBL Mirpur Road Branch‟s Credit Department, there are 2 (Two) Senior executive officers are working continuously with great effort and teamwork and they have quite efficient skills and talent to perform the jobs in this department. The Bangladesh Bank, Credit Division at Head Office of UCBL and the respective officers of branch in the section control this credit department. The officers believe in teamwork and extreme hard working. In all business dealings, credit officers are guided by the principles of honesty, integrity and safe-guard the interest of the depositors and credit customers of the bank. Credit officers principally perform credit management task by providing loan (credit) to customers and receiving loan back by charging interest along with installments with obeying rules and regulations of the Bangladesh Bank and Head Office as well as maintaining the best business practices in the Bank.
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Credit Risk Management and Financial Performance: A Case of Bank of Africa (U) Limited

Credit Risk Management and Financial Performance: A Case of Bank of Africa (U) Limited

The study was meant to establish the relationship between credit risk management and financial performance of Bank of Africa (U) Ltd. The study adopted a case study approach and adopted both quantitative and qualitative approaches. The study established that the Bank has tried to diversify geo- graphically not only within the country even though the majority of loans are granted to different regions within the country but also into neighboring countries like Tanzania. The bank has over 35 branches within the country among which 21 branches are in the central and 14 branches up country. Strong Credit Appraisal puts the milestones for an effective management of credit risk and gives the firms a competitive advantage in the market place. Hence it can be concluded that credit appraisal defines a bank’s survival and profitability. The value of adjusted R Square was 0.978, an indication that there was a variation of 97.8% on performance of the bank due to changes in client appraisal, credit risk control, and risk diversification at 95% confidence interval. The study recommends that the management of the Bank should continuously assess their risk management practices to see if they are still practical in the face of a continuously changing operating environment, for instance the new regulatory regimes. The products should be tailored towards the local language for easy understanding of the products. The study makes the original contribution by suggesting that there is a positive relationship between credit risk management and performance of the bank. These insights are useful for academic understanding and policy formulation by the decision makers of the bank.
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Evaluation of credit assessment & risk grading management of Dutch-Bangla Bank Limited

Evaluation of credit assessment & risk grading management of Dutch-Bangla Bank Limited

In the light of the assignment the present study has gone through the process involved in lending in different levels and in different modes. Lending is one of the principal functions of the bank as usual which is part and parcel of public money deposited to the Bank. Thus Banks are obviously obligated to manage the risks and to ensure the repayment of the lent money. Sound lending practices therefore, are very important for the trustworthiness, profitability and success of a bank. For the sake of sound lending, it is necessary to develop a sound credit policy and modern credit management techniques equipped with adequate logistic support to ensure that loan/advances are safe and the money will come back within the time set for repayment. For this purpose, proper and prior analysis of credit proposal is required to assess the risk. Credit risk analysis is one of the basic tools of risk management and control, as it identifies the risk factors inherent in lending process of the banks and as quality credit operation deserves critical analysis. For the effective application of CRA, efficient IT based operational software, expertise and proper monitoring of the management. Moreover, willingness and motivation of the concerned individuals are needed. By removing the road block of CRM and CRG implication through the recommendations mentioned in this paper Dutch Bangla Bank Limited can open a new horizon to better assess the risks for lending bankers and will bring the accountability in financial sector.
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Credit Risk Management in Financial Institutions: A Case Study of Ghana Commercial Bank Limited

Credit Risk Management in Financial Institutions: A Case Study of Ghana Commercial Bank Limited

Ghana Commercial Bank Limited (GCB) like all other financial institutions in the country and worldwide have placed a premium on risks in general. It has become imperative to effectively manage risks to build a reputation and to realize operational and strategic objectives. GCB has an established risk division that readily handles risks, credit risk inclusive that surface regularly in their line of work. This presentation summarises information gathered through the conduct of an interview of the staff of the risk division at the head office of GCB in Accra. This interaction gave an insight into the practices, tools as well as the processes of GCB in granting credit, management of default and other relevant matters on credit risk management. Included also, is a summary of responses from questionnaires distributed to customers of the bank to sample their views on a range of issues related to the credit process of the bank.
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Compensation management practices and policies of Mutual Trust Bank

Compensation management practices and policies of Mutual Trust Bank

For the students of BBA program of BRAC University, it is a mandatory requirement to undertake the Internship Program in an organization to complete the graduation and it is counted as a credit course. Therefore, this study is a partial requirement of the Internship program of BBA curriculum so that the students get tuned and have a true feel of the real job world. This study is titled “Compensation Management Practices and Policies of Mutual Trust Bank Limited”. This report is the product of three months long practical working knowledge in MTB. This report includes information of the compensation system of MTB, the overview of the organization and also facilities they offer to satisfy their employees.
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Categorization of loans and credit risk management of Trust bank limited

Categorization of loans and credit risk management of Trust bank limited

Bangladesh is one of the developing countries in the world. The economy of the country has a lot left to be desired and there are lots of scopes for massive improvement. In an economy like this, banking sector can play a vital role to improve the overall social – economic condition of the country. The banks by playing the role of an intermediary can mobilize the excess fund of surplus sectors to provide necessary finance, to those sectors, which are needed to promote for the sound development of the country. The motives of banks are profit-earning. The word ‘Bank’ refers to the financial institution that deals with money transaction. Banks collect deposits at the lowest possible cost and provide loans and advances at highest cost. The spread between the two is the profit for the bank. Commercial banks are primary contributors to the national development of the country. The revenue earning sources of banks are mainly loans and advances. The credit facility can be of two types: funded and non-funded. Funded credit can be expensive for the banks, as the bank has to pay interests. Non-funded credit includes Letter of Credit, Foreign Guarantee, Bank Guarantee, Remittance etc.; these are the main source of income for the foreign exchange business. If a bank can increase its import and export transactions, its profit will obviously reach a higher level, as the costs are negligible. Trust Bank Limited deals with money transaction as well as it deals with the customers. This report represents how the employees of Trust Bank Limited deal with the customers of their bank.
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Credit management policy of Mutual Trust Bank Limited

Credit management policy of Mutual Trust Bank Limited

A wide range of business industries and sectors constitutes the Bank's advance portfolio. Major sectors where the Bank extended credit include steel & engineering, readymade garments, textile, ship breaking, edible oil, sugar, housing & construction, pharmaceuticals, chemicals, electronic & automobiles, energy & power, service industries, trade finance, personal or consumer credit, leasing etc. The Bank continued to support Small and Medium Enterprises (SME) and expended credit facilities to them through its SME Cell. Sectoral allocation of advances reveals a well-diversified portfolio of the Bank with balance exposure in different sectors.
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Credit risk management practices in Sonali Bank Limited

Credit risk management practices in Sonali Bank Limited

A through credit risk assessment is done by analyzing borrower, industry, demand/buyer, historical financial statements etc. Bank reviews documents like loan applications, financial statements, market reputation, CRG, CIB report etc. to investigate credit risk. Manager has to enquiry about loan applicant. Proper documentation is required before sectioning loans. They must conduct necessary KYC (Know Your Customer) part on the customer and Money Laundering Guidelines must be followed. On the basis of investigation the branch manager will prepare a credit report as per format provided by their head office.
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Australian Bank Credit Risk Management: A Regulatory Examination of Provisioning, Capital Adequacy & Stress-Testing

Australian Bank Credit Risk Management: A Regulatory Examination of Provisioning, Capital Adequacy & Stress-Testing

To achieve greater risk sensitivity, Basel II implemented two options for calculating capital requirements for credit risk under the first pillar. The first option is the standardised approach, which assigns varying risk-weights to claims on corporate, banks and sovereign, retail and equity exposure categories. The major development of Basel II was in providing greater risk-sensitivity. Varying risk weights were assigned, based on external ratings based assessments of credit risk. Within each exposure category, there were varying sub-groups reflecting different risk parameters to determine the average probability that a loan to each borrower category would default and the proportion of LGD. Risk weights were prescribed for each risk category based on the rating of the borrower from an externally determined credit-rating agency such as Standard and Poor’s (S&P) and Moodys. For corporate exposures, risk weights vary from 20 per cent to 150 per cent (APS 112 and APG 112) based on risk categories mapped from external ratings. This represented a major development from Basel I which included just four risk weights. This is particularly the case for Australian banks, in which two of the Basel I risk weights covered the majority of bank balance sheet assets (Terry, 2009).
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Credit risk management practices in the banking sector in ethiopia

Credit risk management practices in the banking sector in ethiopia

starts this study to find a solution on the country’s banking industry credit risk management. The researcher evaluates this banks credit risk management practice by the credit risk management principles Basel committee on bank supervision. Because if the banks can manage their credit risk the availability of finance will be better and initiate the investors to invest more. The researcher tailored the methodology well framed and persistent to the objective. Normative natured targeting two specific banks, with a mixed approach. data was planned to be from primary and secondary sources by wise use of purposive sampling. To find better practice that suit the country’s economy and market the author compare two banks and identified their good practices and their gaps, and tip them with best practice of Central bank of Malaysia. The researcher learns there is even lesson to learn from one bank to other more than going outside to get role on providing directives and supervising their performance. The increase and volatility of NPL indicates there is lack of skill and knowledge in the banks to shape their strategy. And the increase in NPL exposes the bank to deterioration of their ofit because NBE obliged them to hold provision by different percent in each classification of NPL. The banks are better to evaluate the payback culture and ability of borrowers rather than relying on red their policy, strategy, procedure and
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Procedure of Letter of credit (LC), Import, Export and Local trade of Mutual Trust Bank

Procedure of Letter of credit (LC), Import, Export and Local trade of Mutual Trust Bank

L/C Application Form is a sort of an agreement between customer and bank on the basis of which letter of credit is opened. MITS Dhaka Center provides a printed form for opening of L/C to the importer. A special adhesive stamp of value Tk.150 is affixed on the form in accordance with Stamp Act in force. While opening, the stamp is cancelled. Usually the importer expresses his decision to open the L/C quoting the amount of margin in percentage. Application form contain Applicant name, Address, IRC number, Shipment procedure, L/C value, Expired place, expired date, trade terms, description of Goods, Payment of charges, what are the documents are needed and other terms and condition. After receiving Application MTBL check the L/C amount written in the form and Head office sanction amount for that particular Company. Finally MTBL match the signature of importer in Pro-forma invoice.
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Equity analysis & loan and advances of Mutual Trust Bank Limited (MTBL)

Equity analysis & loan and advances of Mutual Trust Bank Limited (MTBL)

Mutual Trust Bank Limited (MTBL) is a third generation private commercial bank in the country with commendable operating performance directed by the mission to provide prompt and different services to clients. MTB successfully celebrated its fifteen years of operation. It provides a wide range of commercial banking services MTB has achieved success among its peer group within a short span of time with its professional and dedicated team of management having long experience, commendable knowledge and expertise in conversation with modern banking. MTB is engaged modern banking. The management of the bank is maintaining an efficient portfolio in order to have a healthy worth and retain customer satisfaction.
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