Credit Risk Management in Banking
Learn about how Credit risk is managed by lenders, the various financial tools and Income earned through Credit is one of the major sources of revenue for Bank / FIs. However, Credit defaults, Credit frauds seriously affect the profitability and solvency of any Financial organisation.
A Credit analyst need to be equipped with knowledge of various aspects of Credit Risk management.
This Course helps decision making in Credit areas and enhances the confidence of a Credit Analyst.
About this courseSkip About this course
The learners will gain insights on the essential elements of the process adopted by Banks for Credit Risk Management.
To understand the challenges posed and will be equipped with necessary knowledge.
The Course further ventures into major domains of Credit Risk Management; like Selection of borrower, Reading Financial statements, using Financial Management tools e. g. Ratio Analysis, Fund Flow analysis, Cash flow Analysis.
The Course discusses on various tools, practices, models related to Credit.
It will also be of value to existing bankers who want to understand the various facets of Credit Risk Management and aspire to be a Credit Analyst or Credit Underwriter.
At a glance
What you'll learnSkip What you'll learn
- Role of Credit Risk Management in lending decisions.
- Basel Norms
- Selection of an obligor.
- To read a Balance sheet to mitigate Credit risk.
- To understand Cash Flow, Fund Flow and Ratio analysis
Using Credit Risk management for Strategic decision making, managing Credit Portfolio and understanding Credit Rating System .
The course is structured in six modules, with each module catering to a separate risk domain.
* About the course
* Brief Objectives
Module 1: Principles of Risk Management:
* Introduction to Credit Risk Management:
* Classification of Credit Risk – Credit Spreads
* Credit Risk assessment tools
* Types and mitigants of Concentration and Transaction Risk Management
* Micro & Macro Business environment
Module 2: Basel Accords and its implications; Credit Risk Loss Distribution;
* Credit Risk Models Basel I/II/III/IV Guidelines
* Approaches of Credit Risk
* PD, LGD, EAD, CEL
* External Ratings
* Credit Scoring and Retail Credit Risk Management
* Credit Derivatives
Module 3: Credit process, credit selection
* Credit Analysts Skills/Role
* Credit risk in selection of borrower
Character, Capacity, Collateral, Capital and Condition ***
Counter Party Credit Risk. ***
Module 4: * * Application of Credit Risk Measurement: Reading financial Statement and Economics of Credit __**
* Basic Accounting Principles and Concepts
* Accounting Standards
* Financial Statement Analysis, Profit and Loss account / Balance Sheet
Module 5: Credit Risk management – Mitigation tools
* Financial Assessment Tools
* Trend Analysis
* Ratio Analysis
* Cash Flow Statement
* Fund Flow Statement
Module 6: Strategic credit decision making, management of Credit Portfolio and Credit Rating System
* Selection of Collateral
* Negotiation for Covenants
* Spread Risk, Portfolio Credit Risk, Structured Credit Risk
* Various Credit Risk Models,
Risk Adjusted Return on Capital & Return on Risk Weighted Assets ***
Capital Asset Pricing Model (CAPM), Weighted Average Cost of Capital