Credit Risk in China - IBM Business Consulting Services...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: IBM Business Consulting Services ibm.com /bcs Managing Credit Risk for Competitive Advantage in China Richard Bisset, Executive Project manager, Risk and Compliance, IBM Greater China Group. Shanghai, Friday 29 th February,2008 IBM Global Business Services 2 © Copyright IBM Corporation 2007 2008 challenges for Chinese banks 2008 ¾ Improve and enhance standards, systems and processes to avoid bad debt. ¾ Manage data origination, information distribution and reporting ¾ Manage loan origination, NPL management & collection processes ¾ Find a balance between compliance and business performance ¾ Find the equilibrium between centralization and control of branches. ¾ Need to integrate management information and create value added knowledge. ¾ Need to improve level of awareness and understanding of bank staff to improve internal controls and governance IBM Global Business Services 3 © Copyright IBM Corporation 2007 Table of Contents ¡ Credit Risk Management, Data and Economic Capital ¡ Managing the information ¡ The Credit Factory ¡ The Pricing of Credit: The link between economic capital and CRM ¡ Lifecycle Risk Management ¡ Risk Management Issues ¡ Human Capital Management – Risk Management Benefits ¡ Conclusions IBM Global Business Services 4 © Copyright IBM Corporation 2007 Risk Management is the Bridge between Data and Bank Objectives with Shareholder Value as the Target . Risk Mgmt Data Analytics Governance Objectives Tools Data & IT M e a s u r e m e n t s R e p o r t i n g Management Processes Moving from origination function to a risk/ portfolio management function methodology Moving from collecting interest and principal payments to a portfolio total return measurement approach Deliver Shareholder Value Business Front Office/Transaction Commercial Loans, Leases, LoC Consumer Auto, Residential, Cards, HEL Asset Mgmt Mutual Funds, Custodian, Financial Planning Processing Solution Debit, credit, private labels, etc Trading Corp, ABS, FX, Derivatives, etc Others Treasury services, etc Risk Life Cycle View Origination & Acquisition • Deal prospecting • risk assessment • Pricing & funding • Credit approval • Credit booking Risk Mgmt & reporting • Payment remittance • Provision • Past due (30,60, 90d) • Risk migration – NPL, charge-off • Performance – ROA, ROE, P/E, Market Cap Disposition & Recovery • Distressed debt recovery/charge-off Risk Mgmt/Basel Risk mitigation (hedging, securitization, syndication) ) ( ) ( 1 1 1 / ) ) ( ( t t SDP SDP t t SDP Z − − Φ Φ − − Φ − = σ µ IBM Global Business Services 5 © Copyright IBM Corporation 2007 • Credit Risk default risk credit deterioration • Market Risk Interest rate risk Liquidity risk ALM • Operational Risk • Legal Risk • Reputation Risk • Credit Risk PD/LGD/EAD/M • Market Risk VaR, volatility, NII, Operational Risk AMA, SA, BIA • Legal Risk • Reputation Risk • Hedging Credit derivatives (CDO/CDS) Interest rate derivatives •...
View Full Document

{[ snackBarMessage ]}

Page1 / 34

Credit Risk in China - IBM Business Consulting Services...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online