Study On Credit Risk Management Of State-Owned Commercial Bank

At present, indirect finance is the main channel of china finance; loan profit is important resource of banking profit. Accordingly, credit risk management is the core of commercial bank risk management. However, there still have some shortcomings in credit risk system, measure, incentive-restain and non-performing loans (NPLs) disposal of state-owned commercial banks (SOCBs), they have bad effect on credit risk control. With the strengthening of banking international competition, SOCBs must improve credit risk management, take effective methods to control credit risk and dissolve bad loans. On the basis of risk management theory, the paper analyzes the internal and external cause of credit risk through banking, enterprise and operation environment three aspects. Moreover, the paper puts forward two ways to control credit risk: perfecting inner credit risk management system, improving outer operational environment; it point out to dispose existing unhealthy loans by asset management company (AMC) and commercial bank. At last, the paper carry out synthetic evaluation measures of credit risk management. This paper is divided into four parts and includes six chapters. The first part is chapter one. It introduces the research background, purpose, meaning ,train of thought, as well as innovation points; evaluates the newest research fruits of credit management which is the foundation of the study. The second part is chapter two. It is the foundation of the study. It introduces the present conditions of SOCBs, by way of NPLs, origination structure, system and incentive-restrain of credit management. The reason of credit risk lies in three aspects. The part is the flat and evidence of part three . The third part includes the chapter three and chapter four. The part analyzes the ways of controlling the produce of new bad loans and lessening the existing unhealthy loans. Combining the cause of NPLs and foreign experience, chapter three points out that improving inner credit risk management system and improving outer operational environment are key ways to control new NPLs. Chapter four points out AMC and SOCBs are the main channels to diminishing bad loans. The forth part includes the chapter five and chapter six. Chapter five evaluates the performance of credit risk management, it indicates the new method of performance evaluation through combining Balance Score Card(BSC), Analytic Hierarchy Process(AHP) and fuzzy synthetic evaluation. Chapter six generalizes the whole paper. Conclusions: 1. The study makes clear that credit risk of SOCBs mainly originates from banking itself, corporation and business circumstances. Therefore, credit risks can be kept away via consummating bank'property right system, perfecting credit management system and optimizing society conditions; NPLs can be cut down though reinforcing banking dissolving mechanisms and reforming AMC operational mechanism, surroundings. 2.The paper introduces a new train of thought about performance evaluation of SOCBs. Making using of basic principle of BSC, the study establishes the index system of credit management performance evaluation that includes twenty indexes and lets bank managers know the evaluation elements. Basing on this, the weight of evaluation indexes can be confirmed though AHP. AHP can decrease the effect of subjective elements. The thesis integrates the AHP and fuzzy synthetic evaluation to value the performance and put the way into practice. Demonstration indicates that the new evaluation method is effective and practicable.