Research On Identify And Control Credit Risk Of Group Client In Commercial Bank

Company credit business is a major source of profit that commercial bank created. Based on profit contribution, the earnings from group clients for the banks are far greater than the earnings from the single customer. Because group clients have the advantages of large-scale assets, capital strength, market competitiveness, widely financing channels, Low-cost mass marketing, it is greatly favored by commercial banks and becomes the focuses of business development. However, group clients usually involve more affiliated companies, engage into more frequent relevancy transactions, and have more possibility to exchange the fund between the affiliated companies and to serve as the guarantor for each other. It becomes very difficult for commercial bank to manage the loans. Some group clients also have problems with the management and regulation, violate the business ethics and rules, report the false financial information to get the loans, and do not pay the debt. Those become the major source of non-performing loans for commercial banks. In our commercial bank credit practice, the management of credit risk of group clients has been a problem.First, from a theoretical point of view this article anal sizes the existing credit risk of group clients. From the practical point of view, it also contributes to identify the credit risk by using effective recognition technology.Then, it recommends credit risk prevention according to the different type of credit risk. Especially, it takes a different combination of credit risk controls for different types and characteristics of corporate clients and establishes a targeted, personalized portfolio credit risk control.Finally, two case studies serve as examples of different types of corporate clients. This article aims to provide a proposal with practical value for domestic financial institutions in preventing credit risk.