Credit Risk Analysis On Group Customers Of Bank Of China Jilin Branch

According to the "28" theory, 20 percent of customers bring 80 percent of the profits, 80 percent of customers bring 20 percent of profits, group customer for commercial banks has always been the most important Source of profit, due to the special nature of group customer, have also led to the special nature of credit. Group general customers are generally larger, capital strength and competitive market, a higher credit rating, they have the greater attraction to commercial banks, credit to the customer focus groups have become a trend, these have made commercial banks are facing credit risk of customers Increased dramatically. The 1997 Asian financial crisis, once again proved that the financial system itself is a lack of effective blocking and resolve the customer's risk of complete function. On the other hand, in the great enterprise of the thirst for funds, the size of the credit increased rapidly in bank, structural deterioration of the growing number of non-performing assets, bank loans increased risk.July 31, 2007, the People's Bank of China Shanghai Branch for the first time promulgated, "Chinese Regional Financial Stability Report," the report pointed out that rapid growth in the medium and long term loans, loans hade continued to focus on large customers and industry focus. Data show that more than one billion credit large-scale enterprise groups of customer loans, as well as new loans total loans ratio continued to rise, the concentration of credit to further improve, the situation of the Bank of China Jilin branch is equally Serious.This article from the group customer credit in the existence of credit risk, detail elaborated on the group customer credit risk in the form of performance, and analysised of the causes of the group customer credit risk and the problems existed about credit risk management. Such as group customers credit are unique, over-long credit and credit problems associated with the risk of corporate finance, corporate financial information issues, security issues, And From the start of these problems, Jilin branch of the Bank of China credit risk arising from the reasons for doing the analysis, To find out the crux of the problem lies. To be directed against a number of reasons of the group customer credit risk, this paper bring up strategies and suggestion.Before going into the group customers credit risk in the form of the performance, First introduce the characteristics and the special nature of the group customers about credit. Because of the complexity of financial management, the main financing, the organizational structure of complex transactions associated with each other and the hidden security features such as the existence of its credit with the bank made special. Bank of China Jilin Branch group customer overall credit analysis showed that the loans are more concentrated, more hidden risks. Since then, from credit and over-long corporate credit, corporate finance potential risks associated with a greater distortion of financial information and enterprise security chain too long, and other aspects of the Group analysis of the customer's credit risk performance. Of these, Investment in the expansion of credit-induced expansion is the emphasis and difficulty of the bank's credit risk to control, And group customer contribution is low with a degree of risk high, right that the group's clients an integrated mining contribution not enough, business is limited to simple traditional loans and settlement demand. The existence of related party transactions, break the traditional business and individual creditors and credit order, its internal control over the improper conduct of the interests of the creditors posed a threat to increase the bank's risk control more difficult. Corporate financial information, financial data is the comprehensive reflection of the activities, and through the financial statements data reflect the business activities and results. The corporate financial information real is the basis of bank's credit risk control. Enterprises applying for loans to banks before the "three" and related materials, in order to obtain the loan, customers often do statements will be flawless. Because of its advantages, Group customers do not worry about credit, Banks sometimes do not identify the authenticity of the information, loan in the shadow of the halo successful complete, and thus are potential risks. Debt chain too long, if it is interrupted, with the proliferation of debt and the negative effects of amplification.For credit risk arising from these channels, we should analysis its causes. Imperfect credit system is the root cause. From a system point of view, the lack of branch-level on the group customer's credit limit regulations, the define standards are different for identifying the group customers , To identify companies associated with a means of a simple, And can not meet the customer's credit risk management requirements and a lack of science, a unified group of customers credit rating standard. The existence of these shortcomings is the existence basis of risk. Management issue also can not be ignored. Group operating trans-regional enterprises and the unified credit are contradictory. The mechanism of credit to examine and approve adopt the pattern of grade levels and authorized management , its branches respectively credit to the members of the group of enterprises according to the principle of territoriality, the bank's internal management is difficult to adjust cross-client operating risk control requirements, as well as the responsibilities are difficult to definite. A group customer's value at risk is often comprehensive and dynamics, it is difficult to score on the use of simple to determine. As a result of the index system and the different calculation methods, make the evaluation to customer's risk assessment are different. Asymmetric information and being not share the information is one of the reasons why the businesses can apply for loans to many banks. The banking has been faced with the problem of asymmetric information, in this case, the banks due to fear of adverse selection and risk, show a appearance of "loan-to-fear", or run out of cash to the large group customers. As a direct result of not sharing inter-bank information, the money of a number of banks run into one enterprise, exacerbated by the concentration of credit funds, and followed by a decline in credit quality. Bank of China Jilin branch about the credit risk identification and measurement existed a lot of problems. Qualitative analysis of credit risk management is small, qualitative analysis is more; Static analysis is more, dynamic analysis is less; Partial analysis is more and less global analysis. Bank of China assets have not yet established a credit history-related databases, and the province independent of the domestic commercial credit rating agencies in the initial stage of development, the Bank of China internal credit rating system is not yet mature, not to build their own high-level quantitative credit risk measurement models and take advantage of these models of credit risk management.To the reasons of these problems, this paper brings up related strategies and recommendations. These include: First, the establishment of a rich and accurate information base; Second, the establishment of review and Supervision system; Third, accurate measurement of the credit line; Fourth, improve the survey and analysis before loan; Fifth, to use for reference abroad advanced Experience, introduce of credit assets portfolio management. On the basis of the establishment of a credit risk management information system, to establish the inter-bank information sharing mechanism, At the same time, to establish the internal audit and external oversight as a protection. Accurate calculation of the credit line is the basis of credit risk management, so the paper proposes to revise the method of measurement of credit limits, and gives a specific calculation formula and a table estimates. In fact, the level of credit risk in the loan has been clear, therefore, Application the methodology and technology before loan to avoid credit risk is the key. Credit risk after the guard, it is recommended that the introduction of advanced international banking credit portfolio management. International banking for credit risk measurement and analysis technology has been widely used,"the new Basel Capital Accord"for the international banking credit risk management framework and a new concept, and encourages banks to establish and develop an internal rating models and the supporting computer system.