Study On The Credit Risk Management Of Group Clients For Agricultural Bank Of China, Gansu Branch

Risk management is the lifeline of financial institutions, and the credit risk management is the most important category of risk management in that the domestic commercial banks' asset structure is dominated by credit assets. Meanwhile, as the group enterprises are the primary clients that the commercial banks compete for, it is of great significance to reinforce the credit risk management against the group clients, especially in the context of current financial turmoil, because the credit risks of group clients are characterized by diversity, complexity and emergency, which will lead to excessively high concentration of risks and pose serious challenges to the commercial bank's management.In terms of credit risk management, a family of theories have been established, including asset transfer theory, expected income theory, fund transformation theory and risk diversification theory etc, which constitutes a sound basis for risk prevention and control in the banking system.Agricultural Bank of China(ABC),Gansu Branch is constantly emphasizing the identification and prevention of credit risk, in an effort to explore the appropriate mechanisms and methods to tackle the credit risk problems accruing to the group clients. However, there still exist a series of problems such as excess credit offer, mutual guarantee and fund appropriation due to the peculiarity of the group clients and systemic defects as well as technical shortfalls within the bank. It seems that how to implement effective credit risk management against group clients to reduce the NPLs become a formidable problem to be addressed in a prompt way.As a staff of ABC, Gansu Branch, the author has been highly concerned about the credit risk management issues associated with group clients, and benefit greatly from the MBA program in Lanzhou University, where the author has been exposed to advanced economic theories and frequent business communications. As a result, a set of theoretical concepts and management measures toward the credit risk management against group clients have come into being, which include constructing comprehensive risk management system, establishing identification mechanism against related enterprises, early warning of potential risks, perfecting credit risk management means and so on. As evidenced by the current practice, the measures mentioned above are playing active roles in the credit risk management within the ABC, Gansu Branch, and become good reference for other local commercial banks as well.