China's Agricultural Bank Of Credit Risk Control

After twenty years reform, the financia1 system has been set up in thefinancia1 service industry in China, which is composed of the center bankas the 1eader, state--owned and stock commercial bank as the backbone,co1laborating with various financia1 institutions. However, stress mustbe p1aced on the serious difficu1ties and prob1ems confronted by ourfinancia1 service industry. It not on1y influenced the conunercial creditassets safety, but a1so the who1e financial service industry deve1opmentand the continuous growth of nationa1 economy.As a state--owned cofnmercia1 bank, the Agricu1tura1 Bank of china (ABC)p1ays an important ro1e in rura1 financing activit ies as to maintain rura1financia1 order and direct the economic deve1opment. The proportion ofnon--performing assets in tota1 assets maintains at high leve1, for ABChas 1ong been doing business with township and vi 11age enterprises (TVES)in which the number of profitab1e c1ients is quite smal l, and a1so becauseof ABC's taking up 1f many po1icy--re1ater financing tasks and poormanagement. There is great potentia1 of risks in ABC. ABC is the on1y onedeficit bank among the four stated--owned conunercia1 bank. so, it isnecessary to study the credit risk management of ABC.The paper focuses on ABC credit risk management, striving forabstracting the va1uable so1ution in the view of commercia1 banks. Theprob1em of the agricu1tura1 bank of china at the present and in its pastis Andy 1ed in this paper at the site of its deve1oping situation. First,the paper ana1yzes the commercia1 credit risk in definition; Second, itexp1ores the cause of the formation of the credit risk and the effect inthe financial service industry as well as the whole economy; Then it forecasts and estimates the credit risk by quantitative and qualitative analysis, studies the measure and methods for risk management macroscopically and microscopically, the paper stated deeply the case of ABC should make its position dear .under the new situation and explore new solutions to finish the transformation from a specialized bank to a modern commercial bank. To step up efforts on the linkage between rural and urban areas with the rule that "to look further beyond rural areas without giving up the efforts spent on them" . ABC should enlarge its urban business scope under appropriate situations while serving the development of agriculture and rural economy well, and to dilute the stock of no performing assets by using the increment of good assets. The paper applies the methods of project appraisal into the practice, by the static and dynamic measurement, strict credit permission mechanism and normalizing the credit operation procedure, to prevent and control the credit risk from its source.