Credit Risk Management Of Shenzhen Joint-stock Commercial Bank

Credit business has always been the most important source of banking profits, but banks, as special enterprises who manage risks, have to maximize profit while minimizing risks. Therefore effective management of credit risk is undoubtedly becoming the primary problem faced by commercial banks.During the economic process in the development of the SAR, Shenzhen banking sector has always been strong momentum for the economic growth there and providing a lot of fund to spur the economy with the Shenzhen Stock Exchange main board, small board and the GEM. Among many types of commercial banks in Shenzhen, joint-stock commercial banks occupy a crucial position. As is well known that Shenzhen economic development is inseparable from the small and medium enterprises. As at the end of 2010, there are more than 30 million SMEs in Shenzhen, accounting for 99% of the total number of enterprises. For a long time, the Shenzhen joint-stock commercial banks have been focusing on developing small and medium customers, creating favorable financial environment for their business development and addressing their fund needs. However, under the impact of the global financial crisis, many SMEs are getting in trouble. And many hidden non-performing loan dangers are theating the joint-stock commercial banks in Shenzhen. Meanwhile, the external macroeconomic factors, such as the overall economic fluctuations, the negative currency policy and Shenzhen special economic structure, are also leading joint-stock commercial banks into serious credit risk.Considering my current working condition and the availability of data, this study picked Shenzhen joint-stock commercial banks as the entry point. According to Shenzhen specific SMEs features and financial environment, this paper focused on the analysis of the causes of credit risk management in joint-stock commercial banks in Shenzhen, the management shortcomings in credit risk management and the corresponding recommendations for credit risk management of Shenzhen joint-stock commercial banks.This paper is divided into four parts and the main contents are as follows:The first part is an introduction, presenting the background and significance of this topic, the current study status home and abroad, and the basic framework and ideas of this study. The second part describes the meaning of credit risk, and then concentrates on theinternal and external causes of joint-stock commercial bank in Shenzhen. Then the paper comes up with specific measures in response to internal and external credit risks of Shenzhen joint-stock commercial banks,according to Shenzhen unique economic and financial development characteristics. The third part lists the current practices of managing credit risks in Shenzhen joint-stock commercial banks and research into the four main shortcomings behind the existing practice of credit risk management, such as credit risk early warning mechanism is imperfect, flawed assessment mechanism and so on.The fourth part made policy recommendations so as to prevent and control credit risk in joint-stock commercial banks.