Research On Credit Risk Management Of X Branch Of SPDB’s Corporate Customers

Credit risk is one of the most important risks faced by commercial banks. It has always been a hot topic in study. The Chinese commercial banks started late. So the level of credit risk management is lower and the use of management methods is less in spite of the continued innovation. The credit risk management of our commercial banks is still limited to traditional expert analysis method, little use of modern risk management model, such as KMV model, Credit Metrics model, Credit Risk+model and so on.The Chinese commercial banks often use modern quantitative analysis model to manage the credit risk at the head office level. But the loan officers at the branch level are more accustomed to determine the customers’credit risk by their own experience on the basis of customers’ financial indicators. So the management of credit risk adds more human factors. The experts full of working experience in commercial banks play an important role in the credit risk analysis for a single customer and affects banks’credit risk management mechanism to a certain extent. If commercial banks can’t analyze the risks faced by its assets reasonably, it will lead to decline in asset quality and the rate of bad debts will rise. It will also affect the bank’s reputation and operating results ultimately. Commercial banks will be unable to meet the requirements of the regulatory agencies.In recent years, the Chinese real estate market and the stock market have been continuously depressed. The overcapacity of traditional industries is larger and larger, such as iron and steel, coal, cement and so on. Inflation and private lending have brought additional operating pressure to the whole industry. Manufacturing is the most directly affected by the whole economic environment. It’s more difficult to recovery accounts receivable. Companies’cash flow is tight or even broken. The companies’operating risks increased, so the banks’ credit risks increased. So existing credit risk management approach faces new challenges, and pivotal experts face more demands. It requires that the experts have to continue to improve existing customer credit risk analysis tools to a more reasonable judgment and propose measures to avoid risks.In this paper, corporate customers of X Branch of SPDB are the objects of study. The expert analysis method is the research focus.The purpose is to make recommendations for X branch’s existing credit risk analysis and management methods. After years of development, X Branch’s credit customers show different characteristics from the past; diversification becomes more common. The ultimate goal for companies is to improve profitability and the ability to resist risks.Facing complex economic environment, X Branch of SPDB should improve existing credit risk management methods and the effectiveness of expert analysis methods and enhance the accuracy of the experts’ credit risk determination for the diversified customer. Knowing more about your customers is the key. The experts should do surveys as comprehensive as possible, choose appropriate customers, and cultivate potential customers, so as to solve the credit risk caused by customers’ subjective reasons radically.This paper is divided into six parts. The first part is the purpose, significance and methods of studying. The second part is the theory of commercial banks’ credit risk management. The third part is the analysis about X branch of S Bank’s credit risk management status, finding out the good and bad. The fourth part is taking the development road of the client A for example and analyzing the problems exposed by diversified business customers affected by a variety of factors and the credit risk management issues of X branch of S Bank during the credit business. The fifth part is some suggestion in the economic down cycle for the credit customer’s credit risk management,combined the client A’s case. The last part is the summary.