A Study Of Commercial Banks’customer Credit Rating

Currently, the credit risk is still the main risk that China’s commercial banks facing to, credit risks from customers have become one of the most concerned and emergent problems to be solved. Customer credit rating is an important measure for the bank’s credit risk management. As a quantitative identification to customer’s credit risk, credit rating is the primarily basis for commercial bank to develop corporate credit policy. Hence, the quality of credit ratings takes a crucial role in the risk management of commercial banks. The customer credit rating system in China’s commercial banks is far from perfect and still under modification, thus there are important theoretical and practical significance for reducing the credit risk of commercial banks and improving its core competitiveness to study the theory and methodology of Customer Credit Rating.Firstly, this paper draws a theoretical starting point with the bank’s customer credit rating system, introducing the conceptions and features and principles of customer credit and credit ratings as well as their roles in the bank’s risk management. Then introduce the main rating models and rating methodologies at present. A brief summary of related researches home and abroad is also included.Secondly, an overall observation for the customer credit rating system in China Construction Bank(CCB)is put forward to conduct a comprehensive analysis:the first is to the qualitative indicators of the bank’s rating system, especially the selecting and setting description; second is to the bank’s customer rating process, post setting, rating methods and principles; next is the analysis on the pre-work classification for the customers of CCB, choosing different rating models based on the customer rating category; the last is to discusses the advantages and disadvantages of CCB’s rating system on the basis of former analysis. The paper noted its over-reliance on staff experience within the rating process, the weaknesses on rating data acquisition as well as other shortcomings, and further elaborated the main reasons for the above-mentioned problems.Then, the author proposes improvement measures on the existing customer credit rating system in commercial banks. Specifically, these advice include:(a) to establish a Directly Connected Database System, such as the People’s Bank credit information system data-import, customs systems data-import, foreign exchange income and expenditure data-import, tax systems data-import, water and electricity supply systems data-import, ect; (b)to build a False Statements Identification System, selecting the pre-rating data upon the corresponding index, putting down the final rating conclusion in case that there is a problem in the screening company; (c)to optimize the rating status and process, for instance, taking specification with responsibility instead of parallel operations, setting rating re-inspection post, drawing on quarterly re-examination and making restrictions on the qualitative indicator selection of the initially customer rating.Last but not least, this paper takes corporate A as an example, evaluating it with the original rating system from CCB, and then employing the modified rating system. The rating results are compared and contrasted to draw a final conclusion.All in all, in this paper, the author combined the Commercial Bank customer rating data characteristics with its credit risk to improve the corporate rating system of the China Construction Bank (CCB). The research methods combining theory and practice are applied to explore the new modified rating system which matched to the market requirements and risk control. Resolving problems such as information asymmetry and lengthy process that the commercial bank facing to can bring about considerable improvement on the effectiveness of CCB’s credit rating system, so as to further enhance the bank’s asset quality and risk control ability. The desire to provide valuable research and reference for China’s commercial bank’s rating system is proposed.