The Study Of Credit Decision Optimization Based On The Analysis Of Financial Statements

Credit is the main business and source of profit of China’s banks. Under the background of economic recession and interest rates liberalization, interest rate spread is diminishing. Meanwhile, commercial banks are confronting with the situation that interbank competition and the threat of internet finance are getting reinforced. These factors require banks improve both their credit decision and risk management. So far, although the analysis system of customers’ financial statements is widely used by banks, there is still some weakness of this methodology.Analysis system of financial statements during the credit decision of banks is the main theme of this study. The main purpose of the study is trying to discover the methods of improving Bank G’s analysis system of financial statements, in order to make a better credit decision that can reduce the pressure of risk management, enhance the quality of credit assets, consolidate the risk control and encourage financial innovation, by theoretical analysis and practical experience.Chapter 1 is introduction that defines the core concept and issue of the study, and introduces the background, theoretical and practical significance, methodology, and logic of the study. Chapter 2 is literature review. By carding the main theories of credit management, credit decision, and financial analysis, the deficiency and entry points are revealed in this chapter. Chapter 3 is the theoretical basis of financial statements analysis during the credit decision. The definition of credit risk is firstly stated followed by current situation and problems of China’s banks’ credit risk management. Secondly, the classical theories of credit risk management and financial analysis are recommended. At last, the role and effect of financial analysis during credit decision is presented. Charter4 is the current situation and weakness of framework of financial statement analysis during the credit decision. The basic information and framework of Bank G is firstly introduced, focusing on the pattern and detail of credit rating, as well as content of financial analysis. Followed, the shortcomings of credit rating on financial information, analysis method and framework are out listed by reviewing the working experience of the author. Chapter 5 is the optimization of Bank G’s financial statements analysis framework during the credit decision. Some constructive thoughts of improving the current analysis framework are presented firstly. Then, the advantages of the systems improved are exposed, after contrasting with the origin systems used in the same series of cases, which points out the theoretical and practical significance of enhancing the reasoning of credit decision and efficiency of risk management. Chapter 6 is conclusion and suggestion.