Research On Risk Control Of Financial Leasing Companies

Financial Leasing,which is also known as equipment leasing,is a kind of better transaction mode in the new stage of modern market economy development.Because it suits the requirement of modern economy development,financial leasing progresses promptly,and gradually becomes the second largest financial instrument after bank credit.What's more,financial leasing has played an important role in meeting the needs of domestic capital and the introduction of foreign advanced technology and equipment.Financial leasing is a typical high risk industry.In the past development process,the frequent risk outbreaks of financial leasing companies has become a constraint to the development of financial leasing industry.In this context,whether the financial leasing companies can identify risks and control it effectively,and whether companies can establish an effective risk control system,has become an important place to determine whether the domestic financial leasing industry can develop healthily and promptly.China Development Bank Leasing(CDBL)is founded in 1984 and it has registered capital of 8 billion RMB,which has the largest registered capital and assets in the financial leasing industry.As the best company in the industry,CDBL takes the lead in the use of a comprehensive risk management system from October 2010,including in-advance control,in-progress control and post-action control.CDBL conducted IPO in Hongkong in July 2016.But due to the reasons for the high non-performing loan rate,which is affecting its performance of its operation,CDBL received a cool IPO reception eventually.For CDBL,how to strengthen the risk control management has become the most important factor to improve the operating status and enhance the overall competitiveness.Based on the information asymmetry theoretical,this paper applies the CAMELS analysis method and comprehensive risk management framework to analyze the risk status and risk control situation of CDBL.The current company's risk management is discussed from three aspects: business access control,project evaluation control and post rental management control.And the reasons of management mistakes are traced from the view of management consciousness,management system and management means.At last,this paper concludes the problems existed in the risk control of CDBL: in business access control,misjudged China's economy development and failed to change the access system in traditional manufacturing and commercial real estate business;in project evaluation control,over relied on the ability of key manufacturers or dealers to repurchase and over loosen the additional security terms;in post rental management control,failed to adjust the frequency of rental inspection in accordance with the change of the industry and there are some serious defects in the commercial real estate rental management such as unclear ownership and excessive fluctuation of value in estate.In order to solve the problems of CDBL,this paper puts forward some suggestions on the improvement of risk control from three aspects: in terms of business access control,timely adjust the business access system in accordance with the changes of the macro economy and avoid the business which have major uncertainty;in terms of project evaluation control,make the control of project review more strict and adjust the credit model of key manufacturers;in terms of post rental management control,adjust the frequency of rental inspection in according with the industry situation,focusing more on monitoring commercial real estate leasing business.Then,in order to ensure the smooth implementation of the proposed improvement,the company should strengthen the study of macroeconomic and industry conditions,and pay more attention to the risk control culture.Finally,this paper summarizes the above analysis ? suggestions and the related safeguard measures,and puts forward the conclusion,which can provide practical guidance for large financial leasing enterprises with similar background.