Research On ZG Bank's Risk Control Strategy Towards HL Group

Due to the deepening of China's reform and opening as well as the rapid development of the economy,the domestic market is on the highway of involving into the global marketization process,which brings up tough challenges to large-scaled group enterprises whose business and management have been cross-regional,cross-industry and even global.To cope with the increasingly diversified development of large-scaled group enterprises and so as to pace up with the market,on one hand,domestic commercial banks have been keen on to offer plenty of various credit facilities to financially support and foster the development of group enterprises.And on the other hand,credit risk has exposed concentratedly;Credit facilities have been provided to groups over their real demand;and concentration risk has been raised up when one single bank with dominant share for one group financial liabilities,all of which has come out one after another.Through the real case of ZG Bank's overall credit control strategy for HL Group and relevant regulations and policies of the People's Bank(PB)and the China Banking and Insurance Commission(CBIC),this paper provides a deeper vision on the banks'current risk control strategy,credit granting concerns and portfolio allocating theory and illustrates how the ZG bank's implement its unified strategy via centralized credit limit for group but differentiated credit exposure control on individual group members.By the way of analyzing detailed issues about the process of ZG Bank's risk approval and overall control on HL group,the paper suggests improvements on the current model of HL Group's credit risk control.Finally,this paper concludes that to realize effective and efficient overall credit rick control over group enterprises,it is important to stick to overall identification,customer classification,unified management and prudent proper credit line.Besides,to realize the risk control system in a more detailed but creative way,a framework on risk prevention measures for group customers should be constructed throughout all customers,all credit facilities and all institutions of the bank,especially in terms of global identification,centralized risk approval,overall credit granting and centralized control.