Research On Credit Risk Assessment Of Bank Of Communications D Branch

According to the annual report of the China Banking Regulatory Commission,in recent years,the non-performing loan ratio of China's commercial banks has continued to rise.While the main source of income for commercial banks is their interest on loans,the increase in the non-performing loan rate means that the proportion of loans that banks may not be able to recover is higher in total loans,it also means that the possibility of commercial banks suffering losses is increasing.Hence strengthening the credit risk management of commercial banks has become a top priority for the development of bank operations,meanwhile accurate and effective credit risk assessment can better identify credit risk,which plays a crucial role in the bank's credit risk management.Because China's capital market is not yet perfect,while credit risk assessment of commercial banks usually requires a large amount of historical data as a basis to better reflect the characteristics of loan company information and financial data and to improve the effectiveness and accuracy of credit risk assessment.Therefore,compared with foreign countries,which have already had many mature experiences in credit risk assessment,China's research in credit risk assessment is still in the development stage at present.This paper is based on the research of Bank of Communications D Branch,analyzes the status of its credit risk assessment,and mainly studies the credit rating system of its creditors.According to the existing problems in credit risk assessment of D Branch,combined with the characteristics of its location,this paper designed a suitable credit risk assessment indicator system.The indicator system analyzed eight aspects of the company in total,including the solvency,the operating capacity,the profitability,the development capacity,the management status,the financial statement quality,industry and policy,and the corporate repayment willingness,composed of 19 financial indicators and 13 non-financial indicators.Then the paper analyzed and compared several common credit risk assessment modeling methods,including multivariate clustering analysis,multiple regression analysis and some non-statistical modeling methods,and found out the most applicable model,the Logit model.Combined with the indicator system,the principal component analysis and the construction of the Logit model were performed,using the historical data of the D branch,then used the simulation data of the inspection group for testing and compared with the credit rating of the original credit object to verify the validity and applicability of the Logit model.It is hoped that the bank's ability to manage and control credit risk can be improved,and the credit risk assessment model to provide a better basis for the bank to make credit decisions.