北師大版玩具教學(xué)課件

1、北師大版玩具PPT教學(xué)課件451245123535北師大版玩具PPT教學(xué)課件4321543215Credit Risk ManagementEnhancing Your Bottom LineEbrahim ShabudinManaging Director Deloitte & Touche LLPThe AFP 23rd Annual Conference New OrleansNovember 3-6, 2002Credit Risk ManagementEnhanciCredit BackgroundThorough identification and accurate measur

2、ement of credit risk, supported by strong risk management can help improve the bottom line.An uncertain and volatile economic environment significantly impacts this ability.The desire to grow and turn in outstanding results has a tendency to put pressure on the checks and balances within businessesC

3、redit BackgroundThorough idenValue PropositionCredit plays a critical role in “selling” products and servicesExpands revenue opportunities with creditworthy, incremental customersUtilizes innovative structures to support business relationshipsEffective credit risk management limits credit losses and

4、 provides stable cash flows and earningsMarketplace rewards companies exhibiting earnings and cash flow stability with higher P/E multiplesMarketplace penalizes credit induced volatility and “surprises”Raises questions about quality of managementValue PropositionCorporate Credit RiskCompanies are ex

5、posed to significant levels of credit risk emanating from different sourcesAccounts Receivables Other Notes ReceivablesBuyer and Franchise FinancingWith Recourse FinancingProject FinanceStructured TransactionsLeases with RecourseDerivatives Exposures FX, Interest Rate Risk, Commodities etc.Collatera

6、l RiskParent or Third Party Guarantees Commercial and Standby Letters of CreditNote also that Critical Suppliers to the company may pose specific credit riskCorporate Credit RiskCompaniesDSO Impact an exampleActualCompany APeer AverageQ3 A/R$295,396,000Q3 Sales$261,201,000 DSOs =124*51.3Hypothetical

7、D CashDSOs51.3Q3 Sales$261,201,000 Q3 A/R =$122,002,230+$173,393,770 * Equals 295.4M/261.2M x 90(or number of days in sales period)DSO Impact an exampleActualCCredit as a FacilitatorCredit risk management is important Credit is a facilitator of business growth and performanceHigh business margins te

8、nd to attract lower quality clients and therefore higher risk profile to manageClients (buyers) may be concentrated in selected industries and provide limited portfolio diversification opportunityPoor credit risk management resulting in negative impact to bottom-line is heavily penalized by marketsC

9、redit as a FacilitatorCredit Credit Strategy & Risk ToleranceSpecific Quantifiable ObjectivesManagement Review MethodologyCredit Strategy Statement and Risk ToleranceCoordination with Business PlanThe business strategies and objectives drive the establishment of creditpolicies and procedures. Measur

10、ement and reporting as well as the use of current technologies enhance credit decision-making and improve risk management. The entire process is continually re-evaluated and improved.Credit Strategy & Risk ToleranCredit Risk Areas to ConsiderCredit PolicyCredit Approval AuthorityLimit SettingPricing

11、 Terms and ConditionsDocumentation: Contracts and CovenantsCollateral and SecurityCollections, Delinquencies and WorkoutsExposure ManagementAggregationControlPeriodic Account ReviewsPayments/AgingCredit ConditionCompliance with Covenants, TermsTechnology/ReportsTransactions/ BookingsRisk-adjusted Re

12、turnSales ChannelsRisk StrategyUnderwriting StandardsCredit ApplicationAnalysisBusiness/ IndustryFinancialCreditCredit Scoring and RatingsOrigination/AssessmentAdministrationMonitoring/ControlRiskManagementPortfolio ManagementConcentrationDiversificationAllowance for Bad DebtsRisk MitigationObjectiv

13、esType of ExposureInstruments or MethodsCredit Risk Areas to ConsiderCValue CreationBusiness Performance MeasuresOrganizations need a rigorous set of measures to support continuous improvementPerformance-based management utilizes metrics that measure actual performance against predetermined threshol

14、ds. The thresholds are established taking into account the organizations strategy, operatingenvironment and process controls.The measures drive value creation and should support problem identification and correction.Business StrategySystemsOperationsFinancePerformance ManagementValue CreationBusines

15、s PerformSales channelsContracts & DocumentationCredit analysisCredit limitPricing & termsCredit AnalysisCredit DecisionsCollectionsCREDIT POLICYCollateral acceptancePortfolio managementFinancial analysisDisposal / Risk mitigationCollateral managementCustomer managementExposure measurementManagement

16、 reportingExposure aggregationRecoveriesCredit scoringRisk ratingRISK MANAGEMENTCredit Risk Managements Inter-related ActivitiesComplianceOriginationReportingTransactionsSales channelsContracts & DocuCredit Policies & Procedures Analysis & RiskManagementGovernance, Controland ImplementationMeasureme

17、ntMethodologiesTechnology & Data IntegrityCredit Strategy & Risk ToleranceA complete and coherent risk management framework contains the following elementsCredit Risk ManagementCredit Policies & ProceduresA New ParadigmA new business paradigm had evolved: causing a lack of reliance on good fundament

18、al analysisThe idea that stock market values would continue to go up indefinitelyIncreasingly competitive, complex and volatile market placeHigher than expected actual debt burdensExtensive reliance on unrealistic future cash flowsFailures in corporate governanceQuestionable personal and corporate e

19、thicsA New ParadigmA new business pImplications for Corporate GovernanceCurrent organization structures to be revisitedClarity around roles and responsibilitiesNeed for honesty, integrity and independence (self-regulation)Technical expertise of people and strong management processesImproved disclosu

20、re requirementsImportance and implementation of sanctionsIncreased legislation and compliance requirementsImplications for Corporate GovFoundation: Credit Rating and Underwriting StandardsRisk Identification, Origination, Credit Administration, etc.Short Term: Managing Expected LossRisk Identificati

21、on, Transaction Structuring, Approval & Pricing Decisions, Reserving, etc.Near Term: Managing Economic Capital / Credit VaRPortfolio Risk Concentration, Risk Based Limits, etc. Vision: Managing Risk/ReturnPricing decisions,Performance measurement, business and customer segmentation, compensation, et

22、c.A business model view of Credit Risk Infrastructure componentsCredit Risk Management Strategic VisionFoundation: Credit Rating and Development StagesFoundation Stage includes application of risk identification methodologies, risk scoring or rating systems and strong underwriting standards Basic St

23、age tends to include managing on a transactional basis by evaluating specific attributes such as structuring, collateral and pricing Advanced Stage represents managing on a portfolio basis including aspects such as concentrations, correlations and diversification The Sophisticated Stage includes app

24、lication of highly developed measurement techniques for transactions and portfolios, supported by decision-making relating to segments or businesses against established hurdle rates.Development StagesFoundation SCredit Risk ClarifiedCredit risk is defined as the risk of loss or potential loss result

25、ing from: Default in contractual obligations by a customerMigration in condition and ratingDeterioration in performance Credit risk includes both an expected (predictable) and unexpected (volatile) loss component. Credit Risk ClarifiedCredit rBusinesses have to contend with Expected and Unexpected L

26、ossesExpected LossesAnticipatedCost of doing businessCharged to provisionsCaptured in pricingRelatively easier to measureAssessing expected loss includes determining exposure, default probability and severityUnexpected LossesUnanticipated but inevitableMust be planned forCovered by reservesAllocated

27、 to businessesDifficult to measureAssessing unexpected loss requires making qualitative judgments around potential volatility of average lossesBusinesses have to contend witCredit Risk Management ExplainedAlthough credit risk may be difficult to measure it is important to estimate and manage What do

28、es Credit Risk Management mean?It represents an institutions ability to properly identify and evaluate the potential risk of default in payment of obligations of customersIt incorporates the firms ability to effectively manage and control this exposure in a way that is consistent with the institutio

29、ns business strategy, risk appetite and credit cultureCredit Risk Management ExplainImportant Building BlocksEffective Credit Risk Management requiresClear origination and underwriting standards A strong corporate and credit cultureHighly developed risk measurement techniques Ability to recognize an

30、d cover expected and unexpected lossesPricing commensurate with risks undertakenMethodologies to assess net profit contributions by customers and appropriate business segmentsProper allocation of capital and management resourcesIn order to:Improve overall corporate performance, measured by a higher

31、EPS or P/E ratio (or market value)Important Building BlocksEffecCredit Policy and ProcessCredit Policy should be clear and conciseCredit Underwriting Standards must be developed and included in policyCredit Processes should be reasonable and allow quick response to clientsHealthy balance between sal

32、es and credit approval should exist and be respectedCredit Policy and ProcessCrediRisk MonitoringExposure must be complete and currentRegular reporting and updating of clients payment performance Minimum annual reviews of clients should be performedFinancial conditions should be regularly assessedRe

33、quired action must be initiated and follow up must take placeRisk MonitoringExposure must bContract Terms and DocumentationContract negotiations must take place at the right level in the organizationAppropriate approvals must be obtainedInternal or external legal departments must document completely

34、Terms and conditions should be understood and compliance mechanism put in placeExceptions must be reported and managed urgently to resolutionContract Terms and DocumentatiRisk Rating System EffectivenessCredit Scoring is generally used to “risk rate” homogeneous portfoliosHighest applicability is in

35、 consumer and retail portfoliosSome advanced scoring systems are being migrated for use in rating “middle market” clientsSuch models are only as good as the underlying assumptionsInternal credit rating systems are difficult to assess and are often not independently validatedClient relationship may i

36、nterfere with objective assessment of risksRating criteria usually a matter of practice rather than written policyRatings are not consistent over timeQualitative credit assessments often lag current market informationInstitutions often assume a mapping with external ratings in order to quantify cred

37、it riskRisk Rating System EffectiveneEffective Risk Rating SystemsSufficient granularity of risk rating categoriesAccurate and timely assignment of ratings Clear and consistent application of default definitionPeriodic calibration, triangulation and validation of risk ratings Accurate identification

38、 of migration of transactions and portfolios (as reflected by upgrades and downgrades in ratings) Effective Risk Rating SystemsSCredit Evaluation: Financial FactorsGet the information you need to make a full analysisSome information will need to be cross-checked and obtained on a regular and timely

39、basisBe constructively cynical: new business models are difficult to pull offBe cognizant of delaying tacticsNumbers dont tell the whole story!Credit Evaluation: Financial FCredit Evaluation: Qualitative FactorsEvaluation of subjective factors is often times more important than the numerical analysi

40、sPeople make a business: visions, values and strategies are only words unless people implement themManagement, industry, product, geography, competition etc. all influence results and must be properly assessedAnalysis-paralysis may lead to wrong decisionsCredit Evaluation: QualitativeArt and Science

41、 of JudgmentGetting access to the best clients and all the relevant information is a challengeEnsuring proper analysis is done requires a strong corporate cultureUtilizing qualified resources both internally and externally enhances the resultsOften the lack of the will to act is what causes high los

42、sesArt and Science of JudgmentGetConcluding CommentsCompanies that measure and manage credit risk in a pro-active manner will benefit from a favorable risk profile resulting in Higher revenueLower lossesImproved efficienciesHigher EPS, P/E ratios and market valuesConcluding CommentsCompanies tConclu

43、ding CommentsRisk Assessment and Limit ManagementCredit Infrastructure and Portfolio ManagementCredit Analytics SupportCredit Technology EnablementCredit QualityCredit UnderwritingRisk Rating System EffectivenessCounterparty and Portfolio LimitsOrganizational Structure Policies and ProceduresTechnol

44、ogy Selection and ImplementationProblem Asset ManagementRisk Rating CalibrationTransaction Pricing, Structure and SupportDefault Probability and Recovery CalibrationCredit Reserve MethodologyRisk Based Pricing ModelsRisk Adjusted Return AnalysisPortfolio Value MeasurementCredit Risk MeasurementCredi

45、t Performance Scorecards Internal Software External Vendor SoftwareConcluding CommentsRisk AssessAppendix: Business Proposal ChecklistBusiness Proposal SummaryCustomer, Rating, Legal Status, Line of BusinessGuarantor, if anysameCollateral, if anytrue value explainedOther Support, if any. Legal or mo

46、ral onlyThe Transactionrisks and mitigationAmount, purpose, terms and conditionsSources of repayment clearly identifiedClient payment history and relationshipAppendix: Business Proposal ChAppendix: Business Proposal ChecklistRationale and AnalysisCustomer, Guarantor, Collateral, SupportFacility Desc

47、riptionAmount, purpose, tenor, pricing, terms, conditions, covenants, restrictions etc.Consider affect on above e.g. new leverageFacility Rating?Repayment CapacityFuture cash flow, conversion of assets etc.Consistency with Credit Strategy and PolicyConfirm, and identify any exceptions to policy, underwriting standards, or processRisk adjusted return acceptability Appendix: Business Proposal ChAppendix: Business Proposal ChecklistClient Re