Credit risk and ways to reduce it. Credit risk: the main ways of minimization - Borovskaya M.A. Modern methods of minimizing credit risks
Introduction ………………………………………………………………………… ..3
1. Essence of credit risk and method of minimization ……………………… ..5
1.1. The importance of credit risks for banks. Types of credit risks ……… 5
1.2. Ways to reduce credit risks …………………………………… ..8
2. Organization of accounting for operations with credit risks and their minimization ………………………………………………………………… ... 13
2.1. Documents used to organize credit risk accounting …………………………………………………………………… ..… ... 13
2.2. Accounting for operations with credit risks …………………………………… 15
2.3. Accounting entries for operations with credit risks and their minimization …………………………………………………………………… 17
3. Problems of reducing credit risks in modern conditions and ways of solving them ………………………………………………………………………… ..20
3.1. Analysis of the loan portfolio ……………………………………………… 20
3.2. Loan portfolio risk assessment ……………………………………….
Conclusions ……………………………………………………………………… 26
List of used literature ………………………………………… ..... 29
application
Introduction.
The credit and financial system is one of the most important and integral structures of a market economy. Historically, the development of the banking system and commodity production has gone parallel and closely intertwined. Being at the center of economic life, banks mediate ties between depositors and producers, redistribute capital, and increase overall production efficiency. Credits play a special role, turning, in fact, into the main source that finances the national economy with additional monetary resources. With the transition from a command-and-control to a market economy, the monopolized, state-owned banking structure is becoming more dynamic and flexible. The banking system is based on private and collective property and is focused on overcoming competition and making a profit.
In the process of conducting active lending operations with the aim of making a profit, banks are faced with credit risk, that is, the risk of the borrower not paying the principal and interest due to the lender. Each type of credit transaction has its own reasons and factors that determine the degree of credit risk. In particular, it can arise when the financial situation of the borrower deteriorates, unforeseen complications arise in his plans, uninsured collateral, lack of the necessary organizational qualities or experience of the manager, etc. These and many other factors are taken into account by bank employees when assessing the creditworthiness of the enterprise and the collateral offered as collateral. The tasks of improving the functioning of the credit mechanism put forward the need to use economic methods of credit management, focused on observing the economic boundaries of credit. This will prevent unjustified credit investments, ensure timely and full repayment of loans, and reduce the risk of non-payment.
The theme of this work: "Credit risks and methods of their minimization" - is extremely relevant. Any activity, whatever it may be, contains a certain amount of risk and randomness of the most varied nature. Any economic activity is subject to uncertainty associated with changes in the market environment, i.e. to a large extent with the behavior of other economic entities, their expectations and their decisions. Therefore, interest in this topic will never decrease, and the techniques will be expanded and supplemented. Most of all, banks need information about the creditworthiness of enterprises and organizations: their profitability and liquidity largely depend on the financial condition of clients. It is possible to reduce the risk of lending operations on the basis of a comprehensive study of the creditworthiness of the bank's clients, which at the same time will allow organizing lending taking into account the boundaries of the use of the loan. Based on the studied material, this topic is quite widely disclosed and is of great interest for deeper study, especially in the aspect it is widely disclosed and is of great interest for a deeper study, especially in the aspect of the effectiveness of methods for assessing the creditworthiness of enterprises.
The aim of the work is to study the essence of credit risks using the example of the activities of a commercial bank, and conduct risk analysis. The main tasks of the work are reduced to defining the types of credit risks, determining the methods for their assessment and highlighting the most effective methods for minimizing credit risk used in the banking system of modern Russia. To study this goal, the following methods were set:
study the essence of banking risk;
consider the problems of reducing credit risks in modern conditions and ways to solve them.
1. Essence of credit risk and method of minimization
1.1. The importance of credit risks for banks. Types of credit risks.
The success of a commercial bank depends on how efficiently it uses the available funds, investing them in various assets. The most common way to use bank resources is to provide loans. Studies of bank failures around the world indicate that the main cause of bankruptcies was poor asset quality (usually loans). Thus, the acceptance of credit risks is the basis of banking, and their management has traditionally been considered the main problem of the theory and practice of banking management.
Credit risk can be defined as the uncertainty of the creditor that the debtor will be able and will continue to intend to fulfill its obligations in accordance with the terms and conditions of the loan agreement.
This condition can be caused by:
first, the debtor's inability to create an adequate future cash flow due to unforeseen adverse changes in the business, economic and or political environment in which the borrower operates;
secondly, uncertainty about the future value and quality (liquidity and the possibility of selling on the market) of the collateral;
thirdly, the decline in the business reputation of the borrower.
In banking, the following levels of credit risk should be distinguished:
credit risk under a separate agreement - the probability of losses from the default by the borrower of a specific loan agreement,
credit risk of the entire portfolio - the amount of risks for all agreements of the loan portfolio.
Accordingly, for each level, different risk assessment and risk management methods are used.
Credit risk is the risk that a third party will not meet its credit obligations to a credit institution. The risk of this type of risk arises when carrying out loan and other operations equivalent to them, which are reflected in the balance sheet, and can also be of a balance sheet nature.
Credit risk factors are the main criteria for its classification. Internal and external credit risks are distinguished depending on the scope of the factors; on the degree of connection of factors with the activities of the bank - credit risk, dependent or not dependent on the activities of the bank.
Credit risks dependent on the bank's activities, taking into account its scale, are divided into:
fundamental (associated with decision-making by managers involved in managing active and passive operations);
commercial (related to the area of \u200b\u200bactivity of the Central Federal District);
individual and aggregate (the risk of the loan portfolio, the risk of the aggregate of credit transactions).
Fundamental credit risks include risks associated with collateral margin standards, making decisions on granting loans to borrowers who do not meet the bank's standards, as well as being a consequence of the bank's interest rate and currency risk, etc.
Commercial risks are associated with credit policy in relation to small businesses, large and medium-sized clients - legal entities and individuals, with certain areas lending activities bank.
Individual credit risks include the risk of a loan product, service, operation (transaction), as well as the risk of the borrower or other counterparty.
Risk factors of a credit product (service) are, first, its compliance with the needs of the borrower (especially in terms of the term and amount); second, business risk factors arising from the content of the credited event; third, the reliability of sources of repayment; fourth, the sufficiency and quality of collateral. In addition, credit risk factors can arise from operational risk, since in the process of creating a product and its type - services - technological and accounting errors in documents, as well as abuse, can be made.
The factors of the borrower's credit risk are its reputation, including the level of management, performance efficiency, industry affiliation, professionalism of bank employees in assessing the borrower's creditworthiness, capital adequacy, balance sheet liquidity, etc. Borrower risks can be provoked by the credit institution itself due to the wrong choice of the type of loan and credit conditions.
The listed credit risk factors can be grouped as external and internal.
The group of external factors includes: the state and prospects for the development of the country's economy as a whole, monetary, foreign and domestic policy of the state and its possible changes as a result of state regulation. External credit risks include: political, macroeconomic, social, inflationary, sectoral, regional, the risk of legislative changes (for example, the creation of regulatory favorable conditions for the provision of certain types of loans and restrictions on others), the risk of changes in the interest rate. A credit institution cannot accurately predict the level of interest, but only take into account, when managing credit risks, additional reserves to cover possible losses, both direct and latent.
Internal factors can be associated with both the activities of the lending bank and the activities of the borrower.
The first group of factors includes: the level of management at all levels of the credit institution, the type of market strategy, the ability to develop, offer and promote new credit products, the adequacy of the choice of credit policy, the structure of the loan portfolio, temporary risk factors (with a long term credit transaction, the probability of a change in interest increases. , exchange rates, income on securities, interest margin, etc.), early withdrawal of a loan due to non-fulfillment of the terms of the loan agreement, personnel qualifications, quality of technology, etc. It should be noted that the above external factors of credit risk are also associated with the activities of the bank - they determine the conditions for its functioning. However, these connections are different in nature: external factors do not depend on the activities of the bank, and internal ones do.
- Voznaya Olga Alexandrovna, bachelor, student
- Bashkir State Agrarian University
- CREDIT RISKS
- CREDITOR
- CREDITING
- BANKING RESOURCES
The bank's lending activity is one of the fundamental criteria that distinguishes it from non-bank institutions. lending operations are the most profitable item in the banking business. Due to this source, the bulk of the net profit is formed. At the same time, non-repayment of loans, especially large ones, can lead to bankruptcy. Therefore, credit risks are the main problem of the bank, and its management is a necessary part of the strategy and tactics of development of any commercial bank.
- Consumer lending as the most demanded banking operation
- Issues of lending to agricultural producers in the Russian Federation
- The role of microfinance organizations in economic development
Credit operations are the most profitable item in the banking business. At the same time, the structure and quality of the loan portfolio are associated with the main risks to which the bank is exposed in the course of its operating activities (liquidity risk, credit risk, interest rate risk, etc.). Among them, the central place is occupied by credit risk (or the risk of non-repayment by the borrower of the principal debt and interest on the loan in accordance with the terms and conditions of the loan agreement). The profitability of a commercial bank is directly dependent on this type of risk, since the value of the credit part of the bank's asset portfolio is largely influenced by non-repayment or incomplete repayment of loans issued, which in turn affects the bank's equity capital.
Bank managers need to be aware that it is impossible to completely eliminate credit risk. Moreover, interest on loans issued is essentially a payment for the risk that a commercial bank assumes when issuing a loan. The greater the credit risk, the higher, as a rule, the interest rate paid on this loan.
There are several proven ways to minimize the credit risk of a commercial bank.
- Diversification of the loan portfolio - the essence of the diversification policy is to provide loans to a large number of independent clients. In addition, the distribution of loans and valuable papers by terms (regulation of the share of short-, medium- and long-term investments depending on the expected changes in the market situation), by the purpose of loans (seasonal, for construction, etc.), by the type of collateral for various types of assets, by the method of setting the interest rate for a loan (fixed or variable), by industry, etc.
- Conducting a comprehensive analysis of potential borrowers and ranking them according to the degree of reliability - in the process of such an analysis, it is especially important to analyze the financial condition of a potential borrower according to the balance sheet and profit and loss statement. Since, in the context of a constant increase in demand for credit resources over their supply, increasing the efficiency of the procedure for selecting several borrowers from their common queue becomes the primary task of the credit policy of any bank.
Lender examination of forms financial statements enterprises are recommended to be carried out in four directions:
- analysis of solvency (degree of provision of stocks and costs by sources of their formation);
- analysis of the company's creditworthiness (its susceptibility to loans, the ability to fully pay off its obligations on time with liquid funds);
- analysis of financial independence (the ability to independently and effectively pursue financial policy);
- analysis of the structure of the debt (determination of the type of policy of the heads of the enterprise according to the structure of loans received)
Financial analysis requires reliable, constantly updated financial information, both received directly from the client (verified financial statements), and available in the credit archive (information on delays in debt repayment and other violations) or from external sources (from banks with which dealt by the borrower, his business partners, from the current press, etc.).
In practice, the most important types of credit security include surety, guarantee, pledge of goods, securities, movable and immovable property, insurance policy, assignment of claims and accounts by the borrower to the bank (cession).
By means of a surety agreement, the guarantor undertakes an obligation to the lender (bank) to pay, if necessary, the debt recognized by the borrower (it is in this form that the surety is most often found in credit transactions).
Guarantee - a written obligation of the guarantor to pay a certain amount for the guaranteed person upon the occurrence of a guarantee event. Bank guarantees are especially popular. It differs from a surety in that claims and objections of the borrower to the lender are not taken into account within the framework of the bank's guarantee obligation.
Credit insurance involves the transfer of the risk of non-repayment to the insurance organization; it is formalized by an insurance policy, which can be accepted as a loan security. In this case, all insurance costs are borne by the borrower. In case of non-repayment of the loan, the bank has the right to expect the insurance company to reimburse the lost loan in accordance with the conditions specified in the insurance policy.
Assignment (cession) is a document of the borrower (assignor) in which he assigns his claim ( accounts receivable) to the lender (bank) as security for the loan repayment.
With the development of high technologies both in the world and in Russia, the case of hacker attacks on credit institutions has become more frequent, recently many credit organizations of our republic have been subjected to hacker attacks, as a rule, this process begins with the infection with the Troyan virus, the bank client program, then when passwords from the program are received, the bank is sent payment order from the client with a requirement to transfer money to the account specified in the document, after the operation, the money is cashed in ATMs in different cities of Russia. This is one of those risks for which it is impossible to be prepared, it is necessary to introduce a new rule, verbal confirmation by the client of any operation carried out on his current account, i.e. clerk responsible for checking accounts legal entities, should not have the right to conduct it without confirmation of payment. Thus, there are indirect problems that directly affect credit risks.
Bibliography
- Zapolskikh Yu.A. Credit risk and the main ways to minimize it. Economy and society. 2014. No. 2-2 (11). S. 126-128
- Money, credit, banks // Oleinikova I.N.
- Larionova I. Banking risks // Money and credit. - 2001. - No. 12.
- www.bankir.ru - "Bankir.ru"
economics, entrepreneurship and law
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Creative economy
Journal of Economics, Entrepreneurship and Law
minimization of credit risks of commercial banks as a component of their economic security
Idrisova E.A. 1
This article examines the economic and legal aspects of lending to legal entities. To solve modern lending problems, a systematic and integrated approach is proposed for use. In addition to improving the bank's existing credit policy in the field of lending to legal entities, it is proposed to introduce additional conditions that promote mutually beneficial cooperation between borrowers and commercial banks, thanks to which it is possible to maintain the economic security of a credit institution.
KEY WORDS: collateral, lending to legal entities, minimizing credit risks, interest rate, regulatory framework, economic security
Minimizing the credit risks of commercial banks as a component of their economic security
1 The Ural State University of Economics (USUE), Russia
introduction
For credit institutions the priority is given to lending to legal entities, because these clients are more stable and solvent, which positions them as the most profitable segment for cooperation. Currently, there are problems in the structure of lending to legal entities associated with recent macroeconomic events, which led to the emergence of negative economic conditions in the territory. Russian Federation... This fact had a negative impact on the activities of commercial banks in lending operations. A large number of companies with revenues of more than 300 million a year suffered heavy losses in their activities. In this regard, after a short time, they did not have
Ural State University of Economics, Yekaterinburg, Russia
ANNOTATION:
the ability to pay off your accounts payable to banks and counterparties. This led to a decrease in the rating of these companies in the bureau. credit histories... Commercial banks are now pursuing rigorous procedures to minimize credit risks.
The relevance of the work is explained by the fact that credit risk management determines the economic stability of the banking system, which is especially necessary in an unstable economy.
The purpose of the study is to determine the ways to improve the lending activities of commercial banks in relation to lending to legal entities, contributing to the minimization of credit risks in terms of cooperation with this market segment.
All existing measures aimed at minimizing credit risk are based on a well-developed lending system for both individuals and legal entities. Banks work according to the usual scheme: a questionnaire, a package of documents, in their absence - an institution in the database. Then a check by the security service, a credit assessment, after which a decision is made to grant or refuse to issue a loan. Lending requires more responsibility, and, consequently, the number of indicators to be checked increases, and the requirements are tightened. As a result, the credit check of legal entities takes longer. However, each of the stages of lending to legal entities can be improved (Beloglazova, Who11ue1 $ kaua, 2011).
The article studies economic and legal aspects of crediting of legal entities. To solve modern crediting issues, we suggest a systemic and integrated approach. In addition to improving the current bank "s credit policy in the sphere of crediting of legal entities, we propose to introduce additional terms conducive to mutually beneficial cooperation between borrowers and commercial banks, thanks to which it is possible to maintain the economic security of a credit institution.
KEYWORDS: pledge, crediting of legal entities, minimization of credit risks, interest rate, regulatory framework, economic security
Received: 21.11.2016 / Published: 30.12.2016
© Author (s) / Publication: CREATIVE ECONOMY Publishers For correspondence: Idrisova E.A. (idrisova_elmiraOO0mail.ru)
Idrisova E.A. (2016) Minimizatsiya kreditnyh riskov kommercheskikh bankov kak sostavlyayuschaya ikh ekonomicheskoy bezopasnosti. Ekonomika, predprinimatelstvo i pravo. 6. (4). - P. 437-443. doi: 10.18334 / epp.6.4.36585
The creditworthiness of a commercial bank client is the ability of the borrower to fully and on time pay off his debt obligations (principal and interest) (Launtin, Wallen $ eva, 2013).
Today, the borrower has a need to provide more and more time to repay its loan obligations during the crisis (this period is approximately four to ten years). Therefore, banks give preference to attracting clients who can fully secure the loan with property (collateral). Any property, including things and property rights (claims), with the exception of property withdrawn from circulation, as well as rights, the assignment of which to another person is prohibited by law, can be the subject of a pledge (Belova, 2009). According to the bank's standards, this property can be:
Real estate (garages, parking lots, apartments, villas, houses, land),
Road transport units,
Various special machinery and equipment,
Some banks include specific collateral (property rights),
Gooods at the work.
When calculating the minimum amount of collateral, two quantitative indicators are taken into account: the amount of the principal debt and the total interest to be paid for the loan, expressed in rubles. In order to reduce the risks of a loan, credit organizations use collateral ratios in analytics. These ratios have different meanings for each collateral category. If real estate is accepted as collateral, then this coefficient is 0.9; for vehicles varies by type of car: if the service life is up to three years, then 0.7, from four to nine - 0.6, from nine - 0.5, if the period is more than twenty years, then such transport is not accepted as collateral. The Bank's Collateral Assessment Department evaluates the rest of the collateral with a low coefficient of up to 0. Until 2013, the borrowing client had the right to independently choose the type of currency in which the commercial bank lent him funds. However, now banks do not run the risk of issuing loans and placing deposits in foreign currency... On the present stage the development of the banking system, there was a difficulty with the fact that borrowers who purchased loans in foreign currency cannot answer for their obligations. At the time the loan was issued, the dollar against the ruble was significantly lower than now, but with a decrease
Idrisova Elmira Albertovna, Master's student (idrisova_elmiraOO0mail.ru)
QUOTE ARTICLE: _
Idrisova E.A. Minimization of credit risks of commercial banks as a component of their economic security // Economics, Entrepreneurship and Law. - 2016. - Volume 6. - No. 4. - P. 437-443. doi: 10.18334 / err.6.4.36585
the ruble exchange rate previously received loans have risen in value. In these conditions, the credited organizations were unable to pay off their obligations, and many went bankrupt (Pozdyshev, 2015).
One of the most pressing problems of lending to legal entities is also the relatively large size of commission payments. The commission for crediting loan funds to the settlement account of the organization in some banks must be paid when signing a loan agreement, in other banks it is included in the principal amount and averages 1-2% of the loan amount.
In banking, insurance (at the expense of the client) of collateral, guarantors and other types is no exception. Basically, insurance occurs with the same clients of the bank - insurance companies that place deposits. In all banks, the loan rate is calculated taking into account: risk margins (they are identified from the analysis of revenue for the year and quarterly), business load for the client, the value of the market analysis of collateral, the form of collateral, etc. In banks, interest rates have different values \u200b\u200bwith a large interval ... The banks that have a specification for the analysis of certain business segments (80%) set high interest rates (JSC Rosselkhozbank), the rest of the banks - at the optimal level (Sberbank of Russia, VTB Bank, Primorskiy Social Bank Primsotsbank).
Those banks that develop relatively low loan rates set higher requirements in relation to the client. This is reflected in the list of documents provided, as well as in the high requirements for security. These credit institutions impose increased criteria for the financial and economic condition of the client (including the persons who will act as guarantors in the transaction) and its analysis. Therefore, it becomes difficult to obtain money... Credit banks request the entire base of the client's contracts for the analyzed period, studying the carry-over balance of payments for the products that have been shipped. If the borrower is engaged in the provision of services, then the indicator of the services provided is analyzed. The analysis includes the study of the number of buyers on an ongoing basis to the total volume of the customer base under contracts, the number of master contracts to the total customer base under contracts, the quantitative indicator in rubles of transactions under contracts that are being signed.
Solving credit problems requires a systematic and comprehensive approach. Currently poorly developed the legislative frameworkregulating the relationship between commercial banks and legal entities in the process of lending to the first of the latter. Therefore, the main directions of improving the corporate lending system should be:
Development and publication of regulations to determine the financial condition of the borrower;
Determination of the list of documents for accurate confirmation of management accounts (original invoices: to provide information on costs
there; contracts for the supply and purchase of products, etc.), as well as the summation of the obtained quantitative information with the consolidated statements of income and expenses of the organization from all settlement accounts (by requesting account statements 51);
Creation and implementation of matrices (assessment of the components of expected losses by statistical analysis the probabilities of the transition of loans between groups of delay), which determine: on the one hand, the degree of probability of the client's behavior and, on the other hand, the bank's possible actions in the event of a particular situation. In this case, the main (typical, basic) scenarios of the possible development of the situation after the borrower receives a loan should be developed;
Minimization of the use of express analysis of the position of a potential borrower.
In addition, the legislation should establish requirements for the interest rate close to the established unit. Thus, a corridor of 24-26% per annum can be established, which should include lending rates. Banks provide loans to the borrower at 15-25% per annum, and the lending organization itself has the ability to reduce or increase the interest rate, fulfilling the following conditions: when opening a current account with a bank, the rate is reduced by one and a half percent or for transferring the turnover of funds to the bank, opening a salary project and other. In this regard, additional conditions can be established. These conditions can be:
Provision of property security and guarantors - rate reduction by 0.5%;
Repayment of the previous loan line of credit - by 0.1%.
Using the above methods, banks are able to effectively structure a transaction and rank clients by risk. Thus, the credit institution minimizes losses by reducing the amount of overdue debt.
conclusion
The study of minimizing credit risks of commercial banks as a component of economic security within the framework of the presented article allows us to draw the following conclusions.
It has been determined that under the conditions of the modern system of bank lending to legal entities, credit risks associated with it arise, negatively reflecting
on the economic security of credit institutions. In order to minimize credit risks, commercial banks should develop and implement a more advanced credit policy, be able to qualitatively determine the financial condition and creditworthiness of a potential borrower, and apply reasonable values bank interest, give preference to lending to legal entities capable of providing property or property rights on security.
The article establishes that, when solving lending problems, it is necessary to apply a systematic and comprehensive approach. As measures to increase the economic security of banks when lending to legal entities, the author made the following proposal, it is necessary to legally establish requirements for the interest rate close to the established unit. Thus, a corridor of 24-26% per annum can be established, which should include lending rates.
Thus, in order to minimize the credit risks of commercial banks, the following measures were proposed within the framework of the article: development and implementation by commercial banks of a more advanced credit policy, improving the quality of determining the financial condition and creditworthiness of a potential borrower, using reasonable bank interest rates, giving preference to lending to legal entities capable of provide property or property rights on security.
sources:
1. Lavrushin O.I., Valentseva N.I. Banking. / textbook - 10th ed., rev. and add. - M .: KNORUS, 2013 .-- 800 p.
2. Belova A.V. Methodology for analyzing the creditworthiness of borrowers of a commercial bank // Banking Review. - 2009. - No. 3. - p. 1-3.
3. Beloglazova G.N., Krolivetskaya L.P. Banking organization of the activities of a commercial bank. / Textbook for universities. - M .: Yurayt Publishing House, 2011 .-- 422 p.
4. Masyukova L.V., Ponomareva N.A. Some aspects of the development of bank lending to small and medium-sized businesses // Contemporary problems and prospects for the development of financial and credit spheres of the economy of Russia in the XXI century: collection of scientific articles / under scientific. ed. prof. Yu.V. Rozhkova. Khabarovsk, 2015 .-- p. 216.
5. On banks and banking activities: Federal Law dated 02.12.1990 No. 395-1 (as amended and supplemented, entered into force on 09.02.2016). Consultant Plus. [Electronic resource]. URL: http://www.consultant.ru (date of access: 15.09.2016).
6. Official website of the Central Bank of the Russian Federation. [Electronic resource]. URL: http://www.cbr.ru/credit/ (date of access: 09/08/2016).
7. Official website of the information portal banki.ru. [Electronic resource]. URL: http://www.banki.ru/banks/ratings/index.php (date accessed: 09/10/2016).
8. The official website of the Finam holding. [Electronic resource]. URL: http: // www. finam.ru/analysis/profile041CA00007/default.asp (date of access: 09.09.2016).
9. Pozdyshev VA Banking regulation in 2015-2016: major changes and prospects // Finance and credit. - 2015. - No. 12. - p. 3-8.
Beloglazova G.N., Krolivetskaya L.P. (2011). Bankovskoe delo organizatsiya deyatelnosti kommercheskogo banka M .: Izdatelstvo Yurayt. (in Russian).
Belova A.V. (2009). Metodika analiza kreditosposobnosti zayomschikov kommercheskogo banka. Bankovskoe obozrenie. (3). 1-3. (in Russian).
Lavrushin O.I., Valentseva N.I. (2013). Bankovskoe delo M .: KNORUS. (in Russian).
Masyukova L.V., Ponomareva N.A. (2015). Nekotorye aspekty razvitiya bankovskogo kreditovaniya malogo i srednego biznesa Modern problems and prospects of development of financial and credit spheres of Russian economy of the XXI century. 216. (in Russian).
Pozdyshev V. A. (2015). Bankovskoe regulirovanie v 2015-2016 godakh: osnovnye izm-eneniya i perspektivy. Finance and credit. (12). 3-8. (in Russian).
Tutorial. Taganrog: Publishing house TRTU, 1999.169s.
TOPIC 4. FORMATION BY THE BANK OF A CREDIT POLICY
4.2. Credit risk: the main ways to minimize
Credit operations- the most profitable item in the banking business. At the same time, the structure and quality of the loan portfolio are associated with the main risks to which the bank is exposed in the course of its operating activities (liquidity risk, credit risk, interest rate risk, etc.). Among them, the central place is occupied by credit risk(or the risk of non-repayment by the borrower of the principal debt and interest on the loan in accordance with the terms and conditions of the loan agreement). The profitability of a commercial bank is directly dependent on this type of risk, since the value of the credit part of the bank's asset portfolio is largely influenced by non-repayment or incomplete repayment of loans issued, which affects the bank's equity capital. Credit risk is not a "pure" internal risk of the lender, as it is directly related to the risks that are assumed and borne by its counterparties. Therefore, the management of this risk (minimization) involves not only an analysis of its "internal" component (associated, for example, with the degree of diversification of the loan portfolio), but also the analysis of the entire set of borrowers' risks.
Bank managers need to be aware that it is impossible to completely eliminate credit risk. Moreover, interest on loans issued, in fact, is a payment for the risk that a commercial bank assumes when issuing a loan. The greater the credit risk, the higher, as a rule, the interest rate paid on this loan.
There are several proven ways to minimize the credit risks of a commercial bank.
1. Diversification of the loan portfolio.The essence of the diversification policy is to provide loans to a large number of independent clients. In addition, the distribution of loans and securities is carried out by maturity (regulation of the share of short-, medium- and long-term investments depending on the expected changes in the situation), as well as by the purpose of loans (seasonal, for construction, etc.), by type of security for various types of assets, by the method of setting the interest rate for a loan (fixed or variable), by industry, etc.
In order to diversify, banks carry out credit rationing - establish floating credit limits or credit ceilings for borrowers, in excess of which loans are not provided, regardless of the level of interest rates.
2. Conducting a comprehensive analysis of potential borrowers and ranking them in terms of reliability... In the process of such analysis, it is especially important to analyze the financial condition of a potential borrower according to the balance sheet and profit and loss statement, since in the context of a constant increase in demand for credit resources compared to their supply, increasing the efficiency of the selection procedure for several borrowers becomes a priority task of the credit policy of any bank ... There are no more or less formalized methods of such analysis. Therefore, taking into account the experience of American banks, this gap can be partially filled by proposing a basic scheme for such an analysis. It assumes that the bank optimizes the allocation of loan resources and selects the most reliable borrowers from many potential borrowers, i.e. he ranks them, assigning each a loan priority rating (hereinafter - the borrower rating).
This rating consists of the exact value of the integral index of the borrower and the grouped value of the integral class of the borrower. As a result, each of the enterprises belongs to one of four classes.
The lender, in the overwhelming majority of cases, issues loans in the form of money (a resource whose liquidity is 1), and the company then exchanges them for liquid and profitable ones. economic resources... And since the structure of the firm's assets is inertial, the creditor should first of all be interested in the structure of the enterprise's property, depending on the liquidity of its individual items.
It is recommended that the lender study the financial reporting forms of the enterprise in four areas:
· Analysis of solvency (degree of provision of stocks and costs by sources of their formation);
· Analysis of the company's creditworthiness (its receptivity to loans, the ability to fully pay off its obligations on time with liquid funds);
· Analysis of financial independence (the ability to independently and effectively pursue financial policy);
· Analysis of the structure of the debt (determination of the type of policy of the heads of the enterprise according to the structure of the loans received).
Solvency indicators.In modern economic literature there are a large number of definitions of solvency. Most often, the solvency at any point in time is defined as the payment surplus / shortage between the available liquid resources and the obligations to be paid at that time. However, it makes sense to study the essential features of the firm's solvency and consider solvency as an external effect of the provision of stocks and costs by sources of their formation, and insolvency, respectively, as their lack of security. For the purposes of the analysis carried out by the lender, it is sufficient to fix four levels of solvency, depending on the values \u200b\u200bof three basic coefficients:
1) ratio of supply of stocks and costs by own sources of formation (own circulating assets)
where P 1 - own circulating assets (table 4.1);
З - the amount of stocks and costs;
2) ratio of supply of reserves and costs with own and long-term borrowed sources
,
where P 2.1 - long-term borrowed sources;
3) ratio of supply of stocks and costs of main sources
where P 2.2 - short-term loans and borrowings.
Solvency assessment (f1) is carried out in four classes.
The first class includes all enterprises for which the coefficient is greater than or equal to one. The financial condition of such enterprises can be characterized as absolutely stable. All expenses for the formation of stocks and costs are covered by our own working capital.
The bank will naturally be interested in how long this situation will last. The calculation of financial stability in days is made according to the following formula:
,
where T is the value of the analyzed period (for a year 365 days);
N - funds from the sale.
The second class corresponds to normal restrictions
.
The financial condition of the company is normal. The amount of reserves and costs corresponds to the capabilities of the enterprise and is formed at the expense of its own and long-term borrowed funds. The stability margin of this type in days is calculated as
.
The third class of solvency is assigned to an enterprise if
The financial condition of the enterprise is unstable. The amount of inventory and costs is excessive. Their formation is carried out by attracting not only their own and long-term borrowed funds, but also through short-term loans and borrowings. The stability margin of this type in days is calculated as
The fourth class is assigned to an enterprise if all three factors are less than one. It includes enterprises with a critical financial condition, enterprises overloaded with immobile stocks. The sources of formation of stocks and costs are not enough to service material working capital. The company is on the verge of bankruptcy.
Creditworthiness indicators. This is the core block of the analysis of the financial condition of the company, conducted by the bank. Creditworthiness - the ability of an enterprise to "accept" a loan without prejudice to be overloaded with borrowed funds and to pay off on it in full and on time.
The essence of the analysis of creditworthiness is to calculate a system of norms that make it possible to determine which assets with different periods of implementation, and, consequently, and in what period, the enterprise can pay off the obligations already assumed, if the structure of its finances (which also indicates the effectiveness of its activities) is not will change.
FROM the system includes three norms.
1. The rate of cash resources shows what share of short-term debt the company can pay off immediately:
,
where AP 1 - highly liquid assets;
ОВ 1 - short-term liabilities.
2. The liquidity ratio characterizes the payment capacity of the enterprise for short-term loans and accounts payable subject to timely settlement of accounts with debtors:
,
where AP 2 is all liquid assets.
3. The coverage rate characterizes the enterprise's ability to pay off the most urgent liabilities by selling not only quick-selling assets, but also material working capital.
,
where AR 3 - mobilized assets;
OB 2 - all explicit obligations of the firm.
Four levels are recorded for each of these indicators. The intervals between them will be called classes.
Let us define in detail the class of the rate of monetary resources (f2). The first class includes all enterprises that satisfy regulatory restrictions:
The second class is defined in between. The third class is satisfied with the conditions< 0,2 и 
... For the fourth grade, the last restriction is back, that is.
The class of the liquidity rate (f3) is similar:
I class\u003e 1;
Class II;
III class<0,2 и если предполагается изменение нормы за период;
IV class<0,2 и если изменение нормы за период отрицательно.
Coverage class class (f4):
I:\u003e \u003d 3;
II:;
III:<2 и если предполагается изменение нормы за период;
IV:<2 и если изменение нормы за период отрицательно.
In order to evaluate the results of the analysis for this bank, we will introduce an intermediate indicator - an assessment of creditworthiness, which we calculate using the formula:
,
where i - classes K4, K5, K6;
INT is the rounding operation to the integer.
Class I... The company is able to pay off all urgent obligations at the expense of mobile funds, that is, in the shortest possible time, including at least 70% for the statement of funds.
Class II... By attracting quick-mobilized assets, an enterprise can repay from 80 to 100% of urgent liabilities, including from 20 to 70% by direct transfer of funds.
III class... The attraction of all fast-moving assets allows to cover less than 80% of short-term debt, which means significant difficulties in settlements with creditors. However, the company has the opportunity to restore its solvency.
IV class... The enterprise is under the threat of crisis and bankruptcy, a tendency towards deterioration of its financial condition is clearly expressed.
Analysis of the financial independence of the enterprise. This block of analysis allows you to answer the question: does the company have the opportunity to use credit to improve the efficiency of its work, or does it not independently when making its decisions in the financial field?
For the analysis of financial independence, it seems appropriate to use a system of four financial ratios.
· Autonomy ratio characterizes the share of the company's own funds in the total balance sheet and shows how much it depends on external sources of financing. The higher the value of this indicator, the more financial independence the company has.
The autonomy coefficient is calculated according to the following formula:
where ОВ 4 - obligations and own funds of the company;
ОВ 5 - balance sheet currency (total of liabilities).
· Maneuverability coefficientshows what part of the company's own circulating assets is in mobile form and, therefore, determines the degree of freedom of financial maneuver:
· The debt-eguity ratio (DER) supplements the equity ratio. It characterizes how many rubles of borrowed funds fall on one ruble of own:
· The ratio of "free hands" characterizes the ratio of mobile and immobilized funds in the balance sheet of the enterprise, i.e. in fact, its ability to quickly initially respond to changes in external conditions. This factor is an adjustment factor for calculating the DER class:
where AP 4 is the balance sheet property of the firm.
As in the previous block, we will consider four classes for each coefficient.
Autonomy coefficient class (f3):
I: and if the change in the coefficient for the period is positive;
II: and if the change in the coefficient for the period is negative;
III: <0,5 и если изменение коэффициента за период положительно;
IV: <0,5 и если изменение коэффициента за период отрицательно.
Class of the coefficient of maneuverability (f6):
I: ;
II: >0,7;
III:<0,5 и если изменение нормы за период положительно;
IV: <0,5.
DER class (f7):
I:
IV:\u003e min (1; K10) and if the change in the indicator for the period is positive.
The principle of calculating the interim assessment of financial independence will be similar to the principle of calculating the final indicator for the previous block of analysis:
.
where j - classes K7, K8, K9.
We will get the distribution in four classes.
Class I.High level of financial independence. As a result, the share of own funds exceeds 50% and tends to increase. For borrowed funds, it allows, if necessary, to carry out a financial maneuver, both tactical and strategic.
Class II. An acceptable level of financial independence. For own funds it exceeds 50%, but there is a tendency to decrease it and increase the share of borrowed funds. The possibility of quick maneuvering by mobile means remains.
III class.Perceptible dependence on external sources of financing: the share of borrowed funds exceeds 50%. However, there is a tendency towards its reduction. Financial maneuvering options are limited.
IV class. Heavy dependence on external funding sources and the situation continues to worsen. The company's own circulating assets are insignificant, so there is practically no possibility of financial maneuver.
Study of the structure of loans receivedis of considerable interest, since it gives an opportunity to see in what form the company's management prefers to "keep" its obligations. And therefore, is contacting the bank a traditional form of management policy or is it an unconventional measure, and in the latter case, is it used for the first time, or has the management taken such a step in conditions when other paths are already blocked?
Combinations of possible paths in this area are presented in table. 4.1.
Classification of enterprises by the structure of loans received
Table 4.1
Legend:
LB - a situation when the bulk of the company's borrowed funds is long-term bank debt. All other things being equal, LB class enterprises are the most preferred borrowers for short-term lending.
LE - a situation when the bulk of the company's borrowed funds is in the form of long-term accounts payable. On the scale of preferences (all other things being equal), the LE class enterprise ranks second.
SB - the bulk of the borrowed funds is obtained by the company by attracting short-term bank loans. On the scale of preferences (all other things being equal), an enterprise of the SB class ranks third.
SE - the bulk of the borrowed funds is short-term accounts payable. Enterprises of class SE (all other things being equal) are the least preferred borrowers.
In order to determine which cell of the matrix the analyzed enterprise falls into, we calculate four indicators:
1) long-term debt rate(for long-term debt in the total mass of the firm's liabilities)
where P 2.3 - long-term accounts payable;
2) long-term accounts payable rate(share of long-term accounts payable in the total mass of liabilities)
,
3) short-term debt rate(short-term debt to the amount of liabilities)
where P 2.4 - short-term accounts payable;
4) the rate of short-term accounts payable (short-term payables to the amount of liabilities)
.
Using these coefficients, the following indicators are calculated: K11 - K12, K12, K13 - K14, K14, which form a one-dimensional array consisting of four elements. In each specific case, the maximum element of this array determines the preferred type of the borrower: if the maximum element is K11 - K12, then the preferred type of the borrower is LB, if the maximum element is K12, then the type of borrower is LE, if the maximum element is K13 - K14, then the type of borrower is - SB; the SE type is determined by the maximum K14 element. The preferred type of borrower in the classes will be designated as f8.
Formation of an integral rating.The accumulated information allows us to calculate the most important indicator - the integral rating of the borrower. Of the possible calculation formulas, the simplest and, obviously, the most reliable was chosen, although the calculation process is associated with rather large information losses, which will be taken into account below.
.
The borrower's integral rating summarizes information on the analysis of solvency, analysis of creditworthiness, analysis of financial independence and analysis of the structure of loans received. Moreover, the "share" of each block in the aggregate assessment of the financial condition of the firm automatically depends on the number of coefficients used to analyze each block. Thus, an increase in the number of characteristic coefficients in the sectors of most interest to the investor allows one to simultaneously obtain more detailed information and reflect the significance of this sector in the aggregate rating assessment of the financial condition.
Integral class the borrower is obtained by rounding the rating value to an integer. The exact value of the rating makes it possible to rank (in terms of reliability) borrowers within the same class.
The borrower's class (F) is determined by the formula
.
Class I... Borrowers with absolutely stable financial condition. The dependence of the enterprise on external sources of financing is low. The company is able to pay off all its obligations on time thanks to mobile assets alone. The risk of non-repayment of the received loan is minimal.
Class II... Borrowers with normal financial stability. External sources of short-term financing do not play a significant role in the company's activities. Inventories are generally in line with standards. The risk of lending to this borrower does not exceed the maximum permissible level.
III class... Borrowers with financial precariousness. The company is dependent on external funding sources. The risk of payments on loans and borrowings received is high.
IV class... Borrowers with financial crisis. The company is not able to pay off its obligations and is on the verge of bankruptcy. Lending to borrowers of this class is impractical.
Thus, as a result of summarizing the results of the financial analysis of a Russian firm on the part of a potential lender, we have a three-position set of integral indicators: an integral assessment of liquidity, an integral rating of a borrower and an integral class of a borrower. A meaningful interpretation of the assignment of borrowers to a particular class is defined above. The borrower database is ranked according to the integral rating.
When comparing borrowers within the same class, it is necessary to sequentially compare the following indicators:
1) the integral rating of the borrower (preference is given to the borrower with the lower rating);
2) an integral assessment of liquidity (preference is given to the borrower whose value of this indicator is higher).
However, the comparison according to the integral rating is carried out with a maximum permissible deviation of ± 0.0 (9). If the borrowers of the same class, occupying consecutive cells in the database, have a difference in the integral ratings in modulus within 0.0 (9), then the advantage is given to the borrower whose integral assessment of liquidity is higher (comparison is made without any marginal deviations ).
Such a complicated procedure was introduced because the integral rating has one of its components an error resulting from the loss of information at different stages of its calculation (for example, when rounding off or when moving from a specific value of a financial coefficient to its class). The threshold deviation (and with a sufficiently large margin of safety) can be a value of 0.1. The choice of the balance sheet liquidity assessment as the second (verification) integral indicator was due to two circumstances:
- At first, the assessment of liquidity in a different (non-standardized) form reflects the results of the analysis of the creditworthiness - the most important block of the analysis of the enterprise carried out by the bank;
- Secondly, the loss of information when calculating the integral assessment of liquidity is "microscopic".
Thus, a system of three integral indicators (class / rating / liquidity assessment) allows you to accurately rank any subset of potential borrowers according to their reliability and thereby reduce the risk of default on loans. Comparative calculations have shown that this system is more efficient than one- or two-position sets of similarly constructed integral indicators.
To conduct a complete financial analysis of borrowers, the bank must use, along with quantitative indicators, also qualitative ones, which cannot be measured and evaluated in numbers. In the process of making a decision to issue a loan, it is necessary to take into account the reputation of the borrower (staff qualifications, compliance with contracts, payment discipline, etc.), as well as the specifics and prospects of the economic environment (development of the industry in which the borrower works, his role and place in the industry, the level of competition, etc.), the presence of demand for the products manufactured and sold by the borrower, etc.
Financial analysis requires reliable, constantly updated financial information, both received directly from the client (verified financial statements) and available in the credit archive (information on delays in debt repayment and other violations), as well as information received from external sources (from the banks with which the borrower has dealt, his business partners, from the current press, etc.);
3) control over the use of credit. It should be distinguished from monitoring the current state of the borrower in the lending process. The procedure for such control should be laid down in the loan agreement or a special annex to it (for example, the requirement to transfer all accounts of a potential borrower to the bank, etc.). The development of the bank's security service is necessary;
4) attraction of sufficient collateral for the issued loan to protect against losses in case of default.
At the same time, an important circumstance is the fact that the amount of loan collateral should cover not only the amount of the loan granted, but also the amount of interest on it. However, in no case should you provide a loan for a dubious transaction, because the client provides "good" collateral. Collateral is just an additional guarantee, not a payment for a loan, it does not reduce the risk of non-payment of debt. This point should be especially taken into account by Russian banks, since most often the sale of collateral does not compensate for losses from an outstanding loan.
In practice, the most important types of credit security include surety, guarantee, pledge of goods, securities, movable and immovable property, insurance policy, assignment of the borrower to the bank of claims and accounts (cession).
Through surety agreementthe guarantor undertakes an obligation to the lender (bank) to pay, if necessary, the debt recognized by the borrower (it is in this form that the surety is most often found in credit transactions). As practice shows, this is an acceptable form of security, provided that the guarantor has an impeccable solvency, which does not raise doubts about the volume and legal validity of the obligations guaranteed by him.
Warranty- a written obligation of a third party to pay a certain amount for the borrower upon the occurrence of a guarantee event. Bank guarantees are especially popular. It differs from a surety in that the borrower's claims against the lender are not taken into account as part of the bank's guarantee obligation. Therefore, when securing a loan, banks give preference to a guarantee over a surety, especially if the guarantee contains a "on demand" clause. However, using guarantees as collateral for a loan requires the same analysis of the guarantor as for the borrower. Since the guarantee as a contingent liability is an off-balance sheet item of the guarantor, when assessing the credit risk associated with the guarantor, it is necessary to check both on-balance sheet and off-balance sheet transactions of the guarantor.
A bank using collateralized loans must determine which assets are appropriate pledge when concluding a particular credit transaction and how to calculate the current cost of a loan. When assessing the value of the pledged assets, it is necessary, in particular, to take into account the following characteristics:
- the possibility of their implementation on the market in the shortest possible time and without pre-sale preparation;
- the frequency of fluctuations in market prices for this type of assets;
- the ease with which the lender can locate the collateral and take possession of it;
- depreciation and obsolescence of the pledged assets.
It should be remembered that loans secured by physical collateral in the form of accounts receivable are most readily available for fraud by borrowers.
The borrower in the course of business may have claims against a third party. In this case, he assigns them to the bank as collateral for the received loan. Normal assignment (assignment) of obligations as a guarantee of bank claims is widespread in the practice of financial institutions. The assignment of claims and accounts has technical advantages over collateral. At the same time, there are no problems associated with keeping the collateral.
Loan insuranceinvolves the transfer of the risk of its non-repayment to the insurance organization, it is drawn up by an insurance policy, which can be accepted as collateral for a loan. In this case, all insurance costs are charged to the borrower. In case of non-repayment of the loan, the bank has the right to expect the insurance company to reimburse the lost loan in accordance with the terms of the insurance policy.
This might be interesting (selected paragraphs):
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Credit risk is the risk of a credit institution incurring losses as a result of non-performance, untimely or incomplete performance by the debtor of financial obligations to the credit institution in accordance with the terms of the agreement.
The concentration of credit risk manifests itself in the provision of large loans to an individual borrower or a group of related borrowers, as well as as a result of the debtors of a credit institution either belonging to certain sectors of the economy, or to geographic regions, or in the presence of a number of other liabilities that make them vulnerable to the same economic factors.
Credit risk increases when lending to persons associated with a credit institution (tied lending), i.e. granting loans to individual individuals or legal entities who have real opportunities to influence the nature of the decisions taken by the credit institution on granting loans and on the terms of lending, as well as to persons whose decision-making may be influenced by the credit institution.
Management methods are important elements of the credit risk management system. Credit risk management method - a set of techniques and methods of influencing credit risk in order to achieve the goals set by the bank.
The main objectives of credit risk management are:
1. Risk prevention is achieved by eliminating the prerequisites for the emergence of credit risk.
2. Maintaining risk at a certain level.
3. Minimization of risk.
In the economic literature, the following methods of financial risk management are traditionally distinguished:
1. avoidance (failure),
2.reduction (minimization),
3.insurance,
4. retention.
With regard to credit risk management, such management methods as diversifying the asset portfolio, analyzing the borrower's solvency, creating reserves to cover credit risk, and securing loans have been well studied. Methods for measuring and assessing credit risk are considered by many authors separately from the entire system of management methods.
Avoiding credit risk means refusing to lend to a client when signs of instability in his financial position are identified.
The minimization of credit risk includes rationing of loans, diversification of credit investments, structuring of loans, as well as the formation of reserves to cover banking risks.
The traditional way to minimize this risk when lending to legal entities or individuals is to accept collateral (loan security) in the form of liquid assets or valuable property. One of the ways to minimize credit risk in settlement transactions is to make an advance payment.
Banks should constantly pursue a policy of risk dispersal and avoid concentration of loans among several large borrowers, as this can have serious consequences in the event that one of them defaults on the loan. The bank should not risk depositors' funds by financing speculative (albeit highly profitable) projects.
Rationalizing the loan portfolio - setting lending limits by amount, terms, types of interest rates and other conditions for granting loans; setting limits for individual borrowers and categories of borrowers; setting limits on the concentration of loans for individual borrowers or groups of related borrowers.
The loan rationing procedure is carried out in two directions: firstly, it involves the fulfillment of the mandatory standards of the Central Bank of the Russian Federation, and secondly, it is based on the development of the bank's internal regulatory documents and the fulfillment of their requirements.
Diversification of the loan portfolio is a method of minimizing credit risk by distributing loans to various categories of borrowers, terms of provision, types of collateral, degree of risk, regions, types of activity.
Loan structuring - development and definition of the terms of a loan agreement for a specific transaction in order to generate income for the bank and minimize credit risk. When structuring a loan, the following parameters of a loan agreement are developed:
Optimal loan term;
Interest rate for using the loan;
Purpose of the loan;
Method of ensuring the fulfillment of obligations by the borrower;
Other conditions of the loan agreement.
Creation of reserves to cover risks - the formation of special reserves by the bank, at the expense of which debt, unrecoverable, will be written off.
Risk reserves include:
special reserves - amounts reserved for individual loans;
general reserves - reserves for the entire loan portfolio, determined as a percentage of the total amount of outstanding loans;
sectoral reserves - the amount reserved for a part of the loan portfolio (for example, regional reserves when issuing loans to less developed countries).
The main tasks of credit management aimed at reducing credit risk are:
Determination of factors affecting the level of credit risk;
optimization of the loan portfolio in terms of credit risks, the composition of clients and the structure of loans;
Determining the level of the borrower's creditworthiness and identifying the possibility of changing its financial position;
Identification of problem loans at an early stage of their appearance;
Assessment of the sufficiency of the resource base and its timely adjustment;
Ensuring the diversification of credit investments, their liquidity and profitability;
Development of the bank's credit policy, taking into account the analysis of the quality of the loan portfolio.
