Course Description
Credit Risk as the major risk in banking business arises because of customer failure to meet his obligations in accordance with the agreed terms and conditions. This kind of risk can affect bank’s earnings and capital.
This course will first recall all kinds of financial risks faced with banking business, and then will focus on credit risk in more details. By the end of this course, participants will have complete knowledge of techniques to identify the risks, how to assess credit risk by use of credit risk models for individual customers, corporate entities, and credit portfolio in general.
Course Objectives
- Recalling an understanding of different risks in banking environment,
- Being able to efficiently and professionally control and manage the risks using different techniques,
- Gaining the self-confidence for reporting credit risks to the top managers,
Who Should Attend?
- Bankers,
- Risk Officers,
- External and Internal Auditors,
- Anyone who wants to learn the credit risk concepts, risk modeling techniques,
- Graduate and undergraduate students in business, finance, accounting, banking and the other related disciplines who want to join banking sector.
Course Details/Schedule
Risks faced in Banking Sector, Risk Identification
- What are the reasons for risks in banking industry?
- Risks faced by banks,
- Definition of credit risk,
- Is credit risk important for a bank?
- Risks associated with lending activities,
- Credit culture and risk profile,
Credit Risk Analysis and Modeling, Risk Assessment
- What information is required for credit risk analysis?
- Credit risk assessment tools,
- Customer risk assessment (LGD, EAD, PD, EL and UL concepts)
- Credit portfolio risk assessment,
- Modern approach to assessing credit risk,
- Portfolio risk and return,
Controlling Credit Risk, Risk Mitigation
- Loan policy issues,
- Strategic planning for the loan portfolio,
- Loan portfolio objectives,
- Structured finance, Financial Covenants, Collateralization, Syndication, Limitation.
Credit Risk Reporting, Risk Monitoring
- Risk Asset Review Reports,
- Early warning systems,
- Capture asset quality migrations,
- Trigger Actions (i.e. planning credit enhancement, reduction in exposures, exit strategy).
Credit Risk Based Calculations
- Risk based pricing,
- Risk based provisioning and capital requirements.
