The financial condition of the borrower is assessed by the bank on the basis of. In-depth monitoring of the state of borrowers
To determine the validity of a loan application in terms of the company's need for additional financial resources and to calculate the prospects for the company's development in the future, its profit and the degree of probability of default on the loan, banks use materials financial statements client.
A loan (including a loan for which the agreement provides for a one-time payment of principal and interest at the end of the agreement) issued to a borrower whose financial condition prevents the repayment of a loan received from a bank is classified as bad, regardless of the presence of other criteria that formally indicate the hopelessness of the loan.
Grade financial condition borrowing bank can be carried out on the basis of an analysis of the values of mandatory economic standards, as well as the reputation of the bank.
As a rule, to assess the borrower's creditworthiness, banks analyze quantitative indicators and calculate coefficients that can to some extent characterize the stability of the client's financial condition. At the same time, each bank develops its own set of indicators, according to which the financial condition of a potential borrower is assessed. The system of such indicators should meet two main criteria:
- - coefficients calculated on the basis of indicators should determine the essential (significant) features of the enterprise's activities;
- - these coefficients should duplicate each other to the least extent possible.
It is recommended to use nine coefficients that characterize the financial condition of the enterprise, grouped into four groups: the sufficiency of own resources, liquidity of assets, profitability of production, turnover of funds.
Coefficients characterizing the sufficiency of own resources:
- - equity ratio (TO 1 ) - characterizes the availability of own working capital of the borrower, necessary for its financial stability. The coefficient is calculated as the ratio of the difference between sources own funds and the actual cost of fixed assets and other non-current assets and the cost of working capital of the enterprise.
- - debt to equity ratio (financial leverage ratio) (TO 2 ) - allows you to assess the degree of security of the borrower own capital and its relative dependence on borrowed funds. The coefficient is calculated as the ratio of the total accounts payable to sources of own funds.
- -ratio of accounts receivable (K 3 ) shows what part of liquid assets accounts receivable. It is calculated as the ratio of the amount of receivables and shipped goods to cash, settlements and other assets. This ratio is very relevant for the Russian reality, since with possible delays in payments from debtors, the liquidity of this part of the assets decreases in proportion to the share of receivables.
Coefficients characterizing the liquidity of assets
- - coefficient current liquidity(coatings) (K 4 ) makes it possible to establish the sufficiency of liquid assets to repay short-term liabilities and can be used to assess the allowable volume of lending to a given borrower. It is calculated as the ratio of current assets to current liabilities (short-term bank loans, short-term loans and accounts payable).
- - quick liquidity ratio (K 5 ) designed to assess the borrower's ability to promptly release funds from circulation and repay short-term debentures. It is calculated as the ratio of the most liquid assets to current liabilities.
Coefficients characterizing profitability
- -return on sales ratio (K 6 ) reflects the efficiency economic activity borrower and is calculated as the ratio of book profit to sales proceeds, net of taxes.
- - profitability ratio production assets(TO 7 ) reflects the relative efficiency of their use and is calculated as the ratio of balance sheet profit to the average reporting period cost of fixed assets and tangible assets. A decrease in the value of this coefficient may indicate a deterioration in the structure of fixed assets, overstocking finished products etc.
Coefficients characterizing the turnover of funds
- -turnover ratio of working capital (K 8 ) characterizes the efficiency of the use of current assets and is calculated as the ratio of proceeds from the sale of products net of taxes to the average value of current assets for the reporting period.
- -inventory turnover ratio (K 9 ) shows the rate at which inventories become accounts receivable and is calculated as the ratio of costs to the average cost of inventories and costs for the reporting period. As a general rule, the higher inventory turnover, the more effectively inventory is managed.
Assumptions and problems
For the creditor bank, the financial solvency of the borrower is important insofar as he expects to receive back the amount issued as a loan and interest on it in time. Such viability of the borrower is expressed in its solvency and creditworthiness.
Solvency is the ability (possibility) and willingness (desire) of a legal or natural person to repay their debts in a timely manner and in full. monetary obligations(debts). In contrast, creditworthiness is the ability and willingness of a person to repay their debts in a timely manner and in full. credit debts(principal and interest). Creditworthiness is a narrower concept than solvency. In order to decide to issue a loan to a given borrower, it is enough for the bank to be convinced of its creditworthiness, it is not necessary to consider the issue in a broader sense (although it is clear from the correlation of concepts that the solvency of the borrower also implies that he has the ability to pay for the loan).
There is another difference between the concepts under consideration. The borrower must repay his ordinary monetary obligations (except for credit ones), as a rule, at the expense of proceeds from the sale of his products (works, services). Concerning credit debt, then, in addition to the above, it has three more sources of repayment (though not always reliable): 1) proceeds from the sale of property accepted by the bank as collateral for a loan, 2) guarantee (guarantee) of another bank or other person; 3) insurance claims. Consequently, a bank that competently gives loans can count on their full or at least partial reimbursement even when the borrower turns out to be insolvent in the usual sense of the word 1 .
The lending activity of Russian banks, along with other circumstances, is complicated by the lack of a well-established methodology for assessing creditworthiness in most of them and the insufficiency of the information base for a full-fledged analysis.
1 In this chapter, the creditworthiness of borrowers is considered in relation to short-term and partly medium-term lending (current creditworthiness). The ability of an enterprise to receive, use and repay in a timely manner, in accordance with the terms of the agreement, a medium- and long-term loan for investment purposes (investment creditworthiness) is a special ability and a separate problem, which will be considered in Ch. 21.
Lease of the financial condition of clients. Most medium and small banks do not have a proper analytical apparatus at all and do not maintain contact with special information, analytical and consulting services, the information of which can help to more accurately assess the creditworthiness of borrowers.
In assessing the creditworthiness of borrowers, two big questions actually need to be answered:
1. How to assess the prospective financial solvency of the borrower (i.e. how to make sure that he will have the ability to meet his financial obligations under the loan by the time of expiration loan agreement)?
2. How to assess how ready he is to fulfill these obligations (ie, whether he wants to do this, can he be trusted)?
To adequately assess the borrower's creditworthiness means to reasonably, conclusively answer both of these questions.
The solution of both issues is possible only if the bank employees have the opportunity to obtain the information necessary for analysis and are able to correctly process and interpret it.
Studying the creditworthiness of potential borrowers is associated with significant difficulties.
In our country, it is still difficult to obtain meaningful financial and other information about the borrower (available financial and statistical reporting does not always allow for a detailed and in-depth analysis financial position borrower), especially since such information does not yet have a representative historical retrospective in terms of working in market conditions. However, it is important that bank staff constantly and actively seek adequate data.
Creditworthiness depends on many factors. And this fact in itself means difficulties, since each factor (for a bank - a risk factor) must be evaluated and calculated. Added to this is the need to determine the relative "weight" of each individual factor for the state of creditworthiness, which is also extremely difficult.
It is even more difficult to assess the prospects for changes in all those factors, causes and circumstances that will determine the creditworthiness of the borrower in the future. The borrower's ability to repay the loan is real value for the creditor, only if it refers to the future period, is a forecast of such ability, and the forecast is sufficiently justified, plausible. Meanwhile, all creditworthiness indicators used in practice are turned to the past, since they are calculated based on data for the past period or periods, moreover, these are usually data on balances (“stocks”) on reporting date, rather than more accurate data on turnovers ("flows") for a certain period. All this indicates that all indicators of creditworthiness have in some way a limited value.
Additional difficulties in determining creditworthiness arise in connection with the existence of such factors, which cannot be measured and evaluated in numbers. This applies primarily to the moral character, reputation, credit history of the borrower. The relevant conclusions can never be considered irrefutable.
Finally, significant difficulties are generated by inflation, which distorts the indicators characterizing the possibility of repaying credit debt (this applies, for example, to the indicators of the turnover of capital and its individual parts - assets, fixed capital, reserves), and the unequal dynamics of the volume of turnover (due to the outpacing growth in prices for products sold) and valuation of balances (fixed assets, stocks).
It is impossible to obtain a single, synthetic assessment of the borrower's creditworthiness with a generalization of digital and non-digital data. For a reasonable assessment of creditworthiness, in addition to information in numerical values, an expert assessment of qualified analysts is needed.
At the same time, the complexity of assessing creditworthiness leads to the use of various approaches to such a task, depending both on the characteristics of borrowers and on the intentions of a particular creditor bank. In doing so, it is important to emphasize: various ways credit ratings do not exclude, but complement each other, i.e. they should be used in combination.
Approaches to assessing the financial solvency of clients
Let us first turn to the richer experience of Western banks. The methods used by them to determine the financial condition are largely similar and even often repeated. Nevertheless, with a certain degree of conventionality, they can be divided into two categories: focused on the "normal" borrower; considering borrowers in terms of how close they are to financial insolvency (bankruptcy).
Many methods ("systems") for assessing borrower candidates have been developed. The most interesting are the PARSER and CAMPARI methods. Their names are formed from the initial letters of the following English words.
Thus, in the practice of European, American and some Russian banks, the CAMPARI method has become widespread. Analysis in accordance with this technique consists in the sequential selection from loan application and the documents attached to it, the most significant factors that determine the client's activities, in their assessment and clarification after a personal meeting with the client. It is easy to see that this and other methods claim to be a comprehensive assessment of the client, and not just to determine the level of his financial solvency. This circumstance can be interpreted both as an advantage of the methods and as their disadvantage.
Financial statements, verified audit, serves as an important source of information about the borrower for the bank. Its analysis (usually over the past three years) reveals how positive sides activities of the enterprise, and increasing credit risk miscalculations that are a harbinger of financial danger.
It is very important to analyze the potential sources of loan repayment, which are: 1) the profit of the enterprise or the income of an individual; 2) funds provided as collateral for a loan; 3) a sufficient volume of assets suitable for sale; 4) guarantees provided by the borrower (for example, the right to withdraw personal property to repay the loan). The main information about the state of these sources is contained in the balance sheets and reports on income, expenses and profits (in the case of individuals - in documents on income and personal property).
Solve the issue of creditworthiness legal entity helps assess his financial situation. For this, a complex analysis is usually used using a large number of financial indicators. Particular attention is drawn to the dynamics of profitability of the enterprise.
The symptoms of a possible financial danger for the bank may be: the establishment of the production of previously unreleased products by the enterprise and the development of a new market in connection with this; the appearance of the client's dependence on loans (usually short-term) due to increasing overhead costs; the client's failure to control his working capital(general excess inventory, etc.); the client has large and unplanned losses; violation by the client of the deadlines for preparing reports or submitting to the bank the necessary financial documents(this is often associated with their falsification); requests from the client to provide him with additional funds in excess of the previously agreed limits; any unmotivated non-compliance with obligations.
There are signs that allow the bank to draw a conclusion about the impending financial crisis client: a significant excess of the agreed limits; misappropriation of the funds received from the loan; meager and irregular cash receipts from the sale of goods, especially in combination with significant payments to suppliers and an unjustified increase in sales on credit; payments to other credit institutions or a sharp increase in the number of requests from them about the financial condition of the client; manipulation of the client with checks.
Western banks use various statistical (probabilistic) methods to assess the risk of bankruptcy of enterprises applying for bank loans. This probability can be expressed in terms of scores, which is why this method is called "scoring".
There are different scoring methods. Most often, to assess the risk of bankruptcy of an enterprise, indicators are used that are calculated on the basis of balance sheet data and an enterprise report on the results of its activities. In the very general view the financial position of the enterprise is estimated by the formula:
R \u003d K1 W + K2 P2 + ... Kp Pp,
where P is the overall assessment of the financial position of the enterprise in points, which determines the risk of bankruptcy; the higher the score, the lower the risk; W, P2, etc. - indicators (in most cases they represent the ratio of one balance sheet indicators to others); Kl, K2, etc. - coefficients assigned in advance to each of the indicators P1, P2, etc.
Examples of such indicators and coefficients are well-known models developed by the American Altman in 1968 and the Bank of France in 1982.
The main problem of the practical use of these and other scoring models is to ensure the coherence and consistency of various indicators. Many banks, in order to achieve more accurate estimates, combine various indicators and coefficients at their discretion.
Methods for analyzing the financial condition of the borrower in the recommendations of foreign experts usually come down to two key points:
A group of indicators is taken, on the basis of which coefficients are calculated that characterize various aspects of the borrower's activities;
The obtained values of the coefficients are compared with the values recommended as normative (or critical).
In the practical implementation of this technology, a number of problems have to be solved. The first problem is how many and what indicators to use for analysis.
The number of calculation coefficients recommended for the analysis of the financial condition can be unlimitedly large. Some computer programs for such an analysis contain 100 or more coefficients. General rule, apparently, it can be this: the purpose of the analysis should determine the number and set of required coefficients. "Necessary" - this is the minimum range of significant (independent) coefficients, the analysis of which will be recognized as mandatory. The rest will be considered auxiliary and can be analyzed in the second place, if necessary. From this it is clear that the correct choice of the list of analyzed coefficients ultimately depends on the economic qualifications of the loan officer (analyst, expert).
World banking practice has developed many different groups of financial ratios, which, in principle, can be used to analyze the financial condition of the borrower. The following classification can be considered the most famous (all its elements are described in detail in the financial and banking literature).
Liquidity ratios - current liquidity ratio (the so-called coverage ratio); operational liquidity ratio.
Efficiency (turnover) ratios - receivables turnover ratio; inventory turnover ratio
varno-material values; fixed assets turnover ratio; asset turnover ratio.
Financial leverage ratios (depending on attracted sources) - calculated in relation to assets, capital, etc.
profitability ratios - profitability ratios; profitability ratios; share profit ratios.
Debt service ratios are calculated as the ratio of the total profit of the borrower to certain upcoming payments.
The use of the listed and similar indicators is supplemented by an assessment of the financial condition of the borrower based on:
Cash flow analysis - determining the difference between cash receipts and expenses of the client for a certain period;
Business risk analysis - determining the possibility that the circulation of client funds may not be completed efficiently enough.
It turns out a very cumbersome scheme. With this in mind, experts continue to search for a more "compact" minimum sufficient set of indicators.
The second problem is what values of the coefficients should be considered "normative" or "critical". In the West, the values of the coefficients characterizing the firm are recommended to be compared with its earlier indicators and with the average indicators for the industry to which the enterprise belongs. In our conditions, it is difficult, if not impossible, to implement such a recommendation. Comparison with their previous performance is often impossible due to the constant change in the "rules of the game" ( tax law, other regulations). It is even more difficult to compare the indicators of the analyzed enterprise with the "normative" ones, since there are simply none. In Russian financial analysis, the possibility of using average industry indicators as standards is declared, but not a single state body conducts such calculations. Normative documents of the Bank of Russia also do not define the procedure for financial analysis.
Approaches to assessing the readiness of the client to repay the loan
As noted above, the bank should, if possible, make sure that the borrower wants to repay the loan and pay interest on it. In a certain sense, this is an even more difficult task than assessing the financial solvency of the borrower, since it concerns such characteristics as personal qualities, moral character, reputation, etc. It seems that banks can and should judge such qualities of their clients only indirectly, by indirect evidence.
To do this, first of all, information is needed, the sources of which in this case can be: negotiations with potential borrower; external sources; internal sources (archive of the bank itself); on-site inspections.
For foreign banks, the first source of external information is credit associations, banking groups whose members often meet and exchange information about clients. The second source of external information are specialized government agencies, private agencies of a fairly broad profile and credit bureaus who collect and sell credit information. Banks
they can also use the information of auditors, suppliers, buyers, competitors of companies of interest to them, banks that have cooperated with them, as well as the media. Finally, there are a large number of reference books and analytical reports that can also be used in credit work.
The most important part of the information obtained through these channels can be considered information that reflects the actual credit history of the borrower. Many countries have achieved significant success in this regard, having well adjusted the work of credit bureaus.
In Russia, at present, both specialized divisions of a number of credit institutions (in their own interests) and some commercial firms that provide unofficial information on a paid basis are engaged in collecting information on the financial condition of clients. Disparate databases have been created that function without mutual exchange of information. Actually Russian banks can replenish information about customers only by using their own information and analytical services and security services (if any). The offices of the largest foreign rating and consulting agencies operating in the country have information mainly about foreign companies and can be useful to banks only if the latter operate in the foreign market.
The abnormality of such a situation has long been obvious. The issue of forming a nationwide database on credit transactions can be considered clearly overdue. Banking structures Russia has been trying for many years to organize cooperation in this direction, including within the framework of and with the participation of the ARB. However, for a number of reasons (insufficient elaboration of the legal and methodological aspects of the problem, disagreements between credit institutions in providing information about their clients, etc.), attempts to create appropriate large-scale structures have not yet been crowned with real success. Until recently, there was no corresponding legislative framework. Therefore, separate groups of banks tried to combine efforts aimed at studying the financial condition of borrowers.
Only at the very end of 2004 was the Law “On credit histories» No. 218-FZ (comes into force in the second half of 2005), according to which commercial credit bureaus will be established in the country, and banks will be required to supply these bureaus with some information about their borrowers - individuals ah (with the permission of the latter). This legislative solution appears to be palliative.
Credit histories containing objective information about business contacts of legal entities and individuals with banks are useful in that they allow bank employees not intuitively, but based on facts, to judge the personal qualities and entrepreneurial reputation of each applicant for a loan.
Speaking about the reputation of the borrower, they usually mean his mental type, competence, truthfulness, decency and sincerity of intentions to effectively use the loan and return it on time with interest. moral virtues
The borrower as an entrepreneur is associated with his ability to reproduce the funds received on a scale that ensures the repayment of the debt, since the moral qualities of the borrower are somehow manifested in his behavior, in the methods and results of entrepreneurship. Thus, the main way to assess the client's reputation is to try to find out about his professional success and the correctness of the fulfillment of previously taken credit obligations.
In general, the analysis of the borrower's reputation includes: an assessment of the main non-financial indicators of the borrower's activities and the parameters of the loan application; study of the profile of the borrower; study of the composition of the founders (participants) and the objectives of the borrowing company; assessment of the level of management in the company (personal qualities of managers, qualifications, experience of managers, their ability and desire to work for the "good of the company", rationality organizational structure, documentation literacy, “working climate”, etc.).
The purpose of the study is to analyze the process of organizing monitoring of the borrower's financial situation and assessing the quality of debt service.
Research objectives:
- to give a general description of credit monitoring and directions for monitoring the issued loan;
- analyze the scheme for monitoring the state of the borrower and identifying bad debts;
- determine the procedure for assessing the quality of debt service on a loan;
- characterize the legal framework governing credit monitoring;
- analyze the experience of monitoring the financial position of the borrower and assessing the quality of debt service and creating a reserve for possible losses: characteristics of business processes for supporting the loan; analysis of the financial position of the borrower; formation and regulation of a reserve for possible losses on loans; reflection in the bank's accounting of operations on the issued loan;
- identify problems of loan portfolio quality;
- identify ways to improve the mechanisms for managing bad debts;
- explore the mechanisms of control by credit organizations, the return of overdue debts by the borrower.
Introduction……………………………………………………………………………………3
Section 1 Theoretical basis credit monitoring……………………………..5
1.1. general characteristics credit monitoring. Directions for monitoring the issued loan…………………………………………………………………………………….5
1.2. Scheme for monitoring the borrower’s condition and identifying bad debts……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
1.3. The procedure for assessing the quality of debt service on a loan…………………………..8
1.4. Legal framework governing credit monitoring……………..9
Section 2. Analysis of the experience of monitoring the financial position of the borrower and assessing the quality of debt service. Creation of a reserve for possible losses…………………...11
2.1. Characteristics of business processes to support the loan…………………11
2.2. Analysis of the financial position of the borrower………………………………………..12
2.3. Formation and regulation of a reserve for possible losses on loans……..14
2.4. Reflection in the bank's accounting of operations on the issued loan ...... .16
Section 3. Problems of improving the quality of the loan portfolio. Ways to solve them…18
3.1. Loan portfolio quality problems……………………………………………18
3.2. Improving the mechanisms for managing bad debts…...20
3.3. Control mechanisms by credit institutions, repayment of overdue debts by the borrower…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
Conclusion………………………………………………………………………………….24
Bibliographic list……………………………………………………………..25
Annex A - Types of monitoring and timing of its implementation………………………...27
Appendix B - Differences in the content of quarterly and monthly monitoring………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Annex B - Documents requested as part of the monitoring of the financial condition……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..29
Annex D - Market and non-market factors…………………………………...30
Annex E - Criteria affecting the determination of the quality of debt service on a loan…………………………………………………………………………………………………………………………………….32
Appendix E - Loan quality categories……………………………………………...35
Annex G - Risk Rate…………………………………………………………..36
Annex 3 - Variants of definition minimum rate provision for a portfolio of homogeneous loans………………………………………………………………………………..
Files: 1 file
As can be seen from Appendix A, the two types of monitoring complement each other, since monthly monitoring is not carried out on the dates of the quarterly monitoring.
Based on the type of monitoring, documents requested from borrowers can also be divided into two groups: documents requested quarterly and documents requested monthly. The grouping of documents is given in Appendix B.
Monitoring usually asks for a detailed breakdown of long-term and short-term financial investments pp. 140 and 250 of the balance sheet indicating the names of specific investments. In the course of the analysis of financial investments, the following are studied: the dynamics of financial investments; structure of financial investments; purpose of financial investments; sources of investment financing; liquidity of financial investments and the possibility of their rapid implementation.
The ratio of market and non-market factors is shown in Appendix D.
The monitoring results are drawn up in the form of an analytical note, which usually contains the following information: name of the borrower, type of loan product and transaction parameters; industry of the borrower, a brief analysis of market and non-market factors; conclusions based on the results of vertical and horizontal analysis of the balance sheet and income statement; conclusions based on the results of the analysis of liquidity, financial stability, business activity and profitability; analysis of sales proceeds; analysis of receivables, accounts payable, financial investments, stocks, loans and credits; analysis of turnover in banks; analysis of the order portfolio and the borrower's cash flow plan; conclusions based on the results of collateral monitoring; a general conclusion about the change in risk for a particular transaction/borrower.
Factors that may indicate the emergence of potential problems for the borrower: a sharp decrease in revenue and receipts on settlement accounts; increase in inventories and work in progress; growth of receivables, growth of overdue debts; growth of accounts payable, including overdue; loan portfolio growth; the presence of a card file for accounts; making claims tax authorities; bringing claims from third parties; drop in demand for products; the presence of predictable cash gaps without additional financing, etc.
1.3. The procedure for assessing the quality of debt service on a loan
The quality of debt service is an indicator that characterizes how timely and in full the borrower/debtor repays its obligations under the loan/factoring agreement.
Depending on how timely and in full the borrower repays mandatory payments on its obligations to the bank, the quality of debt service is classified into one of three categories: good quality of debt service; average quality of debt service; unsatisfactory or poor quality of debt service.
Determination of the quality of debt service on a loan is carried out in accordance with the criteria defined by the Regulation of the Bank of Russia No. 254-P dated March 26, 2004 No. “On the procedure for the formation by credit institutions of reserves for possible losses on loans, on loans and equivalent debts”.
The quality of debt service on loans is assessed by the bank for each issued loan, the quality of debt service under factoring agreements is assessed by the bank within the framework of each assigned monetary claim against the debtor/supplier.
Criteria influencing the determination of the quality of debt service on a loan are presented in Appendix D.
It should be taken into account that the assessment of debt service quality is an integral part of the assessment of the loan quality category. When carrying out inspections, the Bank of Russia has the right to assess the content of loan agreements for the presence / absence of conditions in them, upon the occurrence of which the borrower acquires the right to fulfill loan obligations in a more favorable regime. If there are no provisions in the original agreements that clearly stipulate such conditions and/or parameters, and an additional agreement with improved terms has been concluded in favor of the borrower, then the loan should be recognized as restructured with an appropriate assessment of the debt service quality.
1.4.Regulatory framework governing credit monitoring
The organization of the credit monitoring system is based, as a rule, on the following documents:
Current legislative acts and regulatory documents of the Russian Federation;
Regulations of the Bank of Russia, Federal Service for Financial Monitoring and the Federal Service for Financial Markets;
Internal regulations credit institution.
The legislation of the Russian Federation includes such documents as:
Federal Law of August 7, 2001 N 115-FZ "On counteracting the legalization (laundering) of proceeds from crime and the financing of terrorism" (as amended and supplemented on July 20, 2012 N 121-FZ) 2 , with p 2 tbsp. 7 of which credit institutions, among other organizations carrying out transactions with in cash or other property, are obliged, in order to prevent the legalization (laundering) of proceeds from crime and the financing of terrorism, to develop internal control rules, appoint special officials responsible for the implementation of internal control rules, and also take other internal organizational measures for these purposes;
Federal Law No. 86-FZ of July 10, 2002 “On central bank Russian Federation (Bank of Russia)” (as amended and supplemented on November 21, 2011 N 327-FZ) 3 in accordance with paragraph 9 of Art. 4 of which the Bank of Russia supervises the activities of credit institutions and banking groups;
Federal Law No. 39-FZ of April 22, 1996 "On the Market valuable papers"(with amendments and additions dated July 28, 2012 N 145-FZ) 4 , according to paragraph 11 of article 42 of which the FFMS of Russia controls the implementation of the legislation of the Russian Federation by professional participants in the securities market.
Thus, the economic purpose of implementing a credit monitoring system in commercial bank comes down to a more efficient use of the interdependence of the lending policy and the potential of the bank, as well as to the transformation of the function of predicting the credit policy into a source of competitive advantages for a commercial bank, expressed in maximizing profits and minimizing risks in the process of forming a resource base and effectively allocating borrowed funds.
Section 2. Analysis of the experience of monitoring the financial position of the borrower and assessing the quality of debt service. Creating a reserve for possible losses
2.1. Characteristics of business processes for loan support
The employee of the credit department constantly monitors compliance with the fulfillment of the main and accessory obligations of the borrower, including: control of the targeted use of credit resources, control of timely and full repayment of principal and interest, commissions 5 .
Control over the fulfillment by the borrower of the conditions for business development: is carried out by an employee of the business development unit responsible for this loan transaction. If the conditions for business development are specified in the loan agreement, then control is carried out within the framework of these conditions.
The control credit risk: an employee of a credit unit accompanying a credit transaction is obliged to request from the borrower official financial statements, documents, as well as other information provided for by the credit, which is necessary to analyze the financial and economic activities of the borrower and may affect debt servicing and its repayment.
Financial statements are analyzed on a quarterly basis as of the date following the reporting date, throughout the entire term of the credit transaction using the calculation module. Based on the results of the analysis, a report is drawn up, which also reflects the results of assessing the level of credit risk (taking into account the quality of loan service) and the calculation of the reserve. The report must be signed by the employee who compiled it, the head of the credit department and included in the credit file.
The formation and regulation of the reserve for possible losses on loans and the reserve for possible losses on contingent liabilities of a credit nature is carried out in accordance with the procedure established by the current regulatory documents of the Bank of Russia and the internal documents of the Bank.
An employee of the credit department monthly monitors the amount of funds passing through the borrower's accounts with the Bank. If there is a significant decrease in the amount of cash in comparison with the amount that was taken into account when determining the creditworthiness of the borrower, the employee of the credit department is obliged to establish the reasons for the decrease in volumes.
Upon receipt of information about the borrower, which, in accordance with the loan agreement, may be the basis for the Bank's refusal to fulfill obligations under the loan agreement or the demand for early repayment of the loan, or any other information that may adversely affect the return of the loan product and the payment of interest, the loan officer is obliged notify the Head Office immediately.
Collateral control: control over the availability, safety and liquidity of property accepted as collateral is carried out by an employee of the collateral service in accordance with the procedure established by separate regulatory documents of the Bank. Valuation of the value of collateral in cases where the value of collateral is taken into account when forming a provision for possible losses on loans is carried out by an employee of the collateral service on a quarterly basis, a report with the results of the assessment is included in the credit file.
The control of the guarantor in a credit transaction is carried out by an employee of the credit department in accordance with the terms of the guarantee agreement.
If negative factors arise related to the condition of the collateral, the financial condition of the mortgagor (guarantor, guarantor), the employee of the collateral service (an employee of the credit department) immediately notifies his manager, the head of the troubled assets service, the credit department of the branch, the security service and the control department credit risks of the Head Office to determine a plan for further actions.
Control over the provision and maintenance of credit products by credit departments: the credit risk control department monitors the compliance of the conditions of the provided credit products with the decisions made, as well as the compliance of the loan transaction and the maintenance of the loan product with internal regulatory documents Bank and regulatory documents of the Bank of Russia.
In addition, the appearance of debt with signs of increased credit risk is controlled.
2.2. Analysis of the financial position of the borrower
The process of assessing the financial condition of the borrower consists of several stages: filing an application with the bank; initial assessment of the borrower's creditworthiness by a bank employee and determination of his rating as a debtor (it is expressed in points and includes many quantitative indicators); assessment by the bank of credit opportunities, taking into account the amount requested by the potential client; meeting of the credit committee of the bank, where the decision on the issuance of funds is made. If this decision is positive, all the terms of the loan agreement are determined.
Consider the features of assessing the creditworthiness of an individual borrower.
An obligatory step in lending to individuals is the procedure for assessing their creditworthiness, which is carried out primarily on the basis of information regarding their level of income. At this stage, a scoring assessment of the borrower and a study of his credit history are also mandatory 6 . The methodology for assessing the borrower's creditworthiness in terms of such an indicator as the level of income is carried out on the basis of data not only directly on income, but also on the degree of risk of its loss. It is possible to determine the level of income by studying the relevant salary certificates or tax returns. At the same time, it is mandatory to make certain adjustments to the results, taking into account the risk coefficients of the bank itself and mandatory payments. The term "credit history" is used to determine information about the receipt of loans by a possible borrower in the past, as well as their repayment. In many countries, the formation of credit histories is carried out by specially created bodies for this purpose - credit bureaus.
Scoring is a statistical or mathematical model, with the help of which, based on the credit histories of other customers, the bank is able to calculate how likely it will be that the next potential borrower will return the funds received on time. Such a methodology for assessing a borrower in the most simplified form is a kind of weighted sum of certain characteristics, which is necessary to form an integral indicator. It, in turn, is compared with a numerical threshold (by and large, which is the so-called break-even line) and is calculated depending on how many customers making payments on time are needed to compensate for losses from one specific debtor. Such an assessment of the borrower's solvency is necessary in order to determine the integral indicator of each potential client and compare it with the above line (accordingly, only those borrowers who have this indicator above the break-even line will be able to receive a loan).
Monitoring of financial condition- this is the process of constantly monitoring the effectiveness of the current financial activities of the enterprise in order to detect undesirable deviations in financial activities and eliminate them. Financial condition monitoring includes:
- analysis and control over the implementation of current activities;
- determination of objects of observation;
- development of operational financial reporting systems;
- determining the timing of the submission of relevant reports;
- development, revision and adjustment of performance indicators;
- studying the causes of deviations;
- assessment of the adequacy of the system of normative and planned indicators.
Monitoring of the financial condition of the enterprise is carried out in the FinEkAnalysis program in blocks:
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Credit monitoring(credit monitoring) - a system for monitoring the state of a credit institution, including analysis, assessment and forecast of the fulfillment of loan conditions stipulated by agreements.
Purpose of credit monitoring- to ensure the repayment of the principal debt and the payment of interest on the loan.
Main directions of credit monitoring:
- current borrower in statics and dynamics;
- timeliness and completeness of the fulfillment by him of obligations arising from the terms of the loan agreement;
- credit quality;
- dimensions and correctness of formation;
- the ratio of the terms of the loan agreement with current market trends;
- the correctness of the reflection in the lender of movements related to the fulfillment of the terms of the loan agreement.
To check the borrower and early diagnosis of credit risk, mathematical and statistical methods are used. Credit monitoring is carried out in full or in part by employees of the service or other specialists in accordance with the order of the credit institution.
There are various options for organizing the credit monitoring process, but as a rule, they are based on the following four main principles:
- Carrying out by creditor banks of periodic checks of all types of credits. So, for example, all large loans are checked every 30, 60 or 90 days at the discretion of the bank, and the remaining (smaller) loans are checked on a selective basis.
- Implementation of a detailed development of the stages and sequence of credit control in order to ensure proper verification of all essential conditions for each loan, including such as:
- compliance with the concluded agreement;
- liquidity (quality and condition) of the property pledged as security for the loan;
- availability of completeness and reliability of all necessary documentation in case of litigation;
- study and real assessment of the financial position of the borrower and forecasts of his needs in increasing or maintaining the size;
- establishing the degree of compliance of the issued loan with the current standards for the formation of the loan portfolio and the use of resources.
- Emphasis on the frequency and depth of diversified NPL reviews, taking into account the trend of increasing or decreasing severity of the problem associated with each particular loan.
- Increasing the number and deepening the content of inspections in conditions, as well as in cases where significant problems appear in the sectors in which the bank's credit resources are invested. Among these problems may be such as a noticeable change in tax, export-import legislation; changes in technology or the emergence of new competitors, etc.
Credit monitoring can be classified according to certain criteria:
- by area of implementation:
- internal credit monitoring, in which control is carried out mainly on documents that correspond to a particular stage of the lending process, and the degree of credit risk is assessed;
- external credit monitoring, which includes meetings and negotiations with borrowers who are in arrears; telephone calls, correspondence; counter checks of the movement of goods purchased at the expense of loan funds; on-site inspections; negotiations with guarantors, etc.
- according to the nature of the event:
- preliminary credit monitoring, which provides for checking the compliance of the lending activities legal requirements, availability of appropriate permits, licenses, limits, etc. to the provision of credit funds to borrowers and includes the analysis of loan documentation, assessment of the financial condition of the borrower and analysis of the loan project, assessment of the subject of collateral for the loan, etc. The main purpose of preliminary credit monitoring is to determine the real risk for the bank and make an effective decision on granting a loan to the borrower;
- current credit monitoring consists in exercising control by the bank over the fulfillment of the terms of the loan agreement by the borrower after the decision to grant a loan and the issuance of credit resources is made. The main goal of current credit monitoring is to determine the risk of losses for banking institution due to the inability of the borrower to repay the debt and pay interest on it. At the same time, the timeliness of repayment by the borrower of credit debt is checked, changes in its financial condition and economic activity are determined, the client’s fulfillment of the terms of the loan agreement for the intended use of credit funds is analyzed, the quality of property provided as security is assessed, etc.;
- subsequent (further) monitoring of the credit activity of the bank is to ensure a systematic check of the state of the organization of the credit activity of the bank, the correctness of registration, proper execution and conduct credit operations. In the process of such control, it is necessary to find out the reasons for the violation of the rules for conducting credit activities and take appropriate measures to eliminate them;
- depending on the methods of implementation:
- remote credit monitoring;
- supervisory credit monitoring;
- depending on the scope of credit monitoring:
- local;
- regional;
- National;
- global;
- depending on the coverage area:
- at the level of the loan portfolio as a whole - the main purpose of such monitoring is the timely identification of signs, facts, changes or their trends characterizing the state of the loan portfolio, which may lead or have already led to an increase in risks and may adversely affect the results of the bank's activities, as well as the development of proposals to improve the state of banking credit activities;
- at the individual loan agreement- the goal is to timely identify deviations in the process of lending to a particular borrower at all its stages; clarification of the reasons for these deviations and the development of proposals for correcting the mistakes made;
- Depending on the groups of borrowers, monitoring of loans granted is distinguished:
- corporate borrowers;
- individual borrowers;
- bank borrowers;
- borrowers-non-banking financial institutions;
- groups of related persons of the bank;
- government borrowers.
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