Establishment and analysis of the credit risk profile in a Romanian retail bank

Popescu, Ramona Florina and Clipici, Emilia (2008): Establishment and analysis of the credit risk profile in a Romanian retail bank.

Abstract

In order to protect its stakeholders and clients interests, a bank assumes a cautious credit risk profile, correlated to the objectives established in its business strategy. This article presents the credit risk profile and the analysis of the factors involved in the estimation of the probability and the impact of the credit risk upon the loan portfolio in a Romanian retail bank. In the final part, the authors show how the analysis results affect the bank’s credit policy.

• Item Type: MPRA Paper
• Language: English
• Keywords: credit risk profile;loan portfolio;credit policy
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

References

NBR’s Regulation No. 5 / 2002 regarding the classification of credits and investments, as well as the establishment, adjustment and use of credit-risk provisions and it applies to banks, Romanian legal entities.

NBR’s Methodological norms No. 12/22 2002 for the enforcement of NBR's Regulation No. 5/2002 on credit and investment classification, as well as on establishment, adjustment and use of credit risk provisions.

NBR’s and Romanian National Securities Commission’s Regulation No. 14 / 19 / 2006 on credit risk treatment using the standardized approach, for credit institutions and investment firms

NBR’s and Romanian National Securities Commission’s Regulation No. 19 / 24 / 2006 on credit risk mitigation techniques used by credit institutions and investment firms

NBR’s and Romanian National Securities Commission’s Regulation No. 23 / 28 / 2006 on technical criteria concerning the organization and treatment of risks, as well as technical criteria on review and evaluation by the competent authorities

NBR’s Norms No. 17 / 2003 regulating the general framework for the organization and the internal audit of credit institutions and the management of material risks, as well as the organization and performance of internal audit in credit institutions.