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Credit Risk issues at your finger tips

Date: August 29, 2014 Author: Ramzi Watfa
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Over the recent two months, we have had a large number of signups to our website. Aside from the 5 Mistakes in Credit Application articles, many subscribers checked and read the various articles on Credit Risk which we have published on the site. So I thought I will take this opportunity to list what you may have missed, and discuss how you can benefit from reading and participating in discussions related to them.
  1. What does IRB Compliance really mean in Credit Risk. This article brings out what is means to be IRB compliant under Basel, the fact that it is not just about calculating capital adequacy or measuring probability of default. http://www.credit-risk-store.com/irb-compliance-really-mean-credit-risk/
  2. How we make Credit Decisions. Aren’t you fascinated by the fact that bankers keep repeating the same mistakes again? I have a theory on that and it is addressed in this article: http://www.credit-risk-store.com/make-credit-risk-decisions/
  3. Are all schools in the GCC all low Credit Risk rated? Seems that most private schools in the Arabian Gulf region are cash cows, or is this just a myth? What are the key success factors to running these schools, the barriers to entry, and if indeed they are cash cows, why aren’t there many of them? Read the article on http://www.credit-risk-store.com/schools-gcc-low-credit-risk-rated/
  4. Why Standardized banks should operate as IRB for managing Credit Risk. Bankers still think that by continuing to do what they have done in the past (unwittingly giving away depositor money), then things will continue as is without too much trouble. Little do they realize that the world of banking has changed forever, and the tsunami called Basel Accords will force changes that they have yet to experience. Read more in http://www.credit-risk-store.com/standardized-banks-operate-irb-managing-credit-risk/
  5. Ponzi Schemes: A special Credit Risk feature. In our extensive work in dealing with a number of banks’ portfolios, a common feature keeps poping up: that related to companies borrowing from banks to settle other bank’s debts or pay dividends. Call it what you like, this “passing the hat” syndrome is a time bomb and eventually, when the music stops, some banks will have to write off large sums. This is akin to the Ponzi scheme that keeps being repeated in business, and is illustrated in http://www.credit-risk-store.com/ponzi-schemes-special-credit-risk-feature/
  6. How Risky is a Saudi Portfolio? A selection of Credit Risk Ratings. Seems that there are a number of faults in the banking system that seem to arise, not because of lack of cash generation, but bad banking practices. A snap shot of listed Saudi companies provides some insights in http://www.credit-risk-store.com/risky-saudi-portfolio-selection-credit-risk-ratings/
  7. Is there a Credit Risk characteristic to the Retail sector? We do not believe in peer analysis. However we do believe in Target Market assessment, which including identifying sectors that have a high potential for low rated obligors. This article tried to address this factor for the retail business in http://www.credit-risk-store.com/credit-risk-characteristic-retail-sector/
  8. Beauty is certainly in the eye of the Credit Risk beholder. A phenomenal example of a very low rated company, L’Oreal. I wonder if cosmetics is all the same, and if so then I am in the wrong business! Read on http://www.credit-risk-store.com/beauty-certainly-eye-credit-risk-beholder/
  9. Middle East Complex (MEC) – How banks got the Credit Risk all wrong. Back in 2003 I was advising banks to be very careful of doing business with companies such as MEC. My advice was ignored, and later the banks had to reschedule their exposures with what was later a much smaller company. Lessons learnt in http://www.credit-risk-store.com/middle-east-complex-mec-banks-got-credit-risk-wrong/
  10. Do all regional Pharma companies have the wrong credit risk model? It is not about growth. It is about intelligent growth, and managing the business model. Seems the hard lessons to be learnt in this sector are very costly. Read more in http://www.credit-risk-store.com/regional-pharma-companies-wrong-credit-risk-model/
  11. How well will retail stores cope with changes in the industry? A Credit Risk perspective. Deloitte published an article on the Global Powers of Retailing 2014 in which it listed the largest 250 retailers in the world. What were their key to success, and is the business model consistent across all of them? Read on http://www.credit-risk-store.com/well-will-retail-stores-cope-changes-industry-credit-risk-perspective/
  12. How do you manage Credit Risk at your bank? Bankers seem to think that after so many years practicing on the job, they found the secret to assessing credit risk. As a result they keep referring to “our way” of doing business. Little do they realize it is a simple concept: Can the obligor pay me back! As described in http://www.credit-risk-store.com/how-manage-credit-risk-bank/
  13. Saudi Cement Companies Risk Ratings – Credit Risk perspective. For an emerging market that has a high potential for further boom, high barriers to entry still play a role in ensuring performance. In terms of ratings, Saudi Cement companies are the lowest in the market. See why in http://www.credit-risk-store.com/saudi-cement-companies-risk-ratings-credit-risk-perspective/
  14. How can a company in UAE’s Rask Al Khaimah emirate become the number one producer and seller of Ceramics in the world? A Credit Risk perspective. What was its secret? Or was the number one position left vacant because it was not worth occupying given current industry dynamics? See in http://www.credit-risk-store.com/can-company-uaes-ras-al-kheimah-emirate-become-number-one-producer-seller-ceramics-world-fancy-credit-risk-perspective/
  15. How Risky is a Kuwaiti Portfolio? A selection of Credit Risk Ratings. Thinking of doing business in Kuwait? Another perspective on a country that is endowed with cash, but limited prospects http://www.credit-risk-store.com/risky-kuwaiti-portfolio-selection-credit-risk-ratings/
  16. A Cash Cow by any measure: Al Marai’s Credit Risk. Imagine a cow in the middle of a desert, drinking water that is artificially created, eating food that does not grow naturally, and being milked for a 30% EBITDA. Find out why in http://www.credit-risk-store.com/a-cash-cow-by-any-measure-almarais-credit-risk-credit-risk-store-com/
  17. A Banker’s Perspective on Diageo’s Credit Risk. Our first article, and one that deals with liquid assets! Diageo is the producers of the Johnnie Walker, J&B and other brands. Does cash flow in this business? Read and find out in http://www.credit-risk-store.com/a-bankers-perspective-on-diageos-credit-risk/
Enjoy going through these articles. If you feel you need to know more about how to analyze, visit our Credit Risk Store on http://www.credit-risk-store.com/online-courses/
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