risk rating Archives - Page 2 of 3 -

How to Manage Credit Risk in Name Lending

It is fascinating that in today’s quest for data to make better decisions, banks still use only three out of 177 credit risk criteria to make a credit decision.

Why is Suez Cement’s Credit Risk so low?

This is the second of our analysis on Egyptian companies series, and another one that has a low risk rating of 3.39 (using 6 Sigma’s Credit Risk System). Another investment grade company par excellence, what we consider at 6 Sigma as Category 1 company from

What are the Credit Risk impact of Tesco’s accounting scandal?

In a recent article by the Harvard Business Review, Amazon was admired as being able to generate much cash flow despite having a very low net margin (http://blogs.hbr.org/2014/10/at-amazon-its-all-about-cash-flow/). Yet in the current news, the Chairman of Tesco resigned for overstating its already low profits by

What to do with Credit Risk Ratings?

In line with Basel guidelines, and best practices, a credit risk rating system that a bank uses has to have predictive features to assess how far away an obligor is from default. The closer it is, the higher the rating. This predictive power centers on

Portfolio Risk Rating in Managing Credit Risk

I find it a little odd that with the introduction of the Basel accords, the changes that have taken place in the international banking community, and lessons that should have been learnt from the credit crises, that to this very day, the concept of Portfolio

What does IRB Compliance really mean in Credit Risk?

To us, an IRB compliant bank has to pass through the several hurdles, including amongst others: Calculation of PDs There are several issues here to consider: 1. Definition of PDs. Any risk rating system should provide ratings to show potential defaults for both, forward looking

Are all schools in the GCC low Credit Risk rated?

GEMS recently issued a perpetual subordinated Sukuk for USD 200 million, carrying a coupon of 12% (http://goo.gl/G54cz3). This is a company that has a Financial Rating of 3.6 (6 Sigma), a Category 1 obligor in terms of credit risk, and should command very fine pricing.

Why Standardized banks should operate as IRB for managing Credit Risk

Assume you had a bank that operated under Basel’s Standardized approach (which is essentially the majority of banks worldwide today). Also if it were an average commercial bank, its Revenue to Expense ratio would be 2:1. With a Capital Adequacy of 10.5%, and a Return

Ponzi Schemes: A special Credit Risk feature

It may happen to individuals, and is also prevalent with companies. With individuals it is a case where a schemer lures investors with high returns, and with the proceeds pays off previous investors. The scheme requires an ever increasing cash inflows to pay off a

How Risky is a Saudi Portfolio? A selection of Credit Risk Ratings

In our previous article on Kuwaiti companies, we addressed the point that given the relative wealth in the country, why were almost half of the listed companies we sampled in Kuwait risk rated above 6.5; i.e. watch listed or worse in terms of credit risk,

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Credit Risk Store's Blog

How to Manage Credit Risk in Name Lending

Why is Suez Cement’s Credit Risk so low?

What are the Credit Risk impact of Tesco’s accounting scandal?

What to do with Credit Risk Ratings?

Portfolio Risk Rating in Managing Credit Risk

What does IRB Compliance really mean in Credit Risk?

Are all schools in the GCC low Credit Risk rated?

Why Standardized banks should operate as IRB for managing Credit Risk

Ponzi Schemes: A special Credit Risk feature

How Risky is a Saudi Portfolio? A selection of Credit Risk Ratings

Get the
5 Mistakes
Bankers Do in
Credit Analysis

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Credit Risk Store

Essentials of Accounting

Financial Analysis

Credit Risk Management

Portfolio Risk Rating and Stress Testing

Credit Facility Structuring

Credit Application Basics

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Browse the Credit Risk Store

Get the
5 Mistakes
Bankers Do in
Credit Analysis

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Credit Risk Store