“Evaluation of Credit Assessment & Risk Grading Management of Dutch Bangla Bank Ltd.”

Credit ratings are opinions about credit risk and convey the agency’s opinion about the capacity and readiness of an issuer to meet its financial requirements on time. Each agency has its own individual structured assessment process and rating systems, however the overall outcome is provide companies with an average calculation of credit risk (Viney, 2012). Different factors affect a company’s credit rating, for example country risk which includes the economic, business and social environment and sovereign risk which includes direct/indirect political interventions. However BHP Billiton is currently under pressure due to the market environment, in particular relation to the current economic conditions.

The idea of “risk” is used in many fields and industries. There has been large efforts made towards the understanding of risk. Since, risk varies so much depending on the field of study, the need for learning about it is warranted. As can be imagined, the importance of risk in a market economy is crucial. In the 1990s, JP Morgan made the Value at Risk (VaR) a central component of its work efforts (Cecilia-Nicoleta, Anne-Marie, & Carmen-Maria, 2011).

After analysing the financial statements of Home Depot, we have allocated a “C” rating of credit risk. The proposal is to start with the “C” rating and then to either upgrade to a “B” rating or to be down graded to a “D” rating. The reason for such a decision is discussed below.

To address the risk associated with business account kiting schemes, credit unions should perform a risk assessment by evaluating the business member’s creditworthiness before approving a checking account. The idea is to offer checking accounts to business members who are least likely to abuse the account, which could result in large losses to the credit

Credit risk consists of three parts: the size of the exposure at the time of default, the probability of default occurring, and the loss if the credit event occurs (Fraser & Simkins, 2010). Undoubtedly, a combination of a clear strategy, a knowledge of analytical tools, an understanding of the risk management instruments, responsible oversight, and the ability to be intuitive is crucial to risk management (Bethel, 2016). Wells Fargo is one of the most successful banks in the United States in managing risk. Successfully, they have navigated through risk by choosing a course of action determined by their risk management process (Perez, 2014).

The credit bureaus have made a very profitable business out of helping lenders like banks, mortgage banks, credit card companies and auto loan lenders assess “credit worthiness” or in laymen’s terms a consumers ability to pay back a loan. The credit-scoring model is a risk assessment in the form of a score. This assessment or credit score is one of the leading decision makers of interest rates and other terms of a loan. Consumers with poor or low credit scores will pay a higher annual interest rate than consumers with high credit scores.

So it is also attractive for Jules Kroll to take this opportunity to enter the credit rating industry. In addition, the “issuer pays” model, which used by the big three rating agencies, lets companies shop around for the best ratings, putting pressure on the agencies to inflate their grades. As a result, it is very difficult to argue that they can adequately represent the users’ side. Therefore, Jules Kroll wants to use another model that can assign unbiased and reliable ratings.

b) The ratings methodologies employed by these various bond rating agencies are a mixture of financial performance, information and subjective objectives and management quality information. All of this information is synthesized for the purpose of using it to predict the creditworthiness of the bond issuer, which is inversely related to the risk of default. Based on the above bond rating methodology,

Credit risk measurement also named as CRM in banking industry, can be noticed in two different standpoints in the bank. It can be the

There are many types of rating that can be granted to a company after evaluate the company assets and liabilities. The best rating is AAA1 which has a superior capacity to meet its financial obligations while the lowest rating is D which currently in default on either all or a substantial portion of its financial obligation. Dutch Lady Milk Industries Berhad had been granted a credit rating of AAA1 with an interest charge of 2.50 % in 2014. This rating was not showing in the RAM but based on the information obtained in the annual report 2014. In addition, the higher the rate obtained, the lower the interest charge. Therefore, a good credit rating shows that Dutch Lady Milk Industries Berhad has higher

According to Malaysia Sukuk Market Handbook it said that credit rating especially focus in credit risk, analyse situation where one financial obligation or commitment may become lost based on a change in capacity and obligation underwriter readiness meet the financial commitment on time and in line with transaction terminology. As risk payment measurement refuse, sukuk consider place various sukuk type in market in their relative default risk matter.

1. To what extent is the performance of commercial bank affected by credit risk management?

The banking sector in Bangladesh is included in the financial sector which is small and underdeveloped. Rubel and Kee (2013) stated that the well-being of an employee is not considered as a priority, so it was determined that employee engagement would be one of the ways to develop the banking sector. Transformational leadership style is an important factor to increase engagement amongst employees with specific impact on employee attitudes and behavioral outcomes. Raja (2012) found that transformational leadership has an influence on higher levels of employee engagement in the workplace with its multiple attributes such as, idealized influence, inspirational motivation, individual consideration, and

Banks fail when they are no longer able to meet their obligations. They might be unable to pay the bills, or a bank failure may arise because they can 't provide cash when depositors demand it.  Nepal Development Bank Limited (NDBL) which aspired to enter the new millennium with profitability, size and efficiency on par with the best of the banks in the world is one of the banks that have been a victim of its own irresponsible acts. One factor behind the misfortune of Nepal Development Bank Limited is bad corporate governance. Economists say corporate governance has appeared as the biggest challenge for the banking sector. According to them, the easy licensing policy adopted over the last decade is the main reason behind today’s problems, as everybody with certain income could open BFIs.

The area of credit appraisal and assessment is very vast and each new account poses new challenges and tests our skill. Whenever a proposal is received, what does a banker looks for in it? Answer to this question is not only very detailed but also very complex. Earlier speakers might have already covered the finer aspects of the project/credit appraisal i.e. from the selection of the project to preparation of projected financials and evaluation of the project from the angle of acceptability, more importantly the following points :