Problem Loans and Risk Analysis for Common Loans

Financial services professionals, consultants, and sales professionals interested in providing or selling products and services to retail banks, and anyone interested in understanding the how bank branches operate

Prerequisite
Please contact us for information about prerequisites.

Expected Duration
30 minutes

Description
Problem loans affect the bottom line profitability of banks. Therefore, it is vital to identify these loans and determine the reasons why they occur. Warning signs typically exist that may inform loan portfolio administrators of impending issues with consumer or business loans. When loans do become problematic, there are certain measures that banks can take to protect themselves, such as restructuring debt, liquidating, or securing assets. Such techniques were widely used during the global credit crisis of the early 21st century, and continue to be relevant in a contemporary credit risk management setting. It is important for analysts to understand the different kinds of consumer loans and tools such as credit scorecards that assist in determining the credit risk level of borrowers.
This course introduces non-performing loans and gives an overview of their warning signs. It also describes ways that banks can protect themselves from non-performing loans and minimize any associated losses. It then identifies types of consumer loans and how consumer credit scorecards are used to distinguish high risk borrowers from low risk ones.

Objective

Problem Loans

  • select the criteria that determine a non-performing loan
  • select the warning signs and the reasons that lead to non-performing loans
  • identify components of priority ranking
  • select components of NPL resolution
  • recognize characteristics of problem loans

Risk Analysis for Common Loans

  • identify categories of securitization
  • select types of consumer loans
  • identify credit scorecard methods
  • recognize characteristics of risk analysis for common loans

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