Master of Economics and Business Bissenova R.A.

Kyzylorda State University Korkyt Ata, Kazakhstan

Management of credit portfolio and its types

The credit portfolio an aggregate of all issued bank loans. The credit portfolio an aggregate of receivable balances of principal on active credit transactions on a particular date.

Client credit portfolio is its component of the and is a residue of arrears on credit operations of the bank to physical persons and legal entities on a specific date.

The credit portfolio and its types. The crediting is the main operation, which provides profitability and stability of the existence of the bank. Bank shall form its credit portfolio, giving out loans to individuals and legal entities.

There are different classifications the credit portfolio, for example division of portfolio on the gross (total volume of loans issued by the bank at a particular time), and the net (gross portfolio, net of the allowance for possible loan losses).

Types of credit portfolios. The risk-neutral credit portfolio is characterized by relatively low rates of risky, but at the same time, and low rates of return, and risky credit portfolio has a high level of profitability, but also a significant level of risk.

Optimal credit portfolio most closely matches on the composition and structure to the credit and marketing policy of the bank and the bank's strategic development plan.

The optimal portfolio does not always coincide with the balanced credit portfolio.

At certain stages of its activity, the bank may make lending wth less profitability and a high-risk, the detriment of balance of the credit portfolio. This is done in order to strengthen the competitive position, of the conquest of new niches in the market and attraction new customers, etc.

Also allocate:

• credit portfolio of the parent bank and the credit portfolios of the branches;

• Business credit portfolio (corporate);

• the personal credit portfolio (individuals);

• interbank credit portfolio (the portfolio of loans to other banks);

• portfolio of ruble credits;

• the portfolio currency credit and others.

Management of credit portfolio. Credit portfolio management represents organization of the bank's activities in the implementation of of crediting process, which is aimed at preventing or minimizing credit risk.

The ultimate goals of the credit institution when managing to credit portfolio is;

• First, making profit from the active operations;

• Second - maintaining a safe and secure of activity bank.

The organizational structure of credit portfolio management is based on the principle of delimitation of competence, that is, the distribution of powers executives of different rank to extend credit, of changing the credit terms of the transaction, depending on the amount of credit risk and other characteristics.

In the system of credit portfolio management activities important role played developing and conducting credit policies. Strategy and tactics of the credit policy is developed at the central office (the parent bank) by the credit department (management) in cooperation with the Credit Committee. The Credit Committee is created in each bank and is usually chaired by the Deputy Chairman of the Management Board in charge of the bank's credit activity.

Composition and powers of the Committee are approved by the the Board and the Chairman of the Board. In credit policy is formulated the overall objective and are determined by the way to achieve it: the priority areas of credit investments, acceptable and unacceptable types of active operations of the bank, the preferred Circle borrowers, etc.

An analysis of the credit portfolio. By implementing credit operations, the bank is committed not only to their volume growth, but also to improve the quality of the credit portfolio.

Thus, for an effective loan portfolio management analysis must be using a variety of quantitative and qualitative characteristics, as well as throughout the bank and its structural units.

Quantitative analysis involves studying of composition and structure of the bank's loan portfolio in the dynamics by the following quantitative economic criteria:

· • The volume of and structure of credit investments by types;

· • structure of credit investments by groups of borrowers (corporate loans, loans to individuals);

• credit terms;

• timeliness of repayment of loans;

• industry affiliation;

• kinds of currencies;

• the price of crediting (interest rate).

Such analysis allows to reveal the preferred sphere of credit investments and trends, including the repayment of credits and their profitability.

Of great importance is the comparison of actual debt balances with the projected, with the established lending limits "credit ceilings" and so on.

"The credit ceiling" - is the upper limits of total amount of loans, or growth, which established for banks, either the amount or the amount of credit limit granted to one customer.

After quantitative analysis follows analysis the quality of the credit portfolio. Scope of activity of the borrower and his type possess different risk for certain economic conditions, hence, loan types, depending on the volume of crediting and objectives are estimated in different ways, and this should be taken into account when studying the bank's loan portfolio.

For this purpose used various relative indicators, calculated by turnover for a given period or on debt balance of a certain date.

These include, for example:

• the share of problem loans in the all gross credit portfolio the client;

• the ratio of overdue debt to equity, and others.

On the basis of the qualitative characteristics of the credit portfolio is possible give praise compliance with the principles of crediting and the degree of risk of credit operations, prospects of liquidity of the bank. Thus, in any bank state of the credit portfolio must be under constant supervision.

Literature

1. Челноков В.А. Банки и банковские операции: Букварь кредитования. Технологии банковских ссуд. Околобанковское рыночное пространство: Учеб. для вузов/ В.А. Челноков. 2-е изд. перераб.М: Высш.школа, 2004, 291 с.

2. Деятельность коммерческих банков: Учебное пособие/ Под ред. проф., д.э.н. А.В. Калтырина – Ростов н/Д: «Феникс», 2004. – 384 с.

3. Деньги Кредит Банки Ценные бумаги для студентов вузов. Серия «Шпаргалки». Ростов н/Д: Феникс, 2004. – 461 с.