Enterprise Groups Of China's Commercial Banks Customer Credit Risk Management Study

After China's reform and open to the world, especially after joining the WTO, on one hand, various kinds of corporate groups emerges, expands and becomes more and more important in the economy; on the other hand, Chinese commercial banks have set up the corporate governance and operating mechanism basically fulfilling the requirement of market economy. However, due to various kinds of reasons, the double-concentrated effect commonly exists in Chinese commercial banks, which means that profits are mainly contributed by credit business and most of the credits are extended to large corporate groups. The U.S. sub-prime debt crisis occurred in 2007, resulting to the financial crisis in 2008 and became the finance-quake all over the world. Faced with the complicated relations among connected corporations in various kinds of corporate groups and the abnormal external environment domestic and abroad, it is urgent and necessary for Chinese commercial banks to improve the credit risk management level on corporate group customers.On the basis of analyzing the corporate groups, this article studies the theories of bank-corporate relation, credit distribution under the unbalanced information and asset portfolio; summarizes the common methods of credit risk management on corporate groups; uses the successful experience of foreign advanced commercial banks; analyzes the current situation of and reasons for Chinese commercial banks' credit risk management on corporate group customers and give advices on the enhancement of credit risk management on corporate group customers so as to help Chinese commercial banks to understand the essence of corporate group customers, balance profit and risk, keep commercial rationality, select credit risk management tools reasonably based on their actual situation and maintain a continuous development.Under the guidance of the theories of bank-corporate relation, credit distribution under the unbalanced information and asset portfolio, this article expands the tools for credit risk management on corporate groups into two parts, i.e., credit management and credit portfolio management, and improves the method system of the credit risk management on corporate groups. In the aspect of credit management, the crisis management mechanism and case analysis are expatiated, while in the credit portfolio management part, abroad applicability is emphasized so that a method system is set up including management tools from simple to complex. This article consists of 5 chapters. Chapter 1 is a preface, which mainly explains the research meaning and the summary of related research literature. Chapter 2 is the general explanation of the credit risk management on corporate group customers for commercial banks, which firstly expatiates on the key points of the theories on bank-corporate relation, credit distribution under the unbalanced information and asset portfolio, together with its applicable meanings, on the basis of analyzing the determination and risk characteristics of corporate groups. Secondly, the common methods of the credit risk management on corporate group customers are summarized according to the aforesaid theories. Thirdly, the successful experience of foreign advanced commercial banks is introduced. Chapter 3 points out that Chinese commercial banks' current situation concerning the credit risk management on corporate group customers is far from optimistic and analyzes its reasons. Chapter 4 and 5 make suggestions to Chinese commercial banks on the counter-measures to enhance the credit risk management on corporate group customers from the aspects of credit management and credit portfolio management respectively. The counter-measures include the four aspects of the credit management, i.e., improvement of unified credit approval system, enhancement of 'Triple check' monitoring, implementation of customer admission and retreat mechanism and emphasis on early warning and crisis management mechanism. The counter-measures also include three credit portfolio management tools, i.e., group concentration risk management, group risk exposure management and group unexpected loss management.