Hong Dounong Firm Credit Risk Management

The main business of the bank is to provide a loan and deposit.The recovery of loan is uncertain due to the asymmetry of information. So the risk of loan is the main risk faced by banks. Credit risk and management have become important component of a bank's management system. The rural credit cooperatives have been the main force of China's rural financial market. They are the main source to meet the demand of the rural financial market and they have played an irreplaceable role to support the rural economic development. The main service targets of the rural credit cooperatives are agricultural production, households, small and medium enterprises, individually-owned business and other vulnerable economic entities. These economic entities have decentralized operation, small-scale, low management level, and undulant income, so the repayment of loan will be affected. Because reformation is not completed, the rural credit cooperatives remains non-performing loans and historical baggage, so their credit risk will be even greater compared with other commercial banks. Hong Du Rural Commerce Bank is restructured from rural credit cooperate, so it has low quality of credit assets, a large number of high non-performing loans, and gradually increased credit risk.All these factors have a negative impact on the operation of Hong Du Rural Commerce Bank. Therefore, to analyze the causes of the credit risk and make some opinions to improve its credit risk management levels is meaningful to the development of Hong Du Rural Commerce Bank and have a great practical significance to the rural economic development of JiangXi Province.The purpose of this paper is to study the credit risk management of Hong Du Rural Commerce Bank. Firstly, the article makes a comparison of credit risk management at home and abroad. Then has an introduce of Hong Du Rural Commerce Bank's credit risk profile, including Hong Du Rural Commerce Bank's development process, the causes and types of credit risk. Later on describes Hong Du Rural Commerce Bank's credit risk management status and points out its disadvantage of credit risk management. Finally, according to Hong Du Rural Commerce Bank's causes of credit risk, the article makes some suggestions from the external and internal to improve the level of credit risk management. These suggestions include improving the external financial environment; establishing a sound credit risk management system and an effective credit risk early warning system. Although the article has a study of Hong Du Rural Commerce Bank's credit risk management and puts forward some suggestions, there are still some insufficient. The article doesn't make a comparison of credit risk management with other banks, and the article doesn't use empirical methods to test the validity of the credit risk early warning model. It is the further research of this article.