The Risk Control On The Credit Of Group Clients In China Construction Bank Of Hunan Branch

In recent years, with the vigorous development of conglomerates, because of its larger customers, the market more competitive, a higher credit rating and other characteristics, the group client has become the focus of marketing of all commercial banks. Group clients are defined as several companies which have a direct or indirect control relationship in equity or in business decisions, as well as the presence of other association, when transfer assets and profits between them may not be according to the principles of fair price. the Group clients bear the existence of legal liability, economic interests of the decentralized nature of the integration, but supervision and control mechanisms is not perfect, therefore, its higher risk level is higher than a single customer, credit management tool which the commercial banks used to control single consumer’s credit risk is clearly not suited to the management of the Group clients. there are misunderstandings and blind spots of the Group’s customer credit risk,Commercial Bank’s sense of Customer credit risk on the Group’s relatively weak, resulting in commercial bank credit to the Group clients multiple customer credit, excessive credit and inappropriate allocation of credit limits and so forth. This will bring huge risk to commercial banks. It has been a critical issue how to guard against credit risk of correlative transaction of group customers.In order to frame the system of risk protection for conglomerate loan effectively and systematically, it is necessary to give a clear definition about what’s conglomerate loan clients, to deeply understand the basic theory of risk control for conglomerate loan such as information communication arrangement, risk features, etc. With regard to the requirements for pragmatic research, we select XYZ conglomerate as a study sample which is an important client of China Construction Bank as a detailed case to analyze the Group clients’credit risk control. We draw the experience in credit risk control of foreign group customer’s correlative business and improve the weakness in present credit risk from internal control mechanism of commercial banks, optimizing the credit group structure of group customer and setting up the external incentive and restraint mechanisms and so on to reduce information asymmetry. Finally, we propose to take effective measures to strengthen the credit risk control on group customers and correlative enterprise.