Evaluation Of Loan Risk About Silica Project Of X Enterprise

Commercial banks (CB) are the main body of the modern financial system. Inthe social and economic life, CB have achieved most turnover of funds flow of wholesociety by financing and settlement convenience and play the function of creatingvalue. Because of the important status of CB in the whole financial system, stabilityof CB directly affects the stability and development of the whole financial system andeven the whole market economy. Especially, the credit business of CB is the mainmode of social financing in china, which determines that c is the main risk of currentfinancial system in our county. Therefore, the research on the loan risk of CB wouldcontribute to comprehensively understanding the risk characteristics and performanceof CB.Risk management is the precondition for CB to maintain liquidity, safety andefficiency, and also is one of ongoing project of CB. In the increasingly integratedinternational and domestic economic and financial environment, whether canimplement effective risk management is an important content to evaluate the corecompetitiveness of CB. Credit risk management has been one of the main problemsfaced by CB. Therefore, it is very meaningful for CB to improve the corecompetitiveness of CB that credit risk management is strengthened.Although profits sources of China’s banking industry diversifies in recent years,credit asset is still the major assets and income in our country. Quality of Credit assetsand index of credit risk not only directly affect the profit level of CB, but also Closelyrelate to the social stability and the national economy running smoothly.Although the state of corporate bonds, corporate bonds, private bonds and otherbonds is improved in recent years in capital market, indirectly financing is still themainstream of corporate finance under the current capital market situation of our country. China’s bank loan to GDP is more than110%, which is higher than the worldaverage level. In the last few years, securities market developed quickly. The marketvalue accounted for48.52%of GDP in2010, which reached40%-50%of the marketvalue of most developing countries. However, there is significant difference betweenChina’s securities market and developed countries’. It is revealed that direct financingfor China’s enterprises is inconvenient and it is difficult to meet the financing needs ofthe many small and medium enterprises.So far funding needs of Chinese enterprises are still more dependent oncommercial banks, which makes the management risk of these enterprises moreconcentrated in the banking system. When enterprises encounter economic problemsand even go bankrupt, the risk will be transferred to the banks and then the bad assetsof banks occur. China Banking Regulatory Commission reported that thenon-performing loans of CB amounted to492,900,000,000Yuan at the end of2012and the average non-performing loan ratio(NPLR) was0.95%:0.99%NPLR in thelarge commercial banks;0.72%in joint-stock commercial banks;0.81%in Citycommercial banks;1.76%in rural commercial bank; and0.52%in foreign banks. It isshowed that China’s commercial banks have good credit risk control mechanism.The purpose of this study is to research how CB better support enterprisedevelopment, avoid credit risk and strengthen credit risk management by analyzingsilica white project of X company. Firstly, the situation of silica white project of XCompany was discussed. It was found that Credit risk was multidimensional. Thenproject loan risk sources were analyzed. Last the method of the loan risk control wasproposed based on all kinds of credit risk. Overall, the loan risk management level ofChina’s CB rapidly increases in a relatively short period of time and the difference isdecreasing when compared with the advanced international banks.