Analysis On Risk Management Of Business Group Customers For X Commercial Banke

Currently, the group customers have become the focus of domestic commercialbanks’ credit supply, by virtue of its huge size of assets, more widely financingchannels, the more prominent performance in operating efficiency and expandingtrend in many fields. At the same time, the majority of group customers graduallybecome the focus and difficulty in commercial banks’ comprehensive riskmanagement, because of the risks among its frequent connected transaction, complexstructure of ownership and organization, aggressive expansion strategy (as currentlymost of Chinese group customers are involved in the field of multi-industry) andunclear financing condition. Especially when in the grim situation of the uncertaintyof foreign economic recovery and the schedule change of domestic economicdevelopment, the potential liquidity risk, regional risk and system risk faced by thecommercial banks have increased. For instance, the recent risk events and evenreorganization happened in Suntech Group, Lend Lease Group and a number ofgroup customers, bring the relevant commercial banks underestimated losses;Meanwhile, commercial banks are also facing increasingly stringent regulatorypolicies and the environment, such as the " Basel Ⅲ" further increases themanagement requirements to liquidity, concentration, capital adequacy and otheraspects of commercial banks, so that commercial banks have to reconsider its creditstructure and quality to the Group customers. In this case, how to effectivelycomprehensive manage the risk of group customers has become a major issue of thecommercial banks to carry out a comprehensive risk management and enhanceoverall competitiveness, maintain a healthy sustainable development.However, the majority of our commercial banks do not take group customersrisk management into development strategies and the corporate culture, lack of acomplete, global, targeted institutional system and management processes, so thatgroup customers risk management can’t be embedded into the whole process of thebank’s business development, resulting in a disjointed business between developmentand risk management, leading to a lack of direction and initiative in the risk management of the group customers, which brings risks to safety and sounddevelopment of banking assets.This paper is based on qualitative analysis, supplemented by quantitativeanalysis. Based on research and summary in the theoretical ideas and practicalexperience in risk management of the group customers of domestic and foreigncommercial banks, taking X commercial bank, as an example, through the VARmodel empirical analysis, this paper better characterizes the impact on the overall risklevel of X commercial banks by the risk profile of the group customers. Meanwhile,for the current situation and lack of commercial banking group X client riskmanagement, from development strategy, the height of the corporate culture, thispaper proposes ideas and systems design to the work of the group customers riskmanagement risk management, and proposed the whole process recommendations ofrisk management to X commercial bank’s group customers risk management from theoperational level. These ideas and systems design and the whole processrecommendation also have reference value for all commercial banks in the groupcustomers risk management. The paper is divided into five chapters:The first chapter is the introduction. This section analyzes the background ofcommercial banks’ risk management in the group customers; Secondly, this thesisreviews the related literature; Finally, based on previous studies, this paper proposesstudy focus, research methods and innovation, and set the theme, ideas and structuralframework in general of this research.The second chapter is the theoretical basis of this article. It studies and identifiesthe main concept and classification of group customers, describes the basic processesand procedures of commercial banks risk management theory and the practice of riskmanagement, laid the theoretical foundation for the subsequent analysis.The third chapter is the empirical analysis. By the use of VAR econometricmodel, it simulated estimates the impact of the risk profile of the group customers onthe overall level of commercial banks risk management. By empirical analysis, thispaper demonstrates the importance and necessity of the commercial banks tostrengthen risk management to the group customers.The fourth chapter analyzes the status quo of X Commercial Bank’s risk management to the group customer, and proposes specific measures to commercialbanks’“whole process” risk management to the group customers.The fifth chapter concludes case studies. Taking customer Group A and Group Bof X commercial bank as example, it carries out a detailed analysis on riskmanagement to two different types of group customers of integration anddiversification, and proposes targeted countermeasures and suggestions based on thefact.The main conclusion of this paper is that it is quite important for commercialbanks to strengthen the group customer credit risk management. The commercialbanks risk management situation at present exists many flaws and shortcomings, thusthere is a need to improve the commercial banks’ method on credit risk managementto the group customers. This paper proposes the whole process risk managementmeasures, and combined with the case, innovatively put forward the commonalitiesand differences of risk management between the group customers with integrationand the group customers with diversification.