Research On Financial Risk Management Of Industrial Bank

With the acceleration of the process of the global internationalization,the extent of internationalization in financial industry further deepened, which means that China’s commercial banks have also entered the ranks of international financial competition. Due to the special nature of the commercial banks that operate monetary capital and credit operations, the issues about risks has long been the hot topic of modern commercial banks. Improving the level of financial risk management of commercial banks will be an important part to enhance the core competitiveness of enterprises. Currently, the level of financial risk management of commercial banks in China is far behind that of banks in Western countries. Hence, Absorbing advanced Western management techniques and developing a scientific approach of risk management which is consistent with the financial condition of our country have become an urgent demand to China’s commercial banks.In recent years, China’s joint-stock commercial banks developed rapidly. Asset size and business types of commercial banks also grow very fast, the accompanying financial risks are gradually rising. However, due to the lack of practices in the financial risk management enabled enterprises to expose a lot of problems. Industrial Bank, as one of the fastest growing joint-stock commercial banks in recent years can be used as the typical research.This paper will use Industrial Bank as an example, by using theoretical knowledge of financial risk management for reference and combining with the Industrial Bank Financial data in recent years, to evaluate and analyze the management status of financial risk comprehensively. This paper will measure the level of financial risk management of the Industrial Bank mainly from asset quality, liquidity, capital losses and market risk, then discover problems and analyze the reasons in conjunction with the relevant content in the financial statements. The research shows that the loan quality of Industrial Bank is poor.The bad loan ratio rose rapidly after 2012. Although the liquidity level improved annually, it’s still below the average level in banking sector. The asset adequacy ratio maintains in a good state, but the assets are influenced by the strong market risk. It’s can be seen that the financial risks level of Industrial Bank are relatively high compared to other banks in the same industry and the management of Industry Bank ‘s financial risk has lots of problems. To solve the above problems, this paper finally put forward feasible suggestions from strengthening internal rating system application in credit risk management, matching the loans and deposits’ liquidity, adjusting the capital structure, using sensitivity and duration management to prevent market risks and establishing strict internal control organization structure and evaluation mechanism.