Credit Risk Management Of Commercial Banks Import Trade Financing

This thesis studies the import trade financing credit risk assessment and management measures of the Bank of China Shandong Province Branch. In recent years, as the credit scale continues to expand and the international financial environment complicate, the banks face more credit risk. It is of great theoretical and practical importance to establish the internal credit risk evaluation system, risk assessment methods and management measures on import trade financing by the Bank of China Shandong Province Branch.Based on the research of foreign and domestic commercial banks on credit risk assessment theory, this thesis starts with the research status of import trade financing theory and operation. The relevant theory on import trade financing risk management is introduced first, after lots of information research and data collection about the import trade financing of Bank of China Shandong Province Branch, the cause of the current trade financing credit risk of the Bank of China Shandong Province Branch is analyzed also. Based on the genetic analysis and combined with the sample data collected from the Bank of China Shandong Province Branch import trade financing,many methods are used to testify the effective method for the assessment of import trade financing credit risk measurement. This thesis doesn’t judge roughly in the form of simple Scoring Card, which can’t analyze and control the risk according to the characteristic of the client and trade financing. Instead, it choose the Logit Model, which is highly accurate and easy to apply,as the assessment model of the import trade financing client’s credit risk to make an empirical analysis.In the empirical study, the objects of study are mainly the import trade financing enterprise of the Bank of China Shandong Province Branch. In the selection of evaluation index, the t-tests are applied on the original financial indexes after initial separation and seven indexes are screened which make significant difference between the "default" and "good credit" enterprises. Then principal component analysis is used to eliminate the multi collinearity among the indexes. The four principal components which reflect the debt paying ability, profit ability, capital structure and the operation ability of the enterprises are extracted as the final assessment indexes of the model. This thesis used the samples as the sample estimates to construct the one-year credit risk prediction model and determine the prediction stability of the model constructed. The empirical results indicate that the gross prediction accuracy rate of the one-year credit risk prediction model is over 80%. The "default" and "good credit" enterprises can be differentiated preferably. The assessment result of the model for the sample estimate and the prediction sample are roughly the same, with preferably stability and sound practical importance.The empirical conclusion of the thesis indicates that it is feasible to assess the credit risk of the import trade financing enterprises of the Bank of China with their financial indexes. It is a suitable mothed to assess the enterprises loan credit risk as a part of the commercial bank internal credit risk assessment system of our country. In actual use, the credit ratings method should be mainly used supplemented with expert scoring method and the prediction results of the credit ratings method should be combined with qualitative analysis to maximize the accuracy of assessment and reduce credit risk exposure of the bank on the import trade financing.