Study On The Bank Credit Risk Management In The Economic Downward

China's economic growth rate is slowing down because of the global economic development situation and the impact of domestic overcapacity in recent years. The economic downward trend is obvious. The economic development faces many challenges due to the existence of many kinds of uncertainty factors in the period of economic downward. As an industry closely related to economic development, the bank is under the influence of the economic development and facing more and more business risks. As the main source of bank profits, credit business risk is especially serious. Therefore, the credit risk has become one of the main risks that banks need to focus on.This thesis takes the Industrial Bank Chengdu branch (IBCB) for example and analyzes the credit risk management problems in the current economic downward cycle. IBCB has been growing rapidly and become one of the important financial institutions in Sichuan. In a chain reaction fashion, IBCB has experienced some challenges in managing credit risks which are derived from the slowdown in operations of business obtaining loans from the bank, as a result of China's deteriorating economic condition. Therefore, how to effectively solve this issue has become one of the key factors for IBCB.This thesis first introduces the present situation and the status of IBCB. Since the establishment of the IBCB, the amount of its credit assets continues to increase, the type of loan is stable, loan guarantees, and loan interest income continues to grow. So the credit business is in sustainable development stage. However, as China's economic growth is slowing down, its credit risk is increasing. It's mainly reilected in the continuous raised non-performing loan ratio, the continuous declined proportion of normal class loans and the significantly increased loan overdue. As a result, the economic downward has led to the continuous increase of the credit risk. Then it analyzes the problems of credit risk management of the IBCB. Some of the issues include outdated credit risk management system, weak credit risk management, and lack of proper credit risk management methodology and culture, etc. And then it analyzes the root causes of IBCB credit risk issue, external and internally. From the external sources, problems include the economic downward leading to the enterprise production and management difficulties, errors in government policy and the borrower's moral hazard problems, etc. From the internal sources, problems include lack of adequate communication between the main head office and branch, ineffective implementation of credit risk control system, relatively sub-standard credit business staff, the inefficient incentive mechanism, etc. Finally, the present paper suggests the possible solutions to improve the credit risk management system of IBCB during the economic downward. Hopefully, this research paper will provide a reference for the prevention of bank credit risk in the future.