Study On Credit Risk Management Of PA Bank

PA bank is one of the first joint-stock commercial bank listed on the Shenzhen stock exchange.Its controlling shareholder is a large insurance group and its subsidiaries.After more than thirty years of development,PA bank now enjoys a certain reputation in our small and medium-sized joint-stock commercial banks.As one of the three pillars of the Group's development strategy,with the support of the Group,PA Bank has developed rapidly since 2012.But in recent years,it has faced severe pressures on credit risks and is currently seeking business transformation.Credit risk management is the long-term theme of commercial bank operation management,and its effectiveness largely determines whether commercial banks can continue to develop with high quality.After combing the relevant literature on comprehensive risk management,economic capital management and performance appraisal of commercial banks,this paper first illustrates the framework of comprehensive risk management for commercial banks,the concept of shareholder value returns to evaluate credit risk management,and the concept of performance appraisal mechanism is an essential factor to affect credit risk management.On this basis,this paper combines the actual business data from 2011 to 2016 and empirically examines the level of credit risk management of PA Bank from the perspective of economic capital management.Then,in order to further explore the causes of the poor performance of credit risk management of PA Bank,this paper is based on the concept of comprehensive risk management and conducts comparative analysis from the perspective of performance assessment.The empirical test results show that neither the allocation of regional credit resources nor the selection of costumer by branches,PA bank failed to aim the return of shareholder value,reflecting that the effectiveness of its credit risk management was not satisfactory.The comparative analysis found that the PA bank's performance appraisal mechanism failed to effectively harmonize risks and benefits,to balance short-term goals and long-term development,and to establish a risk management culture.This paper points out that the improper performance assessment mechanism of PA Bank is an important reason for the low level of its credit risk management,and its comprehensive risk management concept still needs to be strengthened.Based on the results of empirical tests and comparative analysis,this paper suggests PA bank and other commercial banks in China should enhance their own credit risk management capabilities by optimizing credit risk measurement methods,by strengthening internal auditing,and by focusing on data accumulation;also should improve performance appraisal system by establishing performance appraisal system suitable for comprehensive risk management concept,by pay-attention to the implementation and evaluation mechanism business conduction,and by strengthening its own comprehensive risk management culture;and also should strengthen the business analysis and to actively adjust the business model to adapt to changes in the business situation.As it is difficult to collect non-public information of commercial banks,this article conducts empirical research on PA bank's credit risk management based on actual business data,and draws relevant conclusions and suggestions based on research comparative analysis,so as to make content more convincing.Under the background of "strong supervision and risk control" in today's Chinese banking industry,the results of this article could be reference for PA bank and other commercial banks in China.