TOOL B3
This tool helps you decide the depth of the required analysis when undertaking a regular review of an existing credit exposure.
1. Compliance with Approval Conditions
» Have all previous Credit Committee conditions been satisfied?
» Has the facility been used in accordance with the approval?
» Is the relationship meeting required loan pricing and RAROC requirements?
» Has ancillary business been generated as previously expected?
2. Documentation and Collateral
» Has all loan and collateral documentation been properly completed?
» Have all covenants and other terms and conditions been complied with?
» Has any collateral been re-valued, if applicable?
3. Information
» Have up-to-date financial statements been received and analysed?
» Has up-to-date information on the industry and management been obtained and analysed?
» Has the company supplied all required information on time?
» Has necessary information been supplied to or received from third parties?
4. Proposed Changes to Facilities Terms & Conditions
» Is the company requesting any changes that require explicit approval?
RISK CONCLUSION
» Has there been a deterioration/downgrade of the internal and/or external rating?
» Has there been significant increase in risk?
» Is there evidence of warning signals?
Note: If the answer to any of the last three is YES, then more than a simple review is required!
