9 Class Hours
Instructor: David Linaburg
Lending is the principal business activity for most commercial banks. The loan portfolio is typically the largest asset and the predominate source of revenue. It is also the greatest source of risk to a bank’s safety and soundness. Loan portfolio management is the process by which risk inherent in the lending process are managed and controlled.
This 5-day course will introduce participants to the framework of credit risk management. They will learn how to identify the various types of risk and techniques and tools for mitigating this risk.
The course will also provide an understanding of the various measuring, monitoring and stress testing reports that are available to help understand and manage concentration risk, and how to identify concentration risk in a bank’s portfolio.
Students will learn how to identify the credit culture within their institution, develop a risk appetite statement for their bank and ways to improve the credit risk management practices at their institution.
At the conclusion of this course, the student will be able to:
- Identify the types of risk within the loan portfolio
- Identify their bank’s credit culture
- Develop a risk appetite statement for their institution
- Determine a risk strategy/profile for their institution
- Understand techniques for measuring, monitoring and stress testing the portfolio
- Understand the impact their loan policy will have on the portfolio
- Establish risk based capital limits for individual asset classes
- Identify concentration risk within a portfolio
- Analyze the benefits and drawbacks from risk diversification and risk concentration
- Utilize best practices for concentration risk management
- Recognize when a loan needs to go to a workout
- Prepare the student for a change in the credit cycle, and the impact it could have on their institution
Annual School Session
Second Year Core Course
Competency: Lending