• Mustafina Nailya Mugattarovna, bachelor, student
• Bashkir State Agrarian University

• FINANCIAL STABILITY
• FORECAST
• FINANCIAL RATIO
• COMMERCIAL BANK

This article talks about the importance of assessing the borrower's creditworthiness for predicting their profits and discusses the main methods for assessing the creditworthiness of commercial bank customers, analyzes in detail the assessment of the borrower's financial stability.

• Analysis of the return on capital as a factor in the effective operation of a commercial bank in Rosselkhozbank JSC
• Theoretical aspects of methods for evaluating the effectiveness of a commercial bank
• The essence of financial stability and its main factors

In the modern world, the market situation cannot be imagined without such an important component as a commercial bank. Today, banks provide a huge number of services that everyone uses.

One of the most demanded bank services is a loan, but before issuing it, the bank must assess its creditworthiness.

The creditworthiness of a commercial bank client is the ability of the borrower to fully and on time pay off his debt obligations (principal and interest). Unlike its solvency, it does not fix non-payments for the past period or for some date, but predicts the ability to repay the debt in the short term. The level of creditworthiness of the client determines the degree of risk of the bank associated with the issuance of a loan to a particular borrower.

The assessment of the creditworthiness of clients of a commercial bank is closely related to the process of planning the income and expenses of this institution, since the amount of profit received depends on the borrower's ability to meet its obligations.

To date, there are several ways to assess the creditworthiness of a bank client:

• management assessment;
• assessment of the financial stability of the client;
• cash flow analysis;
• collecting information about the client;
• monitoring the work of the client by going to the place.

Let us consider in more detail the assessment of the client's financial stability.

The assessment of the creditworthiness of large and medium-sized enterprises is based on the data of the balance sheet, income statement, loan application, information about the history of the client and his managers. The system of financial ratios, analysis of cash flow, business risk and management are used as methods for assessing creditworthiness.

The choice of financial ratios is determined by the characteristics of the bank's clientele, possible causes of financial difficulties, and the bank's credit policy. Five groups of coefficients can be distinguished:

I - liquidity;

II - efficiency, or turnover;

III - financial leverage;

IV - profitability;

V - debt service.

The current liquidity ratio (KTL) shows whether the borrower is able to pay off debt obligations: KTL = Current assets / Current liabilities.

The current liquidity ratio involves a comparison of current assets, i.e. funds that the client has in various forms (cash, net receivables of the nearest maturity, the value of inventories of inventory and other assets), with current liabilities, i.e. liabilities of the nearest maturity (loans, debt to suppliers, bills, budget, workers and employees). If the debt obligations exceed the funds of the client, the latter is insolvent.

Quick (operational) liquidity ratio (KBL) is calculated as follows: KBL = Liquid assets / Current liabilities.

With the help of the quick liquidity ratio, the ability of the borrower to quickly release funds from circulation to repay the bank's debt on time is predicted.

Efficiency (turnover) ratios complement liquidity ratios and make it possible to make the conclusion more justified. If liquidity ratios are growing due to an increase in receivables and the cost of inventories while slowing down their turnover, it is impossible to upgrade the borrower's creditworthiness. The efficiency coefficients are calculated as follows (table 1).

Table 1. Formulas for calculating efficiency ratios.

inventory turnover
Name
Turnaround time in days	Average inventory balances in the period / One-day sales revenue
The number of revolutions in the period	Sales revenue for the period / Average inventory balances in the period
Accounts receivable turnover in days	Average debt balances in the period / One-day sales proceeds
Turnover of fixed capital (fixed assets)	Sales proceeds / Average residual value of fixed assets in the period
Asset turnover	Sales proceeds / Average assets in the period

Efficiency coefficients are analyzed in dynamics and compared with the coefficients of competing enterprises and with industry averages.

The financial leverage ratio characterizes the degree of the borrower's equity. The options for calculating this coefficient are different, but the economic meaning is the same: an assessment of the amount of equity and the degree of dependence of the client on attracted resources. When calculating this ratio, all debt obligations of the bank's client are taken into account, regardless of their terms. The higher the share of borrowed funds (short-term and long-term), the lower the client's creditworthiness class. The final conclusion is made taking into account the dynamics of profitability ratios.

The profitability ratios characterize the efficiency of the use of all capital, including its attracted part. Their varieties are presented in tables 2 and 3.

Table 2. Formulas for calculating the coefficients of the rate of return and profitability.

Rate of return ratios
	Gross profit before interest and taxes / Sales revenue or net sales
	Net operating profit (earnings after interest but before taxes) / Sales revenue or net sales
	Net income after interest and taxes / Sales proceeds or net sales
Profitability ratios
	Earnings before interest and taxes / Assets or equity
	Earnings after interest but before taxes / Assets or equity
	Net income (earnings after interest and taxes) / Assets or equity

A comparison of three types of profitability ratios shows the degree of influence of interest and taxes on the profitability of an enterprise.

Table 3. Formulas for calculating the rate of return per share.

If the share of profit in sales proceeds grows, profitability of assets or capital increases, then it is possible not to lower the client's rating even if the financial leverage ratio deteriorates.

Debt service ratios (market ratios) show how much of the profit is absorbed by interest and fixed payments. The formulas for their calculation are given in Table 4.

Table 4. Formulas for calculating debt service ratios.

The methodology for determining the numerator of interest coverage ratios and fixed payment coverage depends on whether interest or fixed payments are included in the cost price or paid out of profit.

Debt service ratios are of particular importance at high inflation rates, when the amount of interest paid may approach or exceed the principal debt of the client. The more profit is used to cover the interest paid and other fixed payments, the less it remains to repay debt obligations and cover risks, and the worse the client's creditworthiness.

Financial ratios for assessing creditworthiness are calculated on the basis of forecast values ​​for the planned period, average balances on balance sheets as of reporting dates. Indicators for the 1st number do not always reflect the real state of affairs. Therefore, in world practice, a system of coefficients is used, calculated on the basis of the results account (it contains the reporting indicators of turnover for the period). The initial turnover indicator is the sales proceeds.

To determine creditworthiness, a more detailed additional analysis can be carried out, coefficients of business activity, financial stability, profitability, etc. can be calculated.

With enterprises-borrowers of each class, banks build their relations in different ways.

First-class borrowers can count on opening a credit line, lending on a checking account, issuing one-off blank loans - with the establishment in all cases of a lower credit rate than for all other borrowers.

Lending to second-class borrowers is carried out in a general manner, i.e. in the presence of appropriate forms of security. The interest rate depends on the type of collateral.

The provision of loans to third-class borrowers is associated with high credit risk for the bank. In most cases, they try not to issue loans to such borrowers. In the case of issuance - special attention to security, and the interest rate is at the highest level.

Huge non-payments in the country were associated with an underestimation of the moments of credit risks, with the uncivilized approach of banks at the beginning of the development of market relations to their credit policy. When considering the economic situation of a potential borrower, literally all moments are important, otherwise the bank may suffer huge losses. Credit departments of the bank must constantly take into account, analyze foreign and ever-increasing Russian experience.

Analysis and assessment of the borrower's creditworthiness is necessary in order to decide whether it is worth giving him a loan and, if so, on what conditions: the amount provided by the bank, term, interest rate, interest payment schedule, the need for collateral for it, etc. . Having made all the necessary calculations and conclusions on them, a commercial bank will be able to make a forecast about how much money it needs to issue, how many monetary units it needs to create a reserve. Thus, having assessed the creditworthiness of the borrower, the bank plans the volume of lending for the future.

Bibliography

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4. Askarova, A.A. Tax planning at the enterprise [Text] / A.A. Askarova // Economic and social problems of the development of the agro-industrial complex at the turn of the XXI century. Sat. articles to scientific conf. employees of economic faculties, dedicated to the 70th anniversary of BSAU. 2000. S. 127-128.
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Currently, there are many methods to determine the creditworthiness of a bank's borrowing enterprise, such as, in particular: express assessment of creditworthiness based on financial ratios, assessment of the probability of bankruptcy as a result of an enterprise's insolvency based on the Altman Z-score, analysis of the enterprise's cash flows, and others. .

In order to assess the creditworthiness of a borrower, commercial banks use almost all information available to them in all areas of financial and economic activities of enterprises. The issues of assessing the financial position of the borrower are resolved by each bank independently, they are reflected in the internal documents of the bank, in the methods and recommendations created. In the course of the bank's activities, methodological materials undergo certain transformations, are improved for the greatest adaptation to both external and internal conditions. Despite the fact that any improvement leads to simplification or complication of the methodological material, the ultimate goal is to optimize the methods in terms of practical application.

The variety of borrowers and their division into groups in each bank is individual, the principle of objective necessity operates here, it is impossible to analyze the financial condition of: banks, including non-resident banks, non-bank credit organizations using a single method; insurance companies; subjects of the Russian Federation, local authorities; individuals, entrepreneurs without forming a legal entity; small businesses using the simplified taxation system; legal entities (not related to the above groups).

The assessment of the creditworthiness of these borrowers is based on the actual data of the balance sheet, income statement, loan application, information about the history of the client and his managers. The system of financial ratios, analysis of cash flow, business risk and management are used as methods for assessing creditworthiness.

In world and Russian banking practice, various financial ratios are used to assess the borrower's creditworthiness. Their choice is determined by the characteristics of the bank's clientele, possible causes of financial difficulties, and the bank's credit policy.

I. Methodology for assessing the financial condition of borrowers - legal entities.

This Methodology is used to assess the financial condition of clients that are legal entities, excluding credit and insurance organizations, when performing transactions with which the Bank assumes credit and other risks.

The reliable financial position of the borrower is the basis of the solvency and creditworthiness of the borrower, i.e. the ability to timely satisfy payment requirements in accordance with business contracts, repay loans and interest, pay wages to employees, make payments and taxes to the budget.

In this regard, an assessment of the financial condition of borrowers is carried out in order to determine the feasibility of issuing a loan and the conditions for its provision, making a decision on restructuring a loan (i.e. changing the main conditions for granting a loan), assessing the risks assumed by the Bank for each granted loan and the quality of the Bank's loan portfolio generally. The assessment of the financial condition is carried out in several stages:

table 2

The core of the methodology is an express analysis of the financial condition of a borrower - a legal entity, using rating values, which allows classifying borrowers by the quality of their financial position and, accordingly, the level of risk of the Bank's relationship with them (stage 1).

The rating assessment of the enterprise, if necessary, can be supplemented by an analysis of other indicators and additional information that confirms or corrects the results of the rating assessment of the express analysis and the reasons for the change in the solvency of enterprises (stage 2).

When conducting an extended analysis at the 3rd and final stage, the borrower's rating obtained by express analysis is adjusted based on the additional analysis data. After that, a final conclusion on the financial position of the borrower is displayed.

The result of the assessment according to this method is a conclusion about the quality of the financial position of the borrower: good, average (satisfactory) or poor (unsatisfactory) financial position. The methodology for assessing the financial condition of an enterprise is based on a quantitative and qualitative risk analysis.

Quantitative risk analysis involves the assessment of the following risk groups and the financial ratios that characterize them:

the risk of illiquidity of the company's assets (liquidity ratios),

the risk of a decrease in the financial stability of the enterprise (the ratio of equity and borrowed funds, the ratio of own funds),

the risk of low profitability of activities (profitability ratios),

the risk of a decline in business activity (receivables turnover ratio, inventory turnover ratio, accounts payable turnover ratio)

When conducting a qualitative risk analysis, information is considered that cannot be expressed in quantitative terms. To conduct such an analysis, information provided by the borrower, as well as information from information databases and the media (adjusted for the likelihood of their reliability) are used.

At the time of consideration of the issue of issuing a loan to a newly formed legal entity, the financial position of the borrower is considered “medium” due to the absence of direct threats to its current financial position.

The quality of the financial position corresponds to the class of the borrower according to the level of risk of the Bank's relationship with them:

- first class- reliable clients with a good financial position, whose lending is beyond doubt,

- second class - unstable borrowers with a satisfactory (average) financial position, lending to which requires a balanced approach;

- third class - doubtful borrowers with an unsatisfactory (bad) financial position, lending to which is associated with increased risk. The question of the advisability of lending to class 3 clients requires a cautious approach. When lending to such borrowers, increased attention should be paid to the issues of control over the quality of debt service, sufficiency, liquidity and possible terms for the implementation of collateral for the borrower's obligations.

II. Methodology for determining the borrower's creditworthiness in accordance with the "Regulations for granting loans to legal entities".

To determine the creditworthiness of the Borrower, a quantitative (assessment of the financial condition) and qualitative risk analysis is carried out.

The purpose of the risk analysis is to determine the possibility, size and terms of the loan.

1. Assessment of the financial condition of the Borrower.

The assessment of the financial condition of the Borrower is made taking into account trends in the change in the financial condition and factors influencing these changes.

To this end, it is necessary to analyze the dynamics of estimated indicators, the structure of balance sheet items, the quality of assets, and the main directions of the economic and financial policy of the enterprise.

When calculating indicators (coefficients), we use precautionary principle, that is, the recalculation of the assets of the balance sheet downwards based on an expert assessment.

1.1. To assess the financial condition of the Borrower, three groups of performance indicators are used:

liquidity ratios;

equity ratio;

turnover and profitability indicators.

I. Liquidity ratios.

Allow to analyze the ability of the enterprise to meet its current obligations. As a result of the calculation, the degree of provision of the enterprise with working capital for settlements with creditors for current operations is established.

Absolute liquidity ratio K1 is the most stringent criterion for the liquidity of an enterprise and shows what part of short-term debt obligations (the result of section Y of the balance sheet minus lines 640 - “deferred income”, 650 - “reserves for future expenses”) can be repaid, if necessary, at the expense of available funds, funds for deposit accounts and highly liquid short-term securities, while taking into account only government securities, securities of the Savings Bank of Russia and funds on deposit accounts.

Intermediate coverage ratio (quick liquidity ratio) К2 characterizes the ability of the enterprise to quickly release funds from the economic turnover and pay off debt obligations. K2 is defined as the ratio:

To calculate this ratio, the groups of articles “short-term financial investments” and “accounts receivable (payments for which are expected within 12 months after the reporting date)” are preliminary evaluated. These items are reduced by the amount of financial investments in illiquid corporate securities and insolvent enterprises and the amount of uncollectible receivables, respectively.

Current liquidity ratio (total coverage ratio) K3 gives a general assessment of the liquidity of the enterprise, the calculation of which includes all current assets, including tangible assets (the result of section II of the balance sheet).

To calculate K3, the already named groups of balance sheet items are preliminarily adjusted, as well as “accounts receivable (payments for which are expected in more than 12 months)”, “stocks” and “other current assets” by the amount of bad receivables, illiquid and hard-to-sell stocks, respectively.

II. Equity ratio K4

Shows the share of the enterprise's own funds in the total amount of the enterprise's funds and is defined as the ratio of own funds (the result of section III of the balance sheet, increased by the amount of 640 "deferred income" and 650 - "reserves for future expenses") to the total amount of the enterprise's funds (p. 700 ).

III. Turnover and profitability indicators

The turnover of various elements of current assets and accounts payable is calculated in days based on the volume of daily sales (one-day sales proceeds).

Daily sales volume is calculated by dividing sales revenue by the number of days in the period (90, 180, 270, or 360). Average (for the period) values ​​of current assets and accounts payable are calculated as the sum of half values ​​for the beginning and end dates of the period and full values ​​for intermediate dates, divided by the number of terms, reduced by 1.

Turnover of current assets:

Accounts receivable turnover:

Inventory turnover:

Similarly, if necessary, the turnover indicators of other elements of current assets (finished products, work in progress, raw materials and materials) and accounts payable can be calculated.

Profitability indicators are determined in percentages or shares.

Profitability of products (or profitability of sales) K5:

Profitability of the enterprise K6:

Return on investment in the enterprise:

1.2. The main estimated indicators are the coefficients K1, K2, K3, K4, K5 and K6. Other indicators of turnover and profitability are used for general characteristics and are considered as additional to the first six indicators.

Evaluation of the results of calculations of six coefficients consists in assigning a category to the Borrower for each of these indicators based on a comparison of the obtained values ​​with the established sufficient ones. Further, the sum of points for these indicators is determined in accordance with their weights.

Sufficient values ​​of indicators:

K4 - 0.4 - for all Borrowers, except for trade enterprises

0.25 - for trade enterprises

Breakdown of indicators into categories depending on their actual values ​​(Table 10).

Table 10. Breakdown of indicators into categories

The next step is to calculate the total score (Table 11).

Table 11. Calculation of the sum of points:

The formula for calculating the sum of points S is:

The S value, along with other factors, is used to determine the Borrower's rating.

For the remaining indicators of the third group (turnover and profitability), optimal or critical values ​​​​are not set due to the large dependence of these values ​​on the specifics of the enterprise, industry affiliation and other specific conditions.

Evaluation of the calculation results of these indicators is based mainly on the comparison of their values ​​in dynamics.

1. Qualitative Analysis based on the use of information that cannot be expressed in quantitative terms. Such analysis uses information provided by the Borrower, the security unit and database information.

At this stage, the risks are assessed:

– industry(state of the market in the industry; trends in the development of competition; level of state support; the importance of the enterprise on a regional scale; the risk of unfair competition from other banks);

– joint-stock(risk of redistribution of share capital; consistency of positions of major shareholders);

– regulation of the enterprise(subordination (external financial structure); formal and informal regulation of activities; licensing of activities; benefits and risks of their cancellation; risks of fines and sanctions; law enforcement risks (possibility of changes in the legislative and regulatory framework));

– production and management(technological level of production; supply infrastructure risks (changes in supplier prices, disruption of supplies, etc.); risks associated with banks in which accounts are opened; business reputation (accuracy in fulfilling obligations, credit history, participation in large projects, quality goods and services, etc.) quality of management (qualification, stability of the management position, adaptability to new management methods and technologies, influence in business and financial circles)).

3. The final stage Credit rating is the determination of the Borrower's rating, or grade.

There are 3 classes of borrowers:

first-class - lending which is beyond doubt;

second class - lending requires a balanced approach;

third class - lending is associated with increased risk.

1 class creditworthiness: S = 1.25 or less. A prerequisite for classifying the Borrower in this class is the value of the K5 coefficient at the level established for the 1st class of creditworthiness.

Grade 2 creditworthiness: the value of S is in the range from 1.25 (not inclusive) to 2.35 (inclusive).

3rd class of creditworthiness: the value of S is greater than 2.35.

Further, the preliminary rating determined in this way is adjusted taking into account other indicators of the third group and the qualitative assessment of the Borrower. If these factors have a negative impact, the rating can be reduced by one class.

Federal State Educational Budgetary Institution

higher professional education

"Financial University under the Government of the Russian Federation"

(Financial University)

Department of "Banks and banking management"

COURSE WORK

"Methods for assessing the creditworthiness of commercial bank customers"

Student of the Faculty of Finance and Credit

Scientific adviser: Ph.D., Kalinichenko N.P.

Moscow 2013

Introduction

1.1 The concept of creditworthiness

2 The evolution of ideas about the criteria for assessing creditworthiness

3 International practice for assessing the financial condition of a borrower

Chapter 2. New phenomena in assessing the creditworthiness of a borrower in Russian commercial banks

3 Neural network as a tool for assessing the borrower's creditworthiness

Conclusion

Bibliography

Introduction

For the modern system of the economy of the Russian Federation, bank lending is of great importance. It allows enterprises to expand production and use additional resources to speed up the circulation of the product. Lending is the main component of the bank's activity, the basic source of investment, contributes to the continuity and acceleration of the reproduction process, strengthens the economic situation and can take a central place in the volume of banking services that generate profit.

However, at present, the possibilities of bank lending in our country have not yet been fully realized. Organizations and commercial banks do not have sufficient opportunities for the widespread use of credit services in the development of their activities. Neither one nor the other can ignore the banking risks arising from credit transactions. Banks are in danger of entering into a contract with insolvent borrowers and, as a result, incur significant losses, while organizations, in turn, not only cannot always repay the loan and due interest on time, but also use the loan due to low profitability of production, incorrect assessment of their creditworthiness and because of the higher interest rate. And as a result, despite the growth in the number of loans issued by commercial banks, and their use as a source of fixed capital formation, they still have a low share.

All this led to the choice of the topic of the course work.

It is impossible not to notice that when conducting active operations, commercial banks are guided by the norms of the Bank of Russia and internal, independently developed instructions and regulations, which are not without drawbacks. Independently developed regulations for commercial banks on calculating creditworthiness, organizing customer lending are often formal in nature, and are separated from the theoretical base and accumulated world and domestic experience in this area.

The purpose of my course work is to study issues related to the construction and use of the process of analyzing the creditworthiness of clients of a commercial bank, and possible directions for its improvement in modern conditions.

To achieve this goal, the paper examines the development trends in assessing the borrower's creditworthiness in Russian commercial banks, the evolution of ideas about the criteria for assessing creditworthiness, as well as international practice in assessing the financial condition of the borrower, and also reviews new methods in assessing the borrower's creditworthiness.

To write the work, I used regulatory and legal materials, literature of an educational and methodological nature, materials from periodicals, monographs.

1.1 The concept of creditworthiness

In the economic literature of the Soviet period, the term "creditworthiness" is almost never found. This situation can be explained by the limited use of commodity-money relations over a long period of time, as well as by the fact that credit relations, which mainly developed in the form of direct bank credit, were characterized not by economic, but by administrative management methods, characterized by a high level of centralization of law. making final decisions. This made it unnecessary to assess the borrower's creditworthiness when deciding whether to issue a loan. In addition, structural changes in the financial position of enterprises due to the excessive pace of industrialization have led to the fact that most enterprises have become insolvent borrowers since the late twenties. For a long time, the credit mechanism was focused on the credit intensity of enterprises, which reflected the average level of development of the country's credit mechanism as a whole. The changes that have taken place in the modern economy have drawn attention to the need to ascertain the creditworthiness of a bank client.

The specifics of the development of the banking sector, especially in Russia, plays a key role in understanding the process of evolution of the concept of "creditworthiness", revealing the economic meaning invested in it. Creditworthiness can be considered from different points of view, depending on the worldviews of economists prevailing at one time or another. Assessing the development of the trend of credit relations in our country, we can draw conclusions about the close relationship between the concepts of creditworthiness and the development of credit relations.

The creditworthiness of a commercial bank client is the client's ability to fully and on time pay off his debt obligations (principal and interest).

Unlike the solvency of the borrower, creditworthiness does not indicate default on obligations for the past period or on a specific date, but implies the ability to repay borrowed funds in the near future. The level of insolvency in the past is one of the formal indicators that are taken into account when assessing the creditworthiness of a client. If the borrower has an overdue debt, and the balance sheet is liquid and the amount of equity capital is sufficient, then a one-time delay in payments to the bank in the past is not a basis for concluding that the client is not creditworthy. Reliable and stable clients will not allow long-term non-payments to the bank, suppliers, and the budget.

The level of creditworthiness of the client indicates the level of individual bank risk associated with the issuance of a particular loan to a particular client.

Domestic and world banking practice allows us to focus on the following criteria of the borrower's creditworthiness: the nature of the client, the ability to borrow funds, the ability to earn funds in the course of current activities to repay the debt (financial opportunities), capital, loan collateral, the conditions under which a loan transaction is made, control (legislative basis for the borrower's activities).

The quality of the collateral and the reliability of the order are especially important when the client's cash flow is insufficient.

The conditions under which a credit transaction is made include the current or projected economic situation in the country, region and industry, political factors. These conditions determine the degree of the bank's external risk and are taken into account when deciding on the bank's standards for assessing cash flow, balance sheet liquidity, capital adequacy, and the level of borrower management.

1.2 The evolution of ideas about the criteria for assessing creditworthiness

creditworthiness of a commercial bank borrower

Usury is the foundation for the emergence of lending in both domestic and foreign history. The predominant sector of the Russian economy was agriculture, where the main type of organization was the landowner's estate, the leading estate was the nobility, and therefore the most common type of loan relations was lending to landlords and nobles on the security of land. Under such conditions, the main conditions for the reliability of the borrower were his name, the number of lands provided as collateral, and the number of souls in the property.

At the next stage in the development of the Russian banking system in the 18th - the first half of the 19th century, state ownership prevailed in the banking system, and the leading role was given to state (state) credit institutions.

Due to the insufficiency of private lending, the growth of interest rates from usurers continued, which means that the need to organize credit institutions also increased. In 1754, the State Bank for the nobility in St. Petersburg and Moscow was created under the Senate and the Senate office, as well as the Bank for the improvement of merchant affairs at the St. Petersburg port. As it turned out later, these actions were taken only to protect a special group of borrowers - the nobility, for the rest of the population, the result of limiting interest was only an increase in the cost of credit and complication of the conditions for obtaining a loan.

Thus, we can say that the result of the development of credit relations until 1860 was the emergence and strengthening of the positions of the main, peculiar type of borrower - it was the landowner, the owner of the estate and the peasants. Historically, it can be confirmed that the bulk of lending services accounted for this type of borrower. And as a result, the quality of loans has deteriorated significantly, since in assessing creditworthiness, the decisive role was played not by clear and equal criteria for everyone, but by proximity to power and belonging to a certain circle, class.

Then, in 1860, the State Bank was established. As recorded in the Charter, approved on May 31, 1860, the creation of this bank was due to the need to solve two main tasks: the bank was created to solve two important tasks: to revive trade and strengthen the monetary credit system. So, the creation of a full-fledged commercial credit institution was carried out in the person of the State Bank.

Small credit institutions actively developed from the middle of the 19th to the beginning of the 20th century. A feature of the initial stage of the formation of small credit institutions was that the peasants were not literate enough and could not do this on their own, moreover, general supervision over this area was not organized. As a result, there is a lack of collateral and guarantees, frequent rewriting of a loan for a new term, and misuse of borrowed funds. Only after that, the importance began to indulge in the presence of collateral, and not in assessing the creditworthiness of the borrower.

Thus, we can say that the result of the development of credit relations until 1817 was the emergence of a transition from lending by position and connections to a system based on the analysis and assessment of the client's creditworthiness. The ability to generate income has become the main measure of the creditworthiness of an organization. The opportunity to expand reproduction contributed to the release of funds from the circulation and the direction of their liquidation of loan debts. The business reputation and moral qualities of the borrower have become objects of close attention.

Significant transformations in the country's banking system took place after 1917, as a result of the October Revolution. The state monopoly began to extend to banking (the Decree "On the Nationalization of Banks", which was adopted at the end of 1917), all existing private banks and banking offices were to be merged with the State Bank. Commodity-money relations were undermined and subjected to curtailment, and this was the reason for a sharp narrowing of the sphere of payments and credits.

The Soviet period was marked by significant changes in the principles of lending. The real needs of borrowers for funds and the possibility of repaying the loan were not taken into account, the approved plans and estimates were the basis for lending to organizations. The practice of writing off unpaid loans as losses was widespread. Planned indicators, the values ​​of which were obtained from above, played a greater role in the issuance of a loan than the actual position of the borrower, the real creditworthiness of the borrower was not taken into account.

Thus, by the beginning of the 21st century, the reforms led to the formation of a two-tier banking system. Commercial banks carry out lending to clients completely independently. Obeying the laws of market relations, banks are forced to develop methods for assessing lending. The term creditworthiness is gaining meaning again.

Currently, the key indicator of the client's creditworthiness has become its rating. The creditworthiness rating (credit rating) is a universal value, which is formed on the basis of a set of certain criteria. The process of determining a credit rating consists in converting the values ​​of a series of indicators inherent in the activities of the borrower to an aggregated value of one indicator that determines the level of creditworthiness. The appearance of the rating is caused by the need for an integral indicator that has a high degree of information in the analysis of creditworthiness.

1.3 International practice of assessing the financial condition of the borrower

Both in our country and around the world, there are many methods for assessing the financial situation of a bank client. The amount of knowledge accumulated in this area is very significant. It cannot be denied that in modern conditions the use of this knowledge is not only possible, but also necessary, since general recommendations on assessing the creditworthiness of a commercial bank client are often insufficient and very formal, and each individual organization has its own, subjective assessment methods. I will give examples of some methods developed over the years for assessing the creditworthiness of a borrower.

A technique used by some Australian banks.

There are four main groups of factors involved in rating calculation:

1. financial ratios calculated according to the financial statements of the borrower;

2. cash flow indicators;

Evaluation of the borrower's management;

Industry specifics of the borrower's activity.

When determining the rating, 2-3 indicators in each group are mainly used. The internal rating scales of many banks are aligned with the scales of the Moody, s and Standard & Poor's rating agencies, which made it possible to compare the ratings of different borrowers. Each rating value corresponds to the default probability of a borrower of this class. Comparison of this probability and the level of possible loss for individual active transactions allows you to effectively manage the amount of credit risk.

Generalized methodology of American banks.

Most US banks consider the following factors when determining a borrower's creditworthiness:

analysis of the financial statements of the borrower. The cash flow of the borrower, his ability to meet the loan obligations in due time are carefully considered;

analysis of the borrower's industry. Economic cycles in the industry. The state of the industry at a given point in time and forecast values ​​for the period of the loan;

The quality of the borrower's financial statements. In the recent past, the reporting of an enterprise was recognized as reliable and reliable based on the results of an audit. However, the coverage of recent corporate scandals in the US and Europe related to the distortion of accounting information has fundamentally undermined the credibility of the institution of analysis and audit. Now the global banking and economic community is actively searching for tools to confirm and certify the reliability of reporting.

the borrower has a credit rating assigned by a rating agency;

assessment of the borrower's management level;

the size of the borrower's company (the sum of revenue and assets, capitalization according to the stock market data);

In the practice of American banks, the “five-si rule” is often used (it got its name from the first letters of the customer selection criteria - they are all indicated by words starting with the letter “si”):

· character (character of the borrower);

capacity (financial opportunities);

capital (capital);

collateral (providing);

conditions (general economic conditions).

Methodology of French banks.

In France, the definition of the borrower's creditworthiness consists of three blocks:

1) general financial and economic assessment of the enterprise;

2) applied assessment of creditworthiness, specific for each bank;

3) applying to the card file of the Bank of France.

The first block implies the nature of the organization's activities, the features of its work, and information about the factors of production. The remaining two blocks are studied by specialists in the following aspects: labor resources (education, competence and experience of management, the presence of successors, the frequency of movement of the manager in the workplace, staff structure, wages); production resources (the ratio of depreciation and depreciable fixed assets, the level of investment, the degree of wear and tear of equipment); financial resources; economic environment (current stage of the life cycle of products, whether there is a monopoly of the manufacturer, the level of development of management and marketing).

In the second block, a formalized assessment of the borrower is carried out, based on the balance sheets and profit and loss statements. So, "Credit Lion" uses the following five indicators:

K x = Gross Operating Income: Value Added;

K 2 = Financial costs: Value added;

K 3 = Capital investment per year: Value added;

K 4 = Long-term liabilities: Value added;

K 5 = Net cash balance: Turnover,

where Value added = Revenue - Material costs;

Gross Operating Income = Value Added - Costs.

The calculation data of indicators subsequently form their sum with weight coefficients, the value of which implies the result of the second block of analysis.

Applying to the card file allows the bank to get assumptions about the nature of the future borrower from an unbiased observer (the Bank of France) and learn more about the borrower's credit history.

Chapter 2. New phenomena in assessing the creditworthiness of a borrower in Russian commercial banks

2.1 Trends in the use of credit rating as the main indicator of the borrower's creditworthiness

So, the main of the indicators characterizing the creditworthiness of the borrower is his credit rating.

It is advisable to consider a credit rating from several angles: credit rating from the point of view of domestic and western prudential supervision authorities (I); credit rating from the point of view of domestic and western commercial banks (II). There are other approaches as well.

Currently, credit institutions are guided by the Regulation of the Central Bank of the Russian Federation dated March 26, 2004 No. 254-P “On the procedure for creating reserves for possible losses on loans, on loans and equivalent debts”. The transition from theoretical postulates to the direct use of the creditworthiness indicator was due to the adoption of this particular document. For example, one of the components of determining the category of loan quality is the financial position of the borrower. Regardless of the fact that each credit institution independently determines and approves the list of financial indicators and the procedure for their calculation, the reliability of determining credit risk is increased by determining the financial condition of the borrower as good, medium or poor, which makes it possible to determine its risk level with higher accuracy.

In accordance with Instruction No. 1, credit risk ratios N b, N 7 and N 9 have a general calculation procedure: the total amount of claims on a particular person (group of persons) is weighted by risk and correlated with the amount of the bank's own funds. Obviously, the standards are set on an absolute, quantitative basis. Also, such calculations do not take into account the financial position of the borrower, his creditworthiness. Although assets are “risk-weighted”, such weighting is not based on an assessment of the company's creditworthiness.

When calculating the capital adequacy ratio H t, the bank's capital is correlated with risk-weighted assets. In such a case, we are interested in loans issued to enterprises and organizations. The assignment of some loans to II and III risk groups is due to the presence of a guarantee of the Government of the Russian Federation, a pledge of precious metals in ingots; pledge of securities of the subjects of the Federation and guarantees of state authorities of the subjects of the Federation. The majority of issued loans belong to V, the most risky group, and there is no difference between borrowers with high and low creditworthiness.

The standards discussed above do not reflect the relationship between the level of the borrower's creditworthiness and the amount of credit risk. When calculating the capital adequacy ratio, assets are weighted according to the degree of risk, moreover, loans granted to third parties can most often be attributed to risk group V. Further classification of loans, based on the creditworthiness of various enterprises, is of no practical importance, since it is not capable of influencing the degree of credit risk in order to calculate the capital adequacy ratio. Credit risk standards assess the absolute value of the risk and do not take into account its nature. Organizations with different financial condition are equated to one another, despite the obvious differences in the degree of risk arising from a credit transaction. At the same time, commercial banks also experience certain disadvantages, since, for example, the calculation of the norm H (indirectly limits the ability of a bank to lend to the real sector of the economy.

Thus, the following situation has developed in domestic banking practice. On the one hand, commercial banks are forced to calculate indicators and credit risk ratios in accordance with the requirements of the Bank of Russia. These indicators are unable to act as a productive tool for managing credit risks, since they not only do not take into account the objective differences in the activities of borrowers, but are also unable to determine the level of risk in the short term. On the other hand, the need for daily monitoring of credit risks forces banks to develop their own calculation methods. This complicates the work of the bank, increasing the document flow and time costs.

2.2 Algorithm for assigning a credit rating to a borrower

As noted earlier, the assignment of a credit rating in most cases is a subjective process, not only based on mathematical calculations, but also taking into account the human factor. It seems that the main problems lie in the high probability of incorrect assessment of the borrower, which can lead both to a distortion of the degree of risk taken on credit operations, and to the inadequacy of the interest rate policy on the allocated resources.

The assignment of a credit rating consists in the transition from a set of indicators to a single value - the rating. There are three main approaches to determining a credit rating: statistical calculation methods, limited peer review and direct peer review. Models of direct peer review are usually the know-how of its developers, and the sequence of actions cannot be described and is determined by the qualifications of a particular loan officer. This method is quite expensive and is used mainly by the world's leading rating agencies.

Determination of a credit rating based on the results of statistical calculations is used in assessing the quantitative indicators of the borrower's activity. Limited peer review models are based on the application of statistical methods with subsequent adjustment based on some qualitative parameters.

Quantitative indicators are the financial statements of the borrower, and qualitative factors are the macroeconomic situation, industry specifics, the position of the borrower in the market, management assessment, etc. Credit ratings are calculated based on quantitative indicators using statistical methods. Then the rating value is additionally modified taking into account qualitative factors.

Until recently, the most popular method of assigning a credit rating, based on the quantitative indicators of the borrower's activity, was the scoring of indicators based on the calculation of a linear relationship between the coefficients that form the rating. Stages of such an assessment:

1) calculation of indicators involved in the credit rating;

2) establishing a scale of "classiness" of the indicator based on its value;

3) distribution of weights between indicators;

Let's consider the methodology for calculating these indicators using the example of OAO Lukoil (calculations were made according to data from Appendix 1, Appendix 2).

Liquidity ratios

1.Current liquidity

2.Fast liquidity

3. Absolute liquidity

Turnover ratios

1. Accounts receivable turnover

2. Asset turnover

3. Turnover of fixed capital

Profitability

1. Return on assets

2. Return on equity

=

Analysis of debt service ratios

Coverage ratio %

Analysis of financial leverage

Comparing the main indicators of LLC LUKOIL for the 2012 reporting year with the previous 2011, one can notice the first positive factor - current liquidity increased from 3.84 to 3.95. The increase in liquidity is a positive factor in view of the application for a loan, since in the event of an urgent payment, OOO LUKOIL will be able to make payments as soon as possible. If we compare the indicators of OOO LUKOIL with the indicators for the industry, then the return on assets of Lukoil is 11.49%, and the return on assets in the industry as a whole is 3.51%. Return on equity is 15.63%, and 5.52% for the industry. Quick liquidity is 1.3%, while in the industry as a whole it is 0.51%. This factor is also positive, as Lukoil is able to make loan repayments faster than its competitors, which is an advantage in issuing a loan. The current liquidity is also higher than the current liquidity in the industry (1.95% vs. 0.66%). The interest coverage ratio is 139.95, while the industry value is 321.45. This is an average indicator for the company, the company's profit will be enough to cover interest on debts, especially considering that Lukoil has Debt-to-assets = 25.03%, that is, the company's debt is 25% of the capital structure of OOO LUKOIL. The financial independence ratio is 9.04 against 13.73, which is also a positive feature for the company.

Thus, based on the data obtained from the results of my financial analysis, it is possible to assign OAO Lukoil the 1st (highest) quality category. This means that there is no credit risk (that is, the probability of financial losses in case of default is minimal or equal to 0).

In the long term, there are no negative trends that could affect the financial stability of OAO Lukoil.

2.3
Neural network as a tool for assessing the borrower's creditworthiness

At the present stage, the world is actively developing a new applied area of ​​mathematics specializing in artificial neural networks (NN). The growing interest in NNs is explained by their successful application in various fields of activity in solving problems of classification and forecasting. Neural networks are becoming indispensable in solving the most complex multidimensional problems, since they have such characteristics as the ability to non-linear modeling and the relative ease of implementation.

A neural network is a multilayer network structure consisting of the same type of elements - neurons that imitate the work of the human brain. Neurons interconnected by a complex topology of interconnections are grouped into layers, from which the input and output layers are distinguished. In neural networks used to analyze and predict creditworthiness, the neurons of the input layer perceive information about the financial performance of the enterprise, and the output layer signals a possible reaction to this situation. First, the neural network goes through a special tuning stage - training. As a rule, the network is presented with a large number of pre-prepared examples, for each of which the required reaction is known in the form of assigning one or another rating value. After a certain training period, the network reaches a state in which it is possible to assign a credit rating to an enterprise with a high degree of accuracy.

For quite a long time, the main area of ​​application of neural networks was in the military-industrial complex. But the availability of wide opportunities for solving banking and financial problems has led to the retraining of a number of major developers of NS to create systems designed specifically for solving banking problems. Regarding the banking sector, the following basic types of tasks are distinguished that can be solved with the help of the National Assembly:

· Forecasting time series (currency rates, stocks, etc.);

· Research and identification of deviations in the behavior of the object (detection of abuse in the field of plastic cards);

Recognition of the client's signature;

· Classification of borrowers depending on the level of credit risk.

The assignment of a credit rating consists in the transition from a series of indicators, most of them financial, to one transformed value - a rating. Most often, such a transition is carried out using a linear dependence equation. At the same time, the weights of the indicators involved in the calculation of the rating are set by each bank individually. As a result, the results of the analysis are distorted, which is extremely risky. It is the lack of capabilities of traditional statistical tools and the good results obtained in this area with the help of the National Assembly that contribute to the spread of a new method for assessing the creditworthiness of a borrower.

However, in Russia this method has not yet become widespread, although in world practice it is used quite widely when determining the credit risk of an individual borrower.

Basically, NN is used when the exact type of relationship between known input values ​​and unknown output values ​​is not clear. A feature of the NN is that the relationship between input and output values ​​is established in the process of network training. Two types of algorithms are used for NN training: supervised (supervised learning) and unsupervised (unsupervised learning). For controlled training of the network, you need a prepared set of training data. These data are sets of inputs and their corresponding outputs. The NN learns to establish a connection between the first and second. Typically, training data is taken from historical data. One of several algorithms can be used as a learning tool. If the network is trained well, it acquires the ability to formulate a certain function that relates the values ​​of input and output variables, and subsequently, when the values ​​of the output are unknown, such a neural network allows them to be predicted.

With regard to the analysis of the creditworthiness of the borrower, the training of the National Assembly takes place as follows: there is a set of enterprises with already assigned credit ratings. These ratings correspond to the values ​​of quantitative and qualitative indicators contained in the credit file. During the observation process, the National Assembly calculates the weight of each indicator that is taken into account when calculating the credit rating. The obtained values ​​of the weights are adjusted until the credit ratings of the entire initial population of borrowers calculated using these weights coincide with the given values. In this case, the learning error will be reduced to zero, and the NN will reproduce the exact type of relationship between the borrower's performance and its credit rating.

The process of solving a problem with the help of a neural network begins with the collection of data for training. The training data set is already known information, for which the values ​​of input and output variables are specified. The choice of variables, at least initially, can be done intuitively. At the first stage, the whole set of variables that can influence the result is considered. Then this set is reduced.

The high performance of the NN is explained by the following properties of the neural network:

· Ability to process information. Most of the known problems are solved with the help of NS. This is achieved due to the associativity of the network, the ability to classify, generalize and abstract;

· Self-organization. In the process of work, the NS independently or under the influence of the external environment learns to solve various problems. The neural network forms the algorithm of its activity, refining and complicating it over time;

· Learnability. In the learning process, the NN reveals non-linear relationships between variables, and based on this knowledge, offers its predictive values;

· Parallelism of information processing. Each neuron generates its output only on the basis of its inputs and its own internal state under the influence of some activation function.

Conclusion

Despite significant positive qualities, at present, the possibilities of bank lending in our country have not yet been fully realized. Organizations and commercial banks do not have sufficient opportunities for the widespread use of credit services in the development of their activities. Neither one nor the other can ignore the banking risks arising from credit transactions.

At the same time, the methodological support of Russian commercial banks is often based only on the practice and understanding of an individual specific bank.

The creditworthiness of the borrower means the ability to make a deal to provide value on terms of repayment, urgency and payment, or, in other words, the ability to make a credit deal. In the process of managing credit risk, commercial banks use a set of criteria and calculated coefficients, the consideration and analysis of which allow us to draw a conclusion about the level of creditworthiness of the borrower. In various banks, the set of indicators characterizing the position of the borrower is heterogeneous and changes in the process of developing credit relations.

Currently, the key indicator of the client's creditworthiness has become its rating. The creditworthiness rating (credit rating) is a universal value, which is formed on the basis of a set of certain criteria. The appearance of the rating is caused by the need for an integral indicator that has a high degree of information in the analysis of creditworthiness.

In domestic banking practice, the following situation has developed. On the one hand, commercial banks are forced to calculate indicators and credit risk ratios in accordance with the requirements of the Bank of Russia. These indicators are unable to act as a productive tool for managing credit risks, since they not only do not take into account the objective differences in the activities of borrowers, but are also unable to determine the level of risk in the short term. On the other hand, the need for daily monitoring of credit risks forces banks to develop their own calculation methods. This complicates the work of the bank, increasing the document flow and time costs.

Until recently, the most popular method of assigning a credit rating, based on the quantitative indicators of the borrower's activity, was the scoring of indicators based on the calculation of a linear relationship between the coefficients that form the rating.

At the present stage, the world is actively developing a new applied area of ​​mathematics specializing in artificial neural networks (NN). Neural networks are becoming indispensable in solving the most complex multidimensional problems, since they have such characteristics as the ability to non-linear modeling and the relative ease of implementation.

However, this method has not yet become widespread in Russia, although it is used quite widely in world practice.

Thus, in the field of methods for assessing the creditworthiness of clients of a commercial bank, not everything has been studied and developed yet, which leaves a wide field for research.

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Introduction. 2

CHAPTER 1. THEORETICAL ASPECTS OF ASSESSING THE BORROWER'S CREDIT POSSIBILITY.. 6

1.1. Credit policy as the main tool for achieving the strategic goals of a commercial bank. 6

1.2. Organization of the credit risk management process in a commercial bank 15

1.3. Creditworthiness of the borrower and methods of its assessment. 26

CHAPTER 2. ANALYSIS OF CREDIT POSITION OF THE BANK CLIENT.. 42

2.1. Comparative analysis of the credit policy of ZAO CB Pyatigorsk and OAO Stavropolpromstroybank. 42

2.2. Assessment of the creditworthiness of the borrower. 56

2.3. The effectiveness of the methodology for assessing the creditworthiness of the borrower and its improvement. 72

Conclusion. 90

LIST OF SOURCES USED.. 93

The credit and financial system is one of the most important and integral structures of a market economy. The development of the banking system and commodity production historically proceeded in parallel and were closely intertwined. Being at the center of economic life, banks mediate ties between depositors and producers, redistribute capital, and increase the overall efficiency of production.

Credits play a special role, turning, in essence, into the main source of financing the national economy with additional monetary resources. With the transition from a command-and-control to a market economy, the monopolized, state-owned banking structure becomes more dynamic and flexible. The banking system is based on private and collective ownership and is focused on overcoming competition and making a profit.

In the process of conducting active credit operations in order to make a profit, banks are faced with credit risk, that is, the risk of non-payment by the borrower of the amount of principal and interest due to the lender. Each type of credit transaction has its own reasons and factors that determine the degree of credit risk.

In particular, it may arise when the borrower's financial situation worsens, unforeseen complications occur in his plans, collateral is not insured, the manager lacks the necessary organizational skills or experience, etc. These and many other factors are taken into account by bank employees when assessing the creditworthiness of an enterprise and the security offered as collateral.

The tasks of improving the functioning of the credit mechanism put forward the need to use economic methods of credit management, focused on observing the economic boundaries of the credit. This will prevent unjustified loan investments, ensure timely and full repayment of loans, and reduce the risk of non-payment.

When analyzing creditworthiness, banks must decide the following questions: is the borrower able to fulfill his obligations on time, is he ready to fulfill them? The first question is answered by an analysis of the financial and economic aspects of the activities of enterprises. The second question is of a legal nature, and is also related to the personal qualities of the leaders of the enterprise. The composition and content of the indicators follow from the very concept of creditworthiness. They should reflect the financial and economic condition of enterprises in terms of the efficiency of placement and use of borrowed funds and all funds in general, assess the ability and willingness of the borrower to make payments and repay loans within a predetermined period.

The topic of this thesis: “The effectiveness of the methodology for assessing the creditworthiness of a client” is extremely relevant. Any activity, whatever it may be, contains a certain amount of risk and chance of the most varied nature. Any economic activity is subject to uncertainty associated with changes in market conditions, i.e. to a large extent with the behavior of other economic entities, their expectations and their decisions. Therefore, interest in this topic will never decrease, and the methods will be expanded and supplemented. Most of all, banks need information about the creditworthiness of enterprises and organizations: their profitability and liquidity largely depend on the financial condition of customers. Risk reduction in lending transactions can be achieved on the basis of a comprehensive study of the creditworthiness of bank customers, which at the same time will allow organizing lending, taking into account the boundaries of the use of the loan. Based on the studied material, this topic is quite widely disclosed and is of great interest for a deeper study, especially in terms of the effectiveness of methods for assessing the creditworthiness of enterprises.

This topic is of great interest for the study of not only Russian but also foreign economists. In the scientific literature, attention is paid in great detail to all aspects of this problem, in particular, to the financial analysis of both enterprises and credit institutions. But there is not enough information on evaluating the effectiveness of the methods used by banks to assess the creditworthiness of customers.

The purpose of this thesis is to study approaches to the analysis of the creditworthiness of customers, including the example of the activities of the commercial bank Pyatigorsk, and on this basis, to develop recommendations for improving this process. To achieve the goals set, it is necessary to solve the following tasks:

Define the bank's credit policy

Define creditworthiness and credit risk,

Determine the information base of the analysis,

Analyze and compare the credit policy of ZAO CB Pyatigorsk with the credit policy of OAO Stavropolpromstroybank,

Analyze the methodology for assessing the creditworthiness of a client using the example of Stroytekhtsentr LLC,

Consider the trend in the financial condition of the bank,

Determine the effectiveness of the methodology for assessing the creditworthiness of a bank client.

When writing the work, the economic literature of domestic and foreign authors was used, revealing the principles and methods for studying the creditworthiness of borrowers of credit institutions in the USA, France and Russia, the financial statements of Stroytekhtsentr LLC, which operates in accordance with the charter and other constituent documents, the financial statements of CJSC CB Pyatigorsk ". A lot of information on this topic is presented in periodicals such as Banking, Money and Credit, Audit and Financial Analysis, Banking Journal, Kommersant, Economics and Life. In addition, the thesis was based on laws, instructions and other legal acts, as well as internal regulations and instructions of a commercial bank.

For clarity, the thesis reflects diagrams, graphs and tables.

The practical significance of the thesis lies in the conclusions that will help commercial banks improve their methodology for determining the creditworthiness of a client, and, consequently, improve their financial performance.

The credit policy of a commercial bank is a system of monetary measures carried out by the bank to achieve certain financial results, and is one of the elements of banking policy.

At the first stage of the implementation of the credit policy, the assessment of the macroeconomic situation in the country as a whole, the region of work of potential borrowers in particular, the analysis of the sectoral dynamics of the selected areas of lending, the verification of the readiness of the bank's staff to work with various categories of borrowers, the adoption of a number of intrabank regulatory documents. The work carried out takes place outside the field of activity of the direct credit unit and relates more to the work of the analytical and marketing services of the bank, but the presence of these necessary elements of analysis makes the lending process meaningful and prepared.

Based on the studies carried out, the bank's management adopts a credit policy memorandum for a specific period (usually 1 year). This document sets out:

1. The main directions of the bank's credit work for the coming period, specific indicators of credit activity (norms and limits) that provide the necessary level of profitability and protection from credit risks, for example:

– the ratio of loans and deposits;

- the ratio of equity and assets;

– limits for segments of the bank's asset portfolio as a whole;

– limits for segments of the loan portfolio (limits for lending to enterprises of one industry, one form of ownership, one type of lending, etc.). Typically, the limit includes no more than 25% of the total loan portfolio. An increase in a certain segment beyond the limit is possible if there are ways to protect against this increased credit risk;

– client limits:

a) for shareholders (shareholders);

b) for old, with a certain history of relationships, clients;

c) for new clients;

d) for non-customers of the bank;

– geographic lending limits (required for banks with out-of-town branches with different levels of staff preparedness for high-quality lending work, as well as for monobanks, but wishing to conduct active operations in certain regions);

– requirements for working with collateral (types of collateral, formalization standards, margin in valuation, etc.);

– requirements for documentary execution and support of loans;

– the planned level of credit margin and mechanisms for making a decision to change it.

2. The Regulations on the procedure for issuing loans are approved, which reflects:

– organization of the credit process;

- a list of required documents from the borrower and standards for the preparation of draft loan agreements;

ORGANIZATION AND METHODS FOR ASSESSING THE CREDIT POSITION OF CORPORATE CLIENTS

KUCHIEV A.Z.,

graduate student,

North Ossetian State University. K.L. Khetagurov, Vladikavkaz,

e-mail: [email protected];

KUCHIEVA I.Kh.,

Candidate of Economic Sciences, Senior Lecturer, North Ossetian State University named after V.I. K.L. Khetagurov, Vladikavkaz,

e-mail: [email protected]

To date, many methods have been developed for assessing the creditworthiness of borrowers from the standpoint of their financial condition and the possibility of timely repayment of the loan. The formation of a single, universal methodology seems to be very difficult. The authors suggest ways to improve the analysis of borrowers' creditworthiness.

Key words: economics; banks; credit; credit rating; credit risk; Basel III; finance; financial condition; method.

ORGANIZATION AND CREDIT RATING METHODS FOR CORPORATE CUSTOMERS APPLICABLE

graduate student,

e-mail: [email protected];

PhD, Associate Professor,

The North Ossetian state university named after Khetagurov K.L., Vladikavkaz,

e-mail: [email protected]

In this article, the authors examine the organization and methods of assessing the creditworthiness of corporate customers of commercial banks, their structure and features.

To date, developed a variety of methodologies for assessing the creditworthiness of borrowers in terms of their financial status and capacity for timely repayment. Formation of a single, universal method is very difficult. The authors suggest ways to improve the analysis of the creditworthiness of borrowers.

Keywords: economy; banks; credit; credit rating; credit risk; Basel III; finances; financial condition; method.

JEL classification: G32, G34.

Currently, the topic of bank credit risks attracts the attention of researchers from various fields of economic science. The development of the banking services market for corporate clients is a natural

© A.Z. Kuchiev, I.Kh. Kuchieva, 2013

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nym process affecting the interests of many subjects of economic relations. The activity of any business entity is aimed at solving the problem of maximizing profits by minimizing losses. However, the amount of profit is not constant and depends on external and internal factors. To cover the shortage of funds, enterprises are forced to apply to banks for loans.

And today, when lending to the corporate clientele of banks is developing at a very fast pace, the banking sector is facing a number of problems. The most important of them is to prevent unjustified credit investments, ensure timely and full repayment of loans, and reduce the risk of non-payment.

The solution to this problem is a qualitative and effective assessment of the client's creditworthiness. However, the lending activity of Russian banks is marked by the lack of a well-established organization and methodology for assessing the creditworthiness of customers in most of them. Research in the field of assessing creditworthiness will make it possible to formalize the methodology for its assessment by banks, reduce credit risk and, as a result, improve the quality of the loan portfolio.

In current practice, the main criterion for the borrower's creditworthiness is its financial condition, the assessment of which is determined in the analysis process:

Financial results (profit, losses);

Liquidity and solvency of the enterprise;

Market position (business activity, competitiveness, stable dynamics of the market position);

Cash flow movements and forecast of their development and change of direction during the entire term of the loan agreement.

This also explains the choice of the main quantitative indicators of the borrower's activity to assess the creditworthiness of the enterprise, which include: liquidity ratios; business activity ratios; profitability (profitability) and leverage ratios.

Additional requirements of the Bank of Russia also include an analysis and forecast of the borrower's cash flow, sales and profit planning, business plan analysis and a feasibility study (feasibility study) of the loan. A relatively recent attempt was to get acquainted with the credit history of the borrower through the Bureau of Credit Histories and assign a credit rating to borrowers.

In the role of corrective assessment indicators, qualitative characteristics of the borrower's activities can be used: conscientiousness in fulfilling obligations under other contracts and to other creditors; level of management, including personal characteristics and competence of the management of the borrowing enterprise; business reputation; degree of dependence on government subsidies; general state of the market in the industry; the general position of an enterprise in the competitive environment of its sector or industry.

The result of the analysis of the financial condition of the borrower is the assignment of it to one of the groups of financial condition: good, average and bad.

Below are the main characteristics of groups of commercial bank borrowers according to their financial condition (Bondarenko, 2008, pp. 12-17).

1. Good financial condition:

1. Stability of production, a positive value of net assets, profitability and solvency, the absence of any negative phenomena (trends) that could affect the financial stability of the borrower in the future.

2. Average financial condition:

2. The absence of direct threats to the current financial situation in the presence of negative phenomena in the activities of the borrower, which in the foreseeable future may lead to financial difficulties.

3. Poor financial condition:

3. The borrower has been declared insolvent (bankrupt), or it is permanently insolvent, or there are negative phenomena, the probable result of which may be the permanent insolvency of the borrower.

Significant differences between enterprises in terms of the nature of their production activities cause some differences in the methods for assessing the creditworthiness of corporate borrowers used in different commercial banks. The structure of assessment methods and their grouping reflect the individual approach of the bank and depend not only on the characteristics of the clientele, but also on other factors, the most important of which are:

Availability of information;

Type and term of the loan;

Loan size and risk sensitivity;

Stage of the credit process.

The main methods for assessing the creditworthiness of the bank's client enterprises, which can provide complete and audited financial statements, various operational accounting data can serve as:

Method of financial ratios;

Cash flow analysis method;

Business risk analysis method.

ORGANIZATION AND METHODS OF CREDIT ASSESSMENT.

A. Method of financial ratios (Zharkovskaya, 2004, pp. 212-214)

The method of assessing the borrower's creditworthiness based on the analysis of financial indicators is quite common in Russian banking practice. This method is based on the financial statements of the enterprise for several reporting dates and allows you to assess the creditworthiness of the borrower on a number of financial indicators, which include the following 5 groups of indicators: liquidity ratios, efficiency and turnover ratios, financial stability ratios, profitability ratios, debt service ratios.

The creditworthiness indicators included in each of these groups can be very diverse; they are presented in the works of prof. I.D. Mamonova (Mamonova, www.elitarium.ru).

1. Liquidity ratios characterize the ability of an enterprise to quickly release from economic circulation the funds necessary for normal financial and economic activity and repayment of its obligations (Peshanskaya, 2003, p. 320).

2. Turnover ratios characterize the efficiency of the use of funds, i.e., the rate of transition of inventories into finished products, and then into cash. They complement liquidity indicators.

3. Financial stability ratios characterize the degree to which the borrower is provided with equity and make it possible to assess the amount of equity capital, as well as the degree of client's dependence on borrowed funds. The greater the borrower's dependence on attracted sources, the lower the level of its financial stability and, consequently, its creditworthiness.

4. Profitability ratios characterize the level of profitability and profitability, showing the efficiency of using all capital, both own and borrowed.

5. Debt service ratios show the part of the profit that is used to repay interest and fixed payments:

Thus, the totality of financial ratios makes it possible to characterize the financial condition of the borrower.

The disadvantages of the method of financial ratios include that, firstly, revenue and real cash flow do not coincide due to the peculiarities of accounting, and secondly, the reliability of reporting data is not guaranteed.

B. Cash flow analysis method (Mamonova, www.elitarium.ru).

The cash flow analysis method is a method for assessing the creditworthiness of a client, which uses actual indicators that characterize the turnover of funds from the borrower in the reporting period. This method differs from the method of assessing the borrower's creditworthiness by the method of financial ratios in that they are calculated on the basis of balance reporting indicators.

The analysis of cash flows quite accurately assesses the solvency of the borrower, since it shows the inflow of funds from all possible sources and their expenditure by directions of payments.

At the same time, a qualitative analysis of all the reasons for the excess of the outflow over the inflow of funds is necessary, therefore the analysis is carried out in all areas of the enterprise's activity (current, investment and financial).

In Russia, there is an accounting form No. 3 “Cash flow statement”, which appeared in 1993 and is compiled in a direct way. It characterizes the gross volumes of receipts and payments in all areas of activity, the difference between which forms a balance, which is called net cash flow.

Forecast values ​​are determined by extrapolating trends from past periods to future ones.

Analysis of cash flows allows you to solve the following tasks: to determine the financial capabilities of the enterprise and their dynamics; commensurate investment, financial and current activities; evaluate the impact of cash flows of financing on the financial stability of the enterprise.

As a result of the calculations, it is possible to estimate the value of the positive balance of cash flow for a certain period and draw conclusions regarding the ability of the borrower to "collect" the necessary amount of funds by the maturity of the loan debt and interest on the loan, as well as to determine the actual term of the loan agreement at the stage of preparing loan documentation taking into account the intensity of the borrower's projected cash flows.

B. Method of business risk analysis (Mamonova, www.elitarium.ru).

Business risk is the probability of non-completion of the circulation of the borrower's funds on time and with the expected effect for various reasons, leading to discontinuity or delay in the circulation of funds at certain stages. Business risk analysis allows assessing the probability of non-receipt of funds necessary to repay a loan and complements other methods for assessing the creditworthiness of bank customers.

There are several areas of business risk formation: type of activity of the borrower; competitive position; operational efficiency; management quality.

When assessing business risk, the features and specifics of the industry to which the borrower belongs are taken into account. As a result of the analysis, the borrower can be assigned to one of the groups depending on the level of business risk.

From our point of view, at present, in Russian conditions, this method gives the most accurate results for making the right decision regarding lending to a borrower, despite certain difficulties in obtaining the necessary information.

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But, unfortunately, credit risk analysis methods do not take into account some of the above factors that have a significant impact on the amount of credit risk. The practice of analyzing the creditworthiness of corporate borrowers in Russian commercial banks does not fully meet the current economic situation and needs to be brought closer to world standards, in other words, to improve the methodological support for analyzing and assessing the creditworthiness of borrowers.

In order to create conditions for banks to introduce a methodology for analyzing and assessing the creditworthiness of borrowers, taking into account the recommendations of the Basel Committee on Banking Supervision, in our opinion, the Bank of Russia needs the following:

1. Form a minimum set of financial indicators, the presence of which will be mandatory for inclusion in internal bank documents regulating the procedures for assessing the creditworthiness of borrowers. The principles on the basis of which a minimum set of financial indicators can be formed:

The maximum impact of the selected indicator on the assessment of the financial position of the borrower;

The indicators used should provide a comprehensive assessment of the activities of the enterprise.

2. Introduce as a mandatory condition the assignment of a credit rating to each borrower, the calculation of the probability of default and the construction of matrices for changes in the credit ratings of the clientele.

3. To offer banks as a standard corporate borrower rating system based on the Enterprise Monitoring program.

4. Introduce the procedure, frequency and determine the centers for advanced training of banking specialists involved in organizing the credit process.

Lessons from the global financial and economic crisis of 2009-2010 in the banking sector led to the publication in mid-2010 of a new document of the Basel Committee on Banking Supervision Basel-III, which significantly tightened the requirements for assessing credit and other banking risks and capital adequacy.

On the other hand, the practice of evaluating the investment projects themselves, for which loans are requested, that is, the practice of project lending, is not applied enough. In this regard, we consider it insufficient to limit ourselves to formal approaches in assessing the borrower's creditworthiness. For the purpose of project lending, it is necessary to analyze specific markets within which the project is supposed to be implemented, assess the risks of investment, analyze business plans, as well as other factors related to the project.

LITERATURE

Bondarenko S. V., Saprunova E. A. (2008). Comparative analysis of methods for assessing the borrower's creditworthiness // Finance and credit. No. 24. C. 12-17.

Zharkovskaya E.P., ArendsI.O. (2004). Banking. Lecture course. Moscow: OMEGA-L. C. 212-214.

Mamonova I.D. How banks assess the creditworthiness of their clients // Elitarium. Available at: http://www.elitarium.ru/2006/08/09/kak_banki_ocemvajut_kreditosposobnost_svoikh_klientov.html.

Regulation of the Bank of Russia No. 254-P dated March 26, 2004 (current version dated January 1, 2013) “On the procedure for the formation by credit institutions of reserves for possible losses on loans, on loans and equivalent debts”.

Bondarenko SV, Saprunova EA (2008). Comparative analysis of methodologies for assessing the creditworthiness of the borrower. finance and credit. No. 24, P. 12-17. (In Russian.)

Zharkovskaya EP, Arends I.O. (2004). banking business. Course of lectures. M.: Omega-L. P. 212-214. (In Russian.)

Mamonov I.D. How banks estimate solvency of the clients. Elitarium. Available at: http://www.elitarium. en/2006/08/09/kak_banki_ocenivajut_kreditosposobnost_svoikh_klientov.html/ (In Russian.)