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A Practical Approach to Change in Portfolio Management
Whether banks survived reasonably intact or had issues, the events of the past three years have left many banks revisiting their portfolio management process. The regulators have also weighed in on the issue, indicating that many financial institutions, including some of the world’s largest, had an unrealistic assessment of the risks in their loan portfolios. In particular, they noted that many failed to establish, measure, and adhere to a level of portfolio risk acceptable to the firm.
Commerce Bank, based in Kansas City, MO is one bank that performed well over the past three years. Kent Kirby, Managing Director of Portfolio Credit Risk Administration at Commerce, discusses what Commerce is doing to address these issues.
View Video :  What Is Your Credit Risk Management Plan?
Historical Performance is a Guide to Future Portfolio Strategy
Loan portfolio growth is coming, but a proper growth strategy needs to first understand what we have in our portfolios today and how we got there. Trend analysis is a key component of managing portfolio credit risk and critical for developing future strategies for your loan portfolio. If you don’t know where you have been, how can you know where you are going? In this webinar we will demonstrate how to analyze those trends and use them to identify emerging credit risk issues.
View Video: Are you ready for loan growth?
Portfolio Stress Testing
Portfolio stress testing should be more than just a regulatory requirement. It can also be an important element in your overall credit risk management strategy. After all, you can’t manage what you can’t measure.
If your stress testing strategy is to run stress tests on individual credits one-at-a-time and then add up the results, you need to attend this Webinar. Portfolio stress testing should allow you to:
• Identify concentrations in your portfolio
• Run stress test scenarios on pools of loans at the same time
• Analyze the results at the portfolio level
• Drilldown into the details on individual loans.
This type of portfolio stress testing helps you to predict where your next problems might be, at both the portfolio and individual credit levels. With this information, you will know where you should be focusing your efforts to maximize income through reduced loan losses and strategic loan growth.
Join DiCom as we discuss how stress testing can be a valuable tool in ensuring that your attention is focused on the correct credits in your portfolio and how it supports an overall risk-based approach to portfolio management. Topics discussed will include:
• Testing for capital adequacy versus credit quality
• Tactical strategies to consider as a result of stress testing
• Portfolio stress testing as a strategic portfolio management tool.
View Video: Portfolio Stress Testing
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