Credit risk administration is one of the most important functions of a financial institution because it is the lending process that feeds the local, regional, and national economies. The results of making good credit decisions provide institutions with their primary source of interest and fee income.
- Identify resources that are available to credit administrators to measure the external condition of the financial industry
- Develop habits that are excellent for credit risk management, including:
- Knowing regulatory guidance governing the credit granting process
- Effective internal credit policies and procedures
- Choosing the right personnel to serve in credit risk management
- Outstanding credit underwriting standards
- Effective loan approval system
- Credit risk rating proficiency
- Loan documentation, loan portfolio, and problem-loan management skills
In the present economic environment, senior management must focus on the internal management of their loan portfolios. Risk assets typically compose 50-80% of a financial institution’s total assets and most of those are loans. Risk assets are viewed by the investment community as a means to establish the value and form the basis of capital requirements assigned by the regulators. The primary reason why financial institutions fail is because of making bad loans or not managing problem loans effectively. Therefore, proper credit administration is mandatory to protect an institution’s overall health.
This session will cover the most effective habits of institutions who have proven to be good credit risk administrators. At the end of this session, participants will be able to compare their institution’s credit risk management skills with other institutions that achieved regulatory favor for their ability to manage the lending function.
Jeffery W. Johnson, MBA, Bankers Insight Group
Jeffery Johnson has been in financial services more than 40 years. He has been VP and senior lender for a large regional bank and SVP and commercial banking division manager for a community financial institution. Most of his career has been spent in credit administration, lending, business development, loan review, management, and training and development. Over the last 17 years, Jeffery has provided training for several banking associations and individual financial institutions nationwide.
Jeffery holds a bachelor’s in accounting from Morehouse College in Atlanta, an MBA in finance from John Carroll University in Cleveland, a Diploma of Graduation from the Prochnow School of Banking at the University of Wisconsin-Madison, and a Graduate Certificate in Bank Management from the First American Management Institute at the University of Pennsylvania’s Wharton School of Business.