The credit risk management of the Bank is mainly conducted by relevant functional departments and the loan-review committee. The credit review department is responsible for credit rating and credit review. The credit management department is responsible for formulation of credit policy and implementation of post-loan management. The risk management department is responsible for formulating the bank's risk management policies, asset classification review and disposition of non-performing assets. The loan-review committee of the Bank as the organization of credit review and evaluation is responsible for setting the conditions and the amount, as well as assessment of major loan projects, and report to the heads of the bank in charge for approval. The Bank implements a system that separate the department performing the review and loan from grading examination and approval for various types of credit projects and grants the one-level branch certain credit approval authority. The part exceeding the authority shall be reviewed by the loan review department of the head office in a unified manner. In the future, the Bank will further rationalize and improve organizational structure and responsibilities division of credit risk management, in order to control credit risk more effectively.
The Bank, in accordance with the requirements of the Guidelines on Loan Risk Classification, classifies credit assets both inside and outside the statement into five categories covering normal, concerned, substandard, doubtful and loss. The latter three types of loans are considered non-performing credit assets. Various types of credit assets are initially divided by front-desk risk control department, reviewed by credit management department, identified by the risk management department, and finally approved by risk management committee.
Risk limits management and release measures
In order to guard against credit portfolio concentrated risk, the Bank implements risks limit management strategy. Currently, risks limit management includes large credit risk, industry risk, single transaction counterparty risk of financial institutions, risk of related-party transactions and other indicators of concentrated limits.