CREDIT RISK MANAGEMENT

Credit risk represents one of the most significant exposures faced by banks, and the quality of its management directly affects financial stability, capital adequacy, and the sustainability of the business model.

Effective credit risk management goes far beyond assessing borrowers’ creditworthiness. It requires clearly defined policies and criteria, sound credit approval processes, continuous exposure monitoring, early identification of credit quality deterioration, and appropriate management actions.

Evolving regulatory requirements, the digitalization of lending processes, the integration of ESG factors, and increased economic uncertainty further emphasize the need for a proactive, integrated, and data-driven approach to credit risk management.

RISKA provides specialized advisory and training services to banks in developing, assessing, and enhancing credit risk management frameworks, with a focus on regulatory compliance, process efficiency, and the quality of credit decisions.

How Can We Support Your Bank?

Development and Enhancement of Credit Risk Management Frameworks

Assessment of existing credit risk management systems and support in their enhancement, including:

• Credit risk management strategies, policies, and procedures.

• Definition of credit risk acceptance criteria.

• Limit frameworks and concentration risk management.

• Roles, responsibilities, and internal control mechanisms.

• Alignment of credit risk frameworks with regulatory requirements and the bank’s business strategy.

Enhancement of Credit Analysis and Decision-Making Processes

Development and improvement of methodologies and processes for assessing borrowers’ creditworthiness, integrating quantitative and qualitative indicators.

Our support covers the analysis of borrowers’ financial positions, debt-servicing capacity, business models, cash flows, and relevant non-financial factors, including ESG risks.

Particular attention is given to the consistent application of lending criteria, the quality of credit decision documentation, and process efficiency.

Loan Classification and Expected Credit Losses – IFRS 9

Advisory support in assessing and enhancing approaches to financial asset classification and expected credit loss (ECL) measurement.

Services may include:

• Assessment of ECL methodologies and underlying assumptions.

• Evaluation of significant increases in credit risk (SICR) criteria.

• Enhancement of portfolio segmentation approaches.

• Analysis of the incorporation of relevant macroeconomic scenarios.

• Alignment of methodologies with IFRS 9 requirements and applicable regulatory rules.

Early Warning Systems and Credit Risk Monitoring

Development and enhancement of systems for the timely identification of deteriorating credit quality.

Our support includes defining key risk indicators (KRIs), warning thresholds, escalation procedures, and responsibilities for follow-up actions, as well as identifying opportunities to automate monitoring processes.

The objective is to enable banks to identify potential problems early enough to take appropriate action.

Credit Portfolio Quality Assessment

Comprehensive assessment of credit portfolio structure and quality, including:

• Analysis of concentrations by borrower, sector, and geographical area.

• Assessment of the structure and dynamics of credit exposures.

• Analysis of non-performing loans (NPLs).

• Identification of potential vulnerabilities and deteriorating credit quality trends.

• Recommendations for improving portfolio monitoring and management.

Credit Risk within the ICAAP Framework

Support in developing and enhancing credit risk assessment methodologies within the Internal Capital Adequacy Assessment Process (ICAAP).

Particular emphasis is placed on connecting the bank’s credit risk profile, concentration risks, stress scenarios, and internal capital adequacy assessments.

Training and Professional Competency Development

Development and delivery of professional training programs for credit analysts, risk managers, employees in lending and control functions, and other professionals involved in credit risk management.

Our programs focus on strengthening analytical skills, understanding regulatory requirements, interpreting financial and non-financial information, and improving the quality of credit decisions.

Why Does Effective Credit Risk Management Matter?

A well-developed and consistently implemented credit risk management framework contributes to:

• More reliable creditworthiness assessments and better lending decisions.

• Early identification and effective management of problematic exposures.

• Reduction of potential credit losses.

• More effective concentration risk and portfolio quality management.

• More reliable capital planning.

• Stronger regulatory compliance and internal controls.

• Sustainable loan portfolio growth and long-term profitability.

The quality of credit risk management is not measured solely by the number of loans approved or the level of credit losses, but also by a bank’s ability to identify, understand, and proactively manage risks throughout the entire credit lifecycle.

RISKA Professional Training: Credit Risk Management

Practical Knowledge for Better Credit Analysis, Monitoring, and Decision-Making

In addition to advisory services, RISKA develops and delivers specialized training programs in credit risk management.

Our training combines regulatory requirements, methodological approaches, and practical challenges encountered by banking professionals in their daily work.

Key Training Areas

• Regulatory frameworks and principles of credit risk management.

• Financial statement analysis and creditworthiness assessment.

• Qualitative assessment of borrowers’ business models and risks.

• Debt-servicing capacity assessment and cash flow analysis.

• Credit policies, lending criteria, and decision-making processes.

• Credit portfolio monitoring and early warning systems.

• Loan classification and expected credit losses under IFRS 9.

• Concentration risk and non-performing loan management.

• Credit risk within the ICAAP framework.

Online Program – Coming Soon

We are currently preparing an online edition of the program (avaliable on local language), offering interested professionals greater flexibility in acquiring knowledge and developing their professional competencies.

Information about the availability of the online program will be published on the RISKA website.

Who Are Our Services and Training Programs Designed For?

RISKA advisory and training services are designed for banks and financial institutions, particularly:

• Credit analysts and lending professionals.

• Credit risk management specialists and managers.

• Credit monitoring and portfolio management teams.

• IFRS 9 and expected credit loss specialists.

• Finance, controlling, and internal audit professionals.

• Managers responsible for credit strategy and risk oversight.

Advisory Solutions Tailored to Your Bank

Every bank has its own credit portfolio structure, business model, risk profile, and organizational capabilities.

That is why RISKA provides customized advisory solutions and practical training, tailored to each client’s specific needs and regulatory environment.

Our support may include:

• Assessment and enhancement of existing credit risk management frameworks.

• Development of policies, procedures, and methodologies.

• Improvement of credit analysis, monitoring, and reporting processes.

• Credit portfolio quality assessments.

• In-house training and practical workshops.

Strengthen Credit Decisions and Build a More Resilient Portfolio

Effective credit risk management is essential to financial stability, sound lending decisions, and sustainable banking growth.

RISKA helps banks develop and enhance processes that connect regulatory requirements, analytical expertise, and practical business needs.

Contact us to discuss advisory services or professional training tailored to your bank’s needs.

contact@riska.ba