Overview of Credit Risk

Management practices
IN HBL

PRESENTED BY
MARVI
ISMAT
Managing credit Risk:
A major part of the business of financial
institutions is making loans, and the major
risk with loans is that the borrow will
not repay.
Credit risk is the risk that a borrower
will not repay a loan according to the
terms of the loan, either defaulting
entirely or making late payments of
interest or principal.
 HBL INTRODUCTION.
HBL might have been the main
business bank to be distinguished
Pakistan done 1947. Through those
years, HBL need grown-up its range
office course of action and uphold its
area Likewise the biggest private
division bank for In 1,600 limbs and
1,700 ATMs Comprehensively
Furthermore a client base surpassing
eight million connections.
 Risk Management Practices in
HBL.
Screening and monitoring.
collecting reliable information about
prospective borrowers. This has also
lead some institutions to specialize in
regions or industries, gaining expertise
in evaluating particular firms
also involves requiring certain actions,
or prohibiting others, and then
periodically verifying that the borrower
is complying with the terms of the loan
contract.
 Long term customer
relationship
past information contained in
checking accounts, savings
accounts, and previous loans
provides valuable information to
more easily determine credit
worthiness.
 Loan Commitments:
arrangements where the bank
agrees to provide a loan up to a
fixed amount, whenever the firm
requests the loan.
Collateral: a pledge of property
or other assets that must be
surrendered if the terms of the
loan are not met ( the loans are
called secured loans).
COMPARISON:
 Conclusion
Finally we have concluded that through this project we
actually get the practical knowledge that a lot of risk is
involved at the time of lending but bank have to secure
itself through taking proper security and using above
mentioned techniques instead of facing this risk. For the
purpose of declining the risk factor bank uses these
techniques. Habib bank limited is using the best techniques
in which it make itself secure so that its business operation
cannot be stopped. But the policies which it adopts it must
keep relax for loyal customers. It will be very helpful for
banks if all the information relating an individual exists in a
single smart card then just by entering the CNIC number
banker will able to get all information as well.