Credit risk management of The City Bank Limited

Abstract

City Bank Limited (CBL) is one of the oldest reputed financial institutions in Bangladesh established in the year 1983. Since the very inception of the commercial banking industry in Bangladesh, it has been dominating and contributing to the country’s economy. The topic of my internship report is “Credit Risk Management of The City Bank Limited”, which has attained the latest highlighted feature in the banking industry in Bangladesh. Due to the increased competition among both the commercial and the Gov. Banks in Bangladesh, this Credit management issues has gained extensive attention. The main objective of my report is to have a complete knowledge of the activities performed in Credit Risk Management of City Bank Limited. This report initially depicts the overall financial indicators of The City Bank Limited, and how they are doing in this competitive commercial banking industry in Bangladesh. Their financial strength, management, credit and collection policies and their crisis management stands are described in this report. I have described what measures City Bank Ltd. takes to this on-going issue of credit risk. This report comprises with the Credit facilities that CBL offers to its customers. In this report, I have tried to discuss CBL’s credit facilities under retail, corporate and SME units. I have mainly focused on the retail loan of CBL due to limitation of the study. I discussed credit facilities that retail department provide like Home Loan, Auto Loan, Personal Loan, and Secured Loan. Here I showed the retail loan performance, total outstanding loan amount, total Nonperforming Loan (NPL) amount and segment-wise loan performance of CBL retail department. Then, as generally most customers contain a minimum amount of credit risk, I have tried to cover how CBL manages this credit risk issue of the customers. After discussing all the components, I have established some findings and challenges they face while managing the credit risk of their customers. In findings I found out problems like rigid credit assessment & risk grading process, Inefficient Third Party agent (CPV agents), Inefficient data management and many others that affect the bank's credit risk management. Finally, I have made some recommendations based on the findings and challenges of the report. If The City Bank Limited can convert its challenges into opportunity then they can easily and efficiently manage their credit risk.