Industry-benchmarked credit rating framework: strengthening lending decisions

Abstract

The purpose of the report is to integrate and analyze all three chapters including, own perspective from personal exposure during internship tenor, background and overview of the company from experience, interviews and online source and lastly design and develop a project to solve or improve an existing problem at UCB. Chapter 1 aims to provide a perspective from the view point of an intern. It mainly covers some personal details along with some in-depth reflective description including, the responsibilities, challenges, key learnings and recommendations. This chapter also talks about the first real-world experience that can help both the host organization and future interns by providing a complete view from a different angle. The goal of chapter 2 is to provide a complete overview and critical analysis of the background of the host organization including, its functional areas, competitive position and current situation. Later identify the challenges in different functional areas and recommend ways to solve or improve those areas. This chapter combines both real experiences gained during internship tenure and information from online sources in order to provide a more in depth and practical description. The information is both qualitative and quantitative and critically analyzed to get a better picture and visualize it. The aim of chapter 3 is to design and develop a sector-based framework with ratios and trends derived from the audited financials of clients of UCB’s RMG portfolio with a view to create a supporting tool to make better lending decision. The chapter start with thoroughly explaining about the existing ICRR process then slowing moving to its inevitable imitations and lastly providing with the developed framework as a supporting tool for the existing assessment process. It does not aim to fully replicate or replace it. Additionally, the finding shows that the framework is able to visualize the financial condition of a company and compare it, which existing tool lacks. The developed framework aims to solve the biggest challenge every bank face, which is managing loan portfolio and make better credit decisions. Although this internship was a mandatory requirement for my degree but the benefits of it lays way beyond. This internship was my first exposure to real-life work and it created a connection between the theories we learn in class with its application. This opportunity surely prepared me for my career and future better than I could imagine.