Credit risk management of Southeast Bank

Abstract

Credit risk is one of the most vital risks for any commercial bank. Credit risk arises from nonperformance by a borrower. It may arise from either an inability or an unwillingness to perform in the pre-commitment contracted manner. The real risk from credit is the deviation of portfolio performance from its expected value. The credit risk of a bank is also effect the book value of a bank. The more credit of a particular is in risk, the more probability of a bank to be insolvent. Therefore, the status of depositor in the bank is at risk and probability of incurring loss from their deposited value. In other way the risk of a commercial bank is calculated through long term and short term rating by the credit rating agencies.