Credit policy
The credit policy was updated as a result of regular reviews of the loan process, to include compliance with internal regulations, the necessity to update the credit risk parameters arising from the PFSA recommendations and the amended Risk Strategy for 2016.
Consumers
The key changes introduced in 2016 with regard to the consumer loan portfolio include:
- amended assumptions regarding low-value loans granted upon completion of a statement of means;
- building new scoring models;
- amended risk class definition to improve client assessment diversification;
- classifying minimum household expenses and interest rate risk buffer in accordance to loan periods;
- rebuilding the consumer loan sales structure to diversify the portfolio;
- developing new cash loan collateralizing rules to better adjust to customer’s risk profile;
- developing detailed principles and procedures regarding the monitoring of the value of real property used as collateral when granting consumer loans;
- amending “Principles of limiting credit activities with regard to exposure concentration” - amended internal limits for consumers following a periodic review of limits and adjustments regarding implementation of Recommendation C.
At the same time, the Bank is working on implementation of changes to the cash loan process in 2017, involving among others introduction of a new scoring model and amendments to loan policy, comprising linking the maximum exposure to customer’s income and risk profile and changing the sales model intended for Bank’s customers.
Institutional clients
Key changes regarding the institutional clients portfolio include:
- verifying assumptions that underlie the scenario analysis applied to evaluate individually material exposures;
- unifying the loan policy with regard to classification of exposures as individually material;
- developing detailed principles and procedures regarding the monitoring of the value of commercial property;
- amending “Principles of limiting credit activities with regard to exposure concentration” - amended internal limits for institutional clients following a periodic review of limits and adjustments regarding implementation of Recommendation C.