Credit risk arises from a host of sources including the loan book, bonds, financial derivatives including swaps and options, interbank transactions, extension of commitments and guarantees, and settlement of transactions etc.

Credit Risk Department

Credit risk arises from a host of sources including the loan book, bonds, financial derivatives including swaps and options, interbank transactions, extension of commitments and guarantees, and settlement of transactions etc.

The goal of credit risk management at Pak Brunei Investment Company is to maximize the company’s risk-adjusted rate of return by maintaining credit risk exposure within acceptable parameters. Credit Risk Management Department (CRMD) at Pak Brunei Investment Company assesses the financial health of its customers, and recommends to extend credit (or not) accordingly. It provides an independent risk assessment of the credit portfolio of the company. It also ensures through independent oversight that credit risks are identified, evaluated, monitored, and reported within the established credit risk management framework. The scope of work and functions of CRMD fall into following three broad areas as follows:

  • Advise/ Decide
  • Risk Control and Monitoring
  • Financial Restructuringe

Advise/ Decide

CRMD provides risk input for policies originated from different departments. In line with best practices, the primary risk assessment responsibility lies with the recommending department which provides both qualitative and quantitative input on the exposure. However, CRMD independently assesses the risk profile (including business risk, financial risk, industry risk, structural risk etc.) of a transaction.

Advise

Risk Control and Monitoring

This function identifies deteriorating risk profiles (industries / sectors, credits and products) and proactively recommends to reduce, or mitigate, exposures where appropriate. Moreover, it also involves ensuring compliance with external (regulatory) and internal audit requirements. Preparation of risk reporting for external parties is also under the purview of CRMD.

Financial Restructuring

The management of problem accounts (including classified accounts and restructured/ rescheduled accounts) and monitoring and recommendation of appropriate corrective actions on the workout of these problem accounts comes under this area. CRMD formulates and proposes strategies in conjunction with Credit Committee for repayment and keeps a frequent check on the collection process, ensures that a remedial action plan is in place, which is clear, specific, result-oriented and time-bound on a need basis.