The Real Price of Risk: How to use risk ratings to increase the profitability of your loans
Risk ratings are the basis for understanding credit risk in the portfolio, yet many institutions struggle to maintain and apply an objective risk rating system. Accurate risk ratings allow institutions to better price loans and account for risk in the overall portfolio. This webinar will cover the basics of identifying risk, pricing it appropriately and reflecting it in the reserve.
Why the risk rating process deserves attention:
Risk ratings often influence the credit approval process and the price of the loan, therefore, incorrect ratings could lead to undue risk in the portfolio. Once determined, they allow lenders to determine how and how often to review and analyze the relationship. Risk ratings form the basis for broader risk management including setting the reserve, stress testing, capital and strategic planning. Finally, they give the management team, board, auditors a more accurate measure of portfolio risk and trends in risk levels
Other topics to be covered in the webinar:
– The benefits of a standardized risk rating system
– How to improve profitability of loan pricing models
– Examples and best practices for ROE and ROA thresholds
About the presenter Robert Ashbaugh:
Robert Ashbaugh is a senior risk management consultant at Sageworks and is responsible for assisting financial institutions with their risk management needs. Rob has more than twenty years of capital markets and commercial banking experience as both a portfolio manager and risk manager, with a primary focus on mortgage-backed securities, whole loan portfolios and commercial lending.
Download the free eBook Commercial Risk Ratings Considerations to learn best practices for building your risk rating system.