The business center of Credit Agricole has enabled one to appreciate the concept of credit risk business, when the bank decided to support the company by funding needs for its operations, and on the other hand when, it decided to withdraw in order not to pursue a policy of support to ailing firms. Indeed, the risks of granting credit for the bank are: the risk of insolvency of the debtor, the risk capital funds advanced the risks specific to the management of the bank (interest rate, liquidity, etc.), credit risk, operational risk and the market risk. It is thus responsible for the business to properly assess the situation of the company, and take a commercial decision on the credit or not, minimizing the risk taken up by the bank.
Companies that make up the portfolios of charges d'affaires of the business center of Ile de France are SMEs. That's why the focus is only on this category of companies in opposition to "big business" that can result in the development of financial markets access to equities, or bonds to finance. One can indeed estimate that SMEs have difficulty in accessing additional funding, because they have no obligation to disclosure, and thus appear less transparent to investors than larger companies, which is an obstacle to finance capital markets and direct them to bank financing. The first solution that appears to face this obstacle is to develop a relationship of confidence between the Charge d'Affairs and the manager to collect useful information for better risk perception. This information is well beyond the data collection and financial accounting procedures.
After presenting the business center of the Ile de France Credit Agricole Nord, the focus will be on credit risk analysis at Credit Agricole, and the criteria on which the decision is based granting credit to a business. An interview with the director of the center of business will finally highlight the ambiguities of risk assessment model of Credit Agricole and appreciate the need to understand to make decisions related to credit.
The business center of Ile de France Credit Agricole Nord was established in 1981 as an organization dedicated to assisting the SMEs in the departments of 93, 95 and part of 92. Credit Agricole takes on many topics with companies including: the financing of working capital, equipment financing and investment; The refinancing of current accounts and credit and the treatment of domestic and international payments. The business center also works on complex arrangements and structured: business transfers, acquisitions, initial public offering etc.
The Business Centre Ile de France Nord releases a net banking income of 3-4 million euros, the business purpose of its senior business managers is to open 20 new accounts per year. The center now has about 700 client companies with a turnover of 10%.
The banking sector is a highly competitive sector where the actors are numerous and the offers are very similar from one bank to another. This requires banks to set up offensive strategies to always win new customers . In fact, this tough competition has reduced margins and forced the banks to offer products that are more competitive and innovative. The main competitors are the other banking groups such as BNP-Paribas, Societe Generale, HSBC, the Caisse d'Epargne, Banque Populaire etc
Tags: Diagnosis of credit management; business center of Credit Agricole; credit risk business;
[...] Division and sharing of risks Risk management within the Crédit Agricole also involves the establishment of credit limits granted to customers. Thus, the boundaries of outstanding loans to a counterparty or a group of a chain, relative to equity of the Regional Fund was established by the Board of Directors for all clients managed by Branch Companies on April These limits are subject to annual review. With respect to SMEs, it is ensured that in general activity and outside marked seasonality, Crédit Agricole's commitment to a single counterparty should not exceed the lower of the two following limits: - the amount of own funds - and one month's turnover. [...]
[...] " What do you consider the essential criterion of a credit report? "The evolution of cash is the first element that holds my attention in a credit report. If I had to"imagine" the role of cash for the company, I would say that it is a thermometer. A negative cash flow and loss of profitability undoubtedly leads to a dangerous situation! So I think that a true financial analysis should start with the "low" balance that is to say by the cash flow analysis, since it is the consequence of all that can degenerate. [...]
[...] After presenting an overview of Credit Agricole, we will now focus on the analysis of the credit risks within the Credit Agricole, and the criteria on which the decision is based. After an interview with the director of this group, we will finally highlight the ambiguities of the risk model assessment of Credit Agricole. I - Presentation of the Credit Agricole A History and business enterprise Credit Agricole, established in 1981, is an organization dedicated to the support of SMEs. [...]
[...] We can thus distinguish two kinds of flexibility: flexibility with respect to structural funds (can be committed at any time), significant capital (cash or transferable non-operating assets that could generate capital gains) and flexibility of management which is faculty of compressing the working capital without affecting the relations of the company (customers, suppliers, bankers). It is essential to add a "human" component to the financial analysis of a business and in its management and organization. One should be aware of the human resources policy. [...]
[...] Crédit Agricole notations As shown in the table in Annex this includes five grades which are representative of the following criteria: - Anadefi notation of the Group - Anadefi notation of the entity that sets the probability of failure (including the calculation explained above) - the evolution of the company - a way forward in the relationship - profitability generated by the relationship The credit risk policy of Crédit Agricole Upstream The credit risk policy of Credit Agricole is determined through two major principles in substance and form. [...]
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