Categories of loan quality (table). Definition of a loan quality category. 5 categories of loan quality. Change in loan quality category after refinancing

Banks are required to classify each loan and calculate on it a reserve of possible losses (RVPS). The larger it is, the slower the pace of development of the institution. In order not to expose the bank to such risk, categories of loan quality were developed. They calculate the risk of a decrease in solvency and a reserve for possible losses in accordance with the requirements of the Central Bank of the Russian Federation No. 254-P.

Essence

Due to the mismatch between the accounting and management reporting and the availability of investment activity, the bank may have problems with the formation of reserves. The first factor is explained simply. Large companies have two accounting systems. Internal reporting provides more complete and detailed information about the state of the company. It is very different from accounting. But the bank first of all analyzes the balance sheet and the report on financial results. Most often, management reporting is not even submitted for consideration.

Not all banks are involved in investing in their own businesses (startups). And even in this case, they are faced with the restrictions of the Central Bank of the Russian Federation. Such projects have to be financed by loans issued to own companies. The maximum risk per customer is limited. Therefore, not one but several companies are created, and each of them is given a loan. And those, in turn, transfer funds to the right company. For such technical intermediaries, it is difficult to justify low RVPS values.

Example

The bank and the company are part of an unofficial holding. Both institutions have one owner. The company needs a loan for business development. The restriction of the Central Bank of the Russian Federation allows the bank to finance the company only 1/5 of the required amount. In this situation, several companies are created to which the bank issues the remaining 4/5. In all of these organizations, one employee "works", no security is provided. This situation looks extremely suspicious from the outside, especially if the bank makes small reserves for such loans. At the request of the Central Bank, a credit institution has to formally increase the RVPS. Further, restrictions arise in the form of a decrease in the loan portfolio and shortfall in profit. The growth rate of a financial institution will slow significantly. This problem is solved by the formation of 5 categories of loan quality. This is not about creating a new scoring system, but about forming stocks using the new methodology.

Definition of a loan quality category

To begin with, it should be noted that this technique is designed only for corporate borrowers. This group of customers provides a large field for maneuvers. The logic of applying the circuit is simple. Before issuing a loan, the Bank carries out a detailed risk analysis for itself and for the Central Bank of the Russian Federation. If the results of the scoring system are positive, then he is ready to issue a loan. But if the real risks of the transaction are greater than those that he can justify before the Central Bank, then he will additionally have to form a RVPS. Significant reserves may limit the bank’s operations. To eliminate such problems, a credit institution develops a separate client dossier and, on its basis, makes a decision on granting a loan.

General concept

The quality category of a loan is determined by:

• financial condition of the borrower;
• quality of credit service;
• loan classification;
• calculated reserve;
• formed reserve taking into account collateral.

Let's consider each of these elements separately.

Factor analysis

The solvency of the borrower is evaluated in points. This takes into account:

• Actual financial statements
• credit history;
• availability of a business plan;
• other factors.

The first three indicators give 80% of the result, and the rest - 20%.

Rating

Each factor is scored. Then they are all multiplied by the corresponding weights and summed. This defines the quality categories of loans. The limit values ​​of each of the indicators are presented in the table below.

Decryption

The first category includes borrowers with good credit history, who can provide financial reports for at least one quarter and a sound business plan. The lack of a history of cooperation in the past classifies the borrower in the second category. Startups, subject to all other conditions, automatically fall into the third group. The absence of a business plan or financial statements further reduces the solvency of the client.

Financial condition

The financial statements use the balance sheet and data on the results of the company. Additionally analyze also management reporting not always helpful. At many firms, the accounting and management reporting data are very different. If such a situation is detected, the bank, in accordance with clause 3.12 in 254-P, will have to qualify the loan for a maximum of the third category. Having a well-designed business plan, on the contrary, will be a great advantage for the borrower.

The borrower's financial position is analyzed using the bank’s internal methodology. It can be good, average and bad. The production and financial and economic activities, information on external conditions are examined in detail.

Signs of a good financial position include: stable production, a large amount of net assets, a high level of profitability and solvency. Negative trends include factors that are not related to seasonal ones: a significant decrease in production growth rates, profitability, growth in payables (receivables), etc.

Signs of a satisfactory financial situation are: the absence of threats to reduce solvency in the presence of negative trends that can lead to a recognition of the borrower insolvent, loss-making activities, a decrease in net assets, a decrease in production volumes, and an increase in payables (receivables).

Other factors

In order to determine the quality category of loans, a comprehensive analysis of the main business processes is carried out. Directions and parameters of the assessment are also presented in the relevant paragraphs of methodology 254-P. It is worth noting that the fact of conducting this analysis indicates a very responsible approach to risk assessment.

The indicators from the financial statements are conditionally divided into two groups: interval and instant. Mixed coefficients are their derivative. The first group includes all lines from the income statement, information about the receipt of funds and financial flows. All balance lines and data on the balance of funds in the accounts at the beginning and end of the period belong to the third group.

Instant ratios can vary greatly from period to period. Therefore, in their pure form they are not analyzed. But this exception does not apply to all indicators. Autonomy ratio (K1), own funds (K2), current liquidity (K3) are evaluated separately.

K1 = equity (SS) / current (OA) + non-current assets (VNA) = code 490 / code 300.

K2 = Own working capital (SOS) / OA = (code 490 - code 190) / code 290).

K3 = (OA - Overdue debt - Short-term investments) / Current liabilities = (code 290 - code 230 - delinquent DZ) / (code 690 - code 640)).

All these indicators are for reference only. They cannot be classified as "good" or "bad." Moreover, one cannot evaluate their dynamics. For example, a small share of equity in capital, on the one hand, indicates a great dependence on external sources of financing, and on the other hand, it can indicate that the enterprise is able to use borrowed funds correctly.

Debt Service Quality Concept (CODE)

First, it turns out whether the conditions for classifying the CODE as “good” are fulfilled (Section 3.7.1). Next, the reverse side is checked. The conditions are reversed and the “bad” value of the CODE is checked (Section 3.7.2). Both tests should give a positive value. If clause 3.7.1 is not fulfilled, then an average rating is assigned. If clause 3.7.2 is not fulfilled, unsatisfactory.

CODE is considered good if:

• payments on debt and interest payments are transferred on time, in full;
• there is a single case of delay in payment for the last 180 cd, including:

- on loans for legal entities persons - up to 5 days inclusive;

- on loans for physical. persons - up to 30 days inclusive.

CODE is considered average if:

• payments are made through collateral or property;
• the loan is restructured (the terms of the original contract are changed);
• there are delays for the last 180 days lasting up to 30 cd (legal entities) and 60 cd (physical persons) inclusive.
• a loan is provided to a borrower to repay a debt on a previously received loan or the organization has accepted the risks of cash loss.

A CODE is considered bad if:

• there are delays in payments for six months more than 30 (legal entities) and 60 (individuals) days inclusive;
• after the restructuring of the loan, the financial position of the borrower has not changed;
• A loan is provided to repay a previously received loan.

RVPS

The reserve is formed in order to minimize loan impairment losses. If the payer fails to fulfill obligations, the resulting debt should not become critical for the bank. When issuing a loan, there is always a chance of default. The Bank is not able at the time of signing the contract to determine the day of repayment of the debt in full. Formed reserves partially compensate for this credit risk, create stable conditions for the bank to carry out activities. The source of their education are deductions for expenses. In the BU, the creation of a RVPS is recorded as an expense, and its recovery as a result of loan repayments or a reduction in the reserve rate as an income.

Calculations

At the first stage, points for each factor are determined. Next, they make an assessment of the financial situation. In the presence of additional conditions, it is adjusted. In parallel, an analysis of the CODE is carried out. Based on these two indicators, the primary classification of the loan is assigned. If there are conditions that are not included in the methodology, the category increases or decreases. Next, the reserve is calculated. If the borrower has collateral, then the RVPS is adjusted downward. This defines the quality categories of loans. The table below will help to better understand the issue.

Of the existing 5 categories of loan quality, the latter two are classified as impaired loans. The table below presents the ratio of groups and CODE.

All information about the client and his risks is recorded in a special dossier. If there is a change in the quality category of the loan after refinancing, then the restructuring of reserves is carried out.

Conclusion

The Central Bank is constantly tightening control over banks. Credit institutions risk someone else's money. If, in the opinion of the Central Bank of the Russian Federation, the financial institution has many “bad” loans, then it cannot increase its loan portfolio and earn more profit. Accordingly, doubts arise in the further work of the bank.

The lending institution independently develops a methodology for determining the category of quality of loans and the formation of the RVPS. It must comply with the requirements of 254-P and be displayed in the file of the borrower. According to it, at any time, the Central Bank can check information on the movement of funds. With "white and fluffy" borrowers there are no problems. And in all other situations, it is necessary to increase the reserves for loans issued.