WHAT'S Nf.wS Issue 3 March 1996
working relations
9
Credit Secretariat
continues, 'that a
Ibranch in Asia has an
Application for a ten-
year bullet loan to
finance the production
of guns, which the
producer planned to
sell to Libya. Now,
this might raise a few
questions. For one
thing, financing deals
with dictators would
clearly violate our credit philosophy.
What's more, such military production is
not in line with our credit policy. On top
of that, we'd be reluctant to approve any
bullet loan extending more than five years.
That's against our credit risk policy. As a
result, we would probably suggest that the
branch to focus its efforts on other
priority sectors. This is a very exaggerated
^xample, but it is very instructive.'
NOVEL APPROACH
In addition to creating a common
framework of reference, the presentation
of credit applications is also being
standardized. 'Every application is a
narrative of preferably no more than eight
pages,' De Weerdt says. 'Each branch has
biases and inclinations of its own, and
tends to highlight them. This is
understandable. But
for the credit
committees, that
nightly pile of
applications starts to
look like an
impossibly long and
disjointed novel. We
want the branches to
write consistent and
interesting novels. If
they are original,
that's great. But they have to be concise
and highlight the most relevant aspects of
the story involved: they have to be a
smooth read.'
CREDIT INTERACTION
Standardization has to be balanced with
flexibility, needless to say. After all, every
branch faces its own local realities. A
dynamic enterprise that wants to leverage
its expertise on a global basis will depend
crucially on clear and open lines of
communication. Since the formation of
the Credit Secretariat, for example, there
has been a welcome tendency for the
branches to contact Utrecht before they
even start writing a credit application.
This interaction saves work on all sides:
the branches can make sure their
applications dovetail with existing policy,
and the Credit Secretariat saves the
committees from seeing all but what they
need to see.
KREDIETVERLENING
- HET PROBLEEM
VAN SUCCES
Als gevolg van de grote
groei van ons buitenlandse netwerk en
onze expertise in bepaalde sectoren, nam
ook het aantal kredietaanvragen fors toe.
Dit steeg de laatste vijfjaar van 1200 tot
2800 per jaar. Een hoeveelheid die door
onze kredietcommissies bijna niet meer te
behandelen is. Een bijkomend probleem is
om de juiste balans te vinden tussen de
kwaliteit van de verleende kredieten en de
groei van de portefeuille. Het
Kredietsecretariaat speelt een belangrijke
rol bij het stroomlijnen van alle aanvragen.
Het toetst elke aanvraag aan ons
kredietbeleid en de geformuleerde risico
profielen, zoals deze beschreven zijn in de
continu ge-update Credit Manual. Een
kredietaanvraag dient in principe volgens
vaste standaards te worden ingedeeld. Bij
twijfel over de haalbaarheid van een
aanvraag kan door deze van te voren af te
stemmen met het Kredietsecretariaat veel
werk bespaard worden.
clients and win market share. But
teamwork is essential: the overall goal is
to win the game. 'Think of it like
football,' he says. 'If you want to play in
the premier league, you need the best
team. But you also need the best coach,
the best support staff, the best stadium,
^nd the best training facilities. And they
KREDIETINSPECTIE -
SHERLOCK HOLMES
IN AKTIE
De kredietinspectie is
onmisbaar bij het in de gaten houden van
de kwaliteit van de totale kredietporte
feuille. Een groot verlies leidt immers tot het
stellen van hogere eisen aan en kortere
looptijden voor nieuwe kredieten. De
kredietinspectie-teams werken niet alleen
in heel Nederland, maar ook bij de
buitenlandse kantoren. Gedurende ca. 2
weken bezoeken zij een kantoor en
overtuigen zich van het feit dat de
verleende kredieten passen binnen het
geformuleerde beleid en dat alle
zekerheden aanwezig zijn. Ook checken zij
de interne organisatie op duidelijke
^rolverdeling tussen de account managers
en kredietanalisten. Daarnaast wordt het
krediet- en leningregistratiesysteem aan
een kritische blik onderworpen.
Dick Duit
all have to work
together.'
MONITORING
POLICY
Louwers' credit audit
teams work
throughout Holland
and around the globe,
fielding this
supporting role
wherever the banking
teams are in play. An audit team,
occasionally joined by colleagues from
other sections of the Internal Audit
department, will usually stay on location
for about two weeks. It will check to
make sure that lending policy is advancing
the strategies that have been developed
with head office. It will also focus on the
branch organization; for example, it will
make sure there are well-defined roles and
a clear separation between the managers
who sell loan products and the analysts
who assess the risks. Finally, the team will
study the lending and credit control
process. Is all the necessary information
available? Has it been correctly analyzed?
Does the collateral actually exist?
BEST PRACTICE
At the end of the day, Louwers' Credit
Audit department has
to satisfy three clients:
the board, the
International Division,
plus the branches in
their own attempts to
meet overall goals.
This is why he regards
the Inspectorate's role
as wider than mere
oversight. 'We are
advisers. We have the
overview. This means we can make
benchmarks and recommendations about
best practice. You have to recognize that
each market is different. The aim is to
help make this work to the advantage of
the organization to make it a tooi of
management.'
ART AND SCIENCE
An interesting picture starts to emerge. We
see that sound credit management lies at
the heart of any banking enterprise. It
involves coordinating the distribution of
one's resources, and it means knowing
exactly when to say 'yes' or 'no'. The
challenge is to strike a wise balance: this is
part art, and part science. At the end of
the day, that elusive element of
communication counts for a great deal.