FINANCIAL ANALYSIS AND CREDIT RISKMANAGEMENTS IN BANKS

Abstract

In order to avoid the risk in the operation of the banks, or at least to bring it within acceptable limits, it is necessary to effectively analyze and manage it.
Effective financial analysis of the operation of a company that appears as a borrower should indicate the key points and processes in which credit risk occurs. All parts of the companies’ operations may be at risk, from direct and indirect exposure, such as third party liability, market exposure and other exposure. Risk management is part of the bank’s employment policy, and accordingly can be defined as a certain function of insurance - risk insurance.
All the factors that affect the occurrence of risk are investigated in the process of financial analysis, ie the analysis of the creditworthiness of companies. The purpose of the analysis is to describe and measure the uncertainty of a particular credit activity. The financial analysis includes examining the company’s operations in the past and present, in order to get better predictions for future work activities.