银行管理(第六版)教师手册Chapter_15_IM_updates.pdf

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1、 208 CHAPTER 15 LENDING POLICIES AND PROCEDURES Goal of This Chapter:The purpose of this chapter is to learn why sound lending policies are important to banks and other lenders and the public they serve and how to spot and deal with problem loans when they appear in an institutions portfolio.Key Top

2、ics in This Chapter Types of Loans Banks Make Factors Affecting the Mix of Loans Made Regulation of Lending Creating a Written Loan Policy Steps in the Lending Process Loan Review and Loan Workouts Chapter Outline I.Introduction II.Types of Loans A.Real Estate Loans B.Financial Institutions Loans C.

3、Agricultural Loans D.Commercial and Industrial Loans E.Loans to Individuals F.Miscellaneous Loans G.Lease Finance Receivables Ill.Factors Determining the Growth and Mix of Loans A.Characteristics of the Market Area B.Loan Participations C.Lender Size D.Experience and Expertise of Management E.Instit

4、utions Loan Policy F.Expected Yield G.Functional Cost Analysis IV.Regulation of Lending A.The Lending Limit B.Limitation on Real Estate Lending C.The Community Reinvestment Act D.Equal Credit Opportunity Act E.Truth-in-Lending Act F.International Lending Rules G.Examiner Loan Ratings 209 H.CAMELS Ra

5、ting V.Establishing A Written Loan Policy VI.Steps in the Lending Process VII.Credit Analysis:What Makes a Good Loan?A.Is the Borrower Credit Worthy?1.Character 2.Capacity 3.Cash 4.Collateral 5.Conditions 6.Control B.Can the Loan Agreement Be Properly Structured and Documented?C.Can the Lender Perfe

6、ct Its Claim Against the Borrowers Earnings and Any Assets That May Be Pledged as Collateral?1.Reasons for Taking Collateral 2.Common Types of Loan Collateral a)Accounts Receivable b)Factoring c)Inventory d)Real Property e)Personal Property f)Personal Guarantees 3.Other Safety Devices to Protect a L

7、oan VIII.Sources of Information About Loan Customers A.Credit Bureaus B.Publications of Financial Information C.Information on Economic Conditions IX.Parts of A Typical Loan Agreement A.The Note B.Loan Commitment Agreement C.Collateral D.Covenants(Affirmative and Negative)E.Borrower Guaranties or Wa

8、rranties F.Events of Default X.Loan Review A.The Purpose of Loan Review B.Elements of a Good Loan Review XI.Handling Problem Loan Situations A.Signs of a Developing Problem Loan Situation B.Steps in Maximizing the Recovery of Funds from a Problem Loan(the Loan Workout Problem)XII.Summary of the Chap

9、ter Concept Checks 210 15-1.In what ways does a banks lending function affect the economy of its community or region?Bank credit is one of the most important sources of capital that fuels local economic growth and development.When banks make loans to support the development of new businesses and to

10、aid the growth of existing businesses,new jobs are created and there is a greater flow of income and spending throughout the local economy.15-2.What are the principal types of loans made by banks?Bank loans are usually classified by the purpose of the loans.The most common classifications are real e

11、state loans,commercial and industrial loans,loans to financial institutions,credit-card and other loans to individuals,and agricultural production loans Bank loans may also be classified by maturity-over one year and one year or less.15-3.What factors appear to influence the growth and mix of loans

12、held by a lending institution?The particular mix of any lending institutions loan portfolio is shaped by the characteristics of its market area,the expected yield and cost associated with each type of loan,bank size,the experience of management,the written loan policy and regulations.15-4 A banks co

13、st accounting system reveals that its losses on real estate loans average 0.45 percent of loan volume and its operating expenses from making these loans average 1.85 percent of loan volume.If the gross yield on real estate loans is currently 8.80 percent,what is the banks net yield on these loans?Th

14、e banks net yield on real estate loans must be:Net Yield on Real Estate Loans=8.80%-0.45%-1.85%=6.50%15-5.Why is lending so closely regulated by state and federal authorities?Lending is closely regulated because it is the center of risk for most lending institutions.Lending institutions in the U.S.a

15、re limited in the loans they can make to a single borrower by the size of their capital and surplus.They also must limit their real estate loans based on the size of their total time and savings deposits or capital.Discrimination against borrowers on the basis of their age,sex,religion,or national o

16、rigin is prohibited by U.S.law.They also cannot discriminate against borrowers from certain neighborhoods in their service areas.15-6.What is the CAMELS rating and how is it used?The CAMELS is a system used by federal bank examiners for evaluating the overall condition of a bank based upon the adequ

17、acy of its capital,the quality of its asset portfolio,its management quality,the adequacy of its earnings,its liquidity and its sensitivity to market risk.15-7.What should a good written loan policy contain?211 A good written bank loan policy should specify the goals of the loan portfolio and progra

18、m,describe an ideal loan portfolio for the institution and indicate the types of loans they normally will refuse to make,specify who has the authority to approve loans of varying type and size,the documentation requirements of different types of loans,and supply guidelines on loan pricing and collat

19、eralization for loan officers.15-8.What are the typical steps followed in receiving a loan request from a customer?A loan officer usually takes or receives such a request initially and passes it along to the credit analysis division for technical review.Usually the recommendations of both the credit

20、 analyst and the loan officer are directed to a loan supervisor or loan committee for approval.15-9.What three major questions or issues must a lender consider in evaluating nearly all loan requests?The three key issues with every loan:1.is the borrower credit worthy?2.can the loan agreement be prop

21、erly structured and documented?3.can the bank perfect its claim against the borrowers collateral?15-10.Explain the meaning of the following terms:character,capacity,cash,collateral,conditions,and control?a.Character-is the borrower serious about the purpose of a loan and intends to repay?b.Capacity-

22、does the borrower have the legal authority to sign and commit to a binding loan agreement?c.Capital-does the borrower generate sufficient income or cash flow to properly service a loan?d.Collateral-does the borrower possess assets of sufficient quality and value to backstop a loan?e.Conditions-does

23、the outlook for the economy and industry where a borrower is situated add strength to a loan?f.Control-does the proposed loan meet the banks own quality standards and the standards of bank examiners?15-11.Suppose a business borrower projects that it will experience net profits of$2.1 million compare

24、d to$2.7 million the preceding year and will record depreciation and other noncash expenses amounted of$0.7 million versus$0.6 million last year.The firm expects accounts payable to decrease from$24.2 million at the beginning of the year to$20.9 million at years end 212 while inventories and account

25、s receivable will rise from$7.8 million at the end of last year to$8.4 million and from$16.8 million last year to$20.1 million,respectively by the end of the current year.What is the firms projected cash flow for this year?Is the firms cash flow rising or falling?What are the implications for a lend

26、ing institution thinking of loaning money to this firm?The firms projected cash flow can be estimated by either of two methods discussed in the text:Cash Flow Estimate A=$2.1 million+$0.7 million+($20.9 million-$24.2 million)for the Current Year-($8.4 million-$7.8 million)($20.1 million$16.8 million

27、)=-$4.4 million.Cash Flow Estimate B =$2.1 million+$0.7 million=$2.8 million for the Current Year The previous year the cash flows amounted to:Cash Flow Estimate A=Not enough information to estimate this for the Previous Year Cash Flow Estimate B=$2.7 million+$0.6 million=$3.3 million For the Previo

28、us Year Clearly the firms cash flow is falling,which suggests that the lending institution needs to find out the reasons for this decline before committing any of funds.15-12.What sources of information are available today that loan officers and credit analysts can use in evaluating a customer loan

29、application?Among the most widely used sources of information used in evaluating loans are financial statements supplied by the borrower and industry-wide performance ratios for comparison purposes supplied by such organizations as Dun and Bradstreet and Risk Management Associates(RMA).15-13.What ar

30、e the principal parts of a loan agreement?What is each part designed to do?The most important parts of loan agreements include a signed note,a listing of covenants,documents specifying loan collateral,and a section describing what events or happenings will trigger default.15-14.What is loan review?H

31、ow should a loan review be conducted?Loan review is a process of periodic investigation of outstanding loans on an institutions books to make sure each loan is paying out as planned,all necessary documentation is present,and the banks loan officers are following the institutions loan policy.While le

32、nding institutions today use a variety of different loan review procedures,a few general procedures are followed by nearly all lending institutions.These include:213 1.Carrying out reviews of all types of loans on a periodic basis.2.Structuring the loan review process carefully to make sure the most

33、 important features of each loan are checked.3.Reviewing the largest loans most frequently.4.Conducting more frequent reviews of troubled loans.5.Accelerating the loan review schedule if the economy slows down or if industries in which the bank has made a substantial portion of its loans develop sig

34、nificant problems.Loan review is not a luxury but a necessity for a sound lending program.It not only helps management spot problem loans more quickly but also acts as a continuing check on whether loan officers are adhering to a banks loan policy.For this reason,as well as to promote objectivity in

35、 the loan review process,many of the largest institutions separate their loan review personnel from the loan department itself.Loan reviews also aid senior management and the banks board of directors in assessing the overall exposure to risk and its possible need for more capital in the future.15-15

36、.What are some warning signs to management that a problem loan may be developing?Problem loans are often characterized by reduced communication between borrower and lender,delays in receiving financial reports,evidence of reevaluations of assets(such as inventory or pension-plan assets),declining st

37、ock prices,changes in management,or the restructuring of other loans the borrower has taken out.15-16.What steps should a lender go through in trying to resolve a problem loan situation?The most important first step is to move quickly to contact the borrower,to ascertain if the borrower understands

38、the nature of the loan problem,to explore for creative solutions to the problem,and to get the borrower to reach a decision on the best solution possible.Problems 15-1.The lending function of depository institutions is highly regulated and this chapter gives some examples of the structure of these r

39、egulations for national banks.In this problem you are asked to apply those regulations to Green Tree National Bank(GTNB).GTNB has the following sources of funds:$100 million in capital and surplus,$100 million in demand deposits,$600 million in time and savings deposits,and$200 million in subordinat

40、ed debt.a.What is the maximum dollar amount of real estate loans that GTNB can grant?GTNB can grant$600*70%=$420 million in real estate loans b.What is the maximum dollar amount GTNB may lend to a single customer?GTNB may lend up to$100*15%=$15 million to a single customer.214 15-2.Karakee V.Corpora

41、tion,seeking renewal of its$12 million credit line,reports the data in the following table(in millions of dollar)to Whelington National Banks loan department.Please calculate the two measures of the firms cash flow as defined earlier in this chapter.What trends do you observe and what are their impl

42、ications for the decision to renew or not renew the firms credit line?Proj.for 20X1 20X2 20X3 20X4 Next Year Cash Flow Estimate 1(Net Profit+Noncash Expenses)$15.6$15.8$16.0$15.1$14.5 Cash Flow Estimate 2(Net Profits+Noncash Expenses+Added Accounts Payable Added Accounts Receivable and Added Invento

43、ries)-$15.7$16.1$15.2$14.2 Clearly,under both measures of cash flow Karakee is experiencing a significant decline in its actual and estimated cash flow,which suggests a careful look at the firms financial statements and operations before renewing its credit line for the full amount requested.Of spec

44、ial concern is the steady buildup in accounts receivable and inventory as well as the firms growing reliance on its suppliers for credit(accounts payable).15-3.Silsbee Manufacturing and Service Company hold a sizeable inventory of dishwashers and dryers which it hopes to sell retail dealers over the

45、 next six months.These appliances have a total estimated market value currently of$16,357,422.The firm also reports accounts receivable currently amounting to$8,452,867.Under the guidelines for taking collateral discussed in this chapter,what is the minimum size loan or credit line Silsbee is likely

46、 to receive from its principal lender?These figures suggest that the minimum size credit line available would be:Minimum-Size Loan/Credit Line Available=0.30 x$16,357,422+0.40 x$8,452,876=$4,907,226.6+$3,381,146.8=$8,288,373.4 15-4.The particular C of credit represented by each piece of information

47、presented in this problem was as follows:a.Collateral b.Control c.Character d.Cash e.Capacity f.Conditions g.Character h.Cash i.Conditions j.Control k.Capacity l.Collateral 215 15-5.ButelI Manufacturing has an outstanding$11 million loan with Citicenter Bank for the current year.As required in the l

48、oan agreement,Butell reports selected data items to the bank each month.Based on the following information,is there any indication of a developing problem loan?About what dimensions of the firms performance should C iticenter Bank be concerned?Selected items reported to the bank by the company do in

49、dicate the possible development of a problem loan situation.For one thing,Butells cash account has fallen sharply in the latest month after several months of a substantial uptrend and the firms liquidity ratio of current assets to current liabilities has declined significantly in the last 3 months.D

50、ecreases in the firms liquidity position may be signaling declining sales and/or difficulty in maintaining enough cash to meet near-term liabilities.Another possible cause for concern centers around Butells capital structure as its ratio of equity capital relative to debt financing is falling,indica