Eensight

Risks and supervisory expectations listed out by The Comptroller of the Currency:

The Comptroller of the Currency notes that examiners are assessing banks’ capabilities to recover from destructive malware attacks. Examinations should emphasize threat vulnerability and detection, authentication and access controls, network management, data management, and managing third-party access.

Examiners should perform assessments of internal controls and operational processes that changed during the pandemic.

OCC: Semi-Annual Risk Perspective for Fall 2021

The Office of the Comptroller of the Currency pointed out in its most recent Semi-Annual Risk Perspective that - credit risk remains heightened due largely to the effects of the pandemic.

The OCC had issued its instructive Fiscal Year 2022 Bank Supervision Operating Plan. The document instructs examiners to watch for complacency, and to “evaluate banks’ actions to manage credit risk given changes in market condition, termination of pandemic related forbearance, uncertainties in the economy, and the lasting impacts of the COVID-19 pandemic.

Banks remain very easy on credit terms as delinquency rates on consumer loans are below 2% and are lower than anytime since 2012. In a second area of household credit, the net percentage of banks reporting increased demand for credit cards is at 32%—the highest percentage over the entire period since 2012 of historical data.

Commercial Lending Market Outlook – 2030

A commercial loan is a type of debt-based financing that is used for maintaining working capital, acquiring new equipment, or capital expenditure. Flexible long-term lending and capital expenditure for adapting new technology are the top impacting factors that are driving the growth of the global market. Learn about Commercial Lending Market by type (Term Loan, SME Credit Card, Lease Finance, Bank Guarantee, and Others) and Enterprise Size (Large Enterprises and Small & Medium Enterprises)in the latest Global Opportunity Analysis and Industry Forecast, 2021–2030

Commercial Lending Market Size, Share & Growth | Analysis - 2030 The global commercial lending market is segmented on the basis of type, enterprise size, and region. Based on type, the commercial lending market is divided into term loan, SME credit card, lease finance, bank guarantee, and others.

That's the good news!

But the bad news is that the increase in the number of cases can lead to other restrictions on meals indoors, including requirements for proof of vaccination by users. Other negative factors include how the end of forbearance could impact restaurant owners.

The Federal Reserve has examined the risk of concentration of the CRE, especially with regard to community banks, in a recent document called “The Pandemic's Impact on Credit Risk: Averted or Delayed?” “The results of the model show that bank concentrations of CREs are positively associated with changes in lending," it said. “Furthermore, we find high levels of commercial mortgage-backed security (CMBS) delinquencies and rising allowance levels for CRE as the U.S. economy exits the COVID-19 recession. These risk factors could be early indicators of future increased credit losses and possible bank stress.”

There is increasing concern over CRE concentrations, which have played such an important role in the S&L crisis and the global financial crisis and that have increased in the last six years, according to the Fed document could again pose problems.

Business bankers make some critical mistakes over and over and over again that prevent them from getting the results. Don’t make the mistakes below while closing any loan deals:

>Not leveraging enough social and business networks to get quality leads and appointments with prospects and customers.

>Not having meaningful conversations with clients and prospects about their business, main challenges, pain points and priorities.

>Not engaging in deeper conversations with customers and prospects regarding their financial position and cash flows.

>Thinking that clients are only looking for the lowest rates to close a loan deal.

Credit risk is the potential to lose a lender due to the possibility of a borrower not repaying a loan. Consumer credit risk can be measured by the five Cs: credit history, capacity to repay, capital, the loan's conditions, and associated collateral.

The concept of risk management is applicable to both a single loan (micro) or to entire portfolio of loans (macro). Read more here:

Credit risk management principles, tools and techniques - The Global Treasurer Effective credit risk management is not only necessary to remain compliant but it can also offer a significant business advantage if done correctly

Businesses continued to borrow in 2020, although much of last year's lending activity has more to do with keeping Pay Cheque Protection (PPP) loans afloat than with the expansion of operations.

Today, with an economy that is more stable, if not more robust, many companies are looking to invest and grow(that is, if they can get enough people to come to work), at a time when banks are sitting on more cash than normal and are willing to lend. Read here:

https://businesswest.com/blog/banks-see-healthy-surge-of-commercial-lending/

Banks See Healthy Surge of Commercial Lending - BusinessWest Open for Business Businesses didn’t stop borrowing in 2020, although much of last year’s lending activity had more to do with staying afloat with Paycheck Protection Program (PPP) loans than expanding operations. These days, with the economy in a more stable — if not exactly robust — place, ...

There are several agencies in the US to regulate and oversee financial institutions and financial markets. Every regulatory authority was formed to help achieve the overall goal of providing sensible regulation of markets and protection for investors and consumers. Here are the major ones you should know about:👇

• The Federal Reserve Board (FRB)
• The Federal Deposit Insurance Corporation (FDIC)
• The Securities and Exchange Commission (SEC)
• The Commodity Futures Trading Commission
• The Office of the Comptroller of the Currency
• The Consumer Financial Protection Bureau

A great loan officer always starts by working their sphere of influence. Here are the seven outstanding traits, characteristics and habits of high-performing loan officers:

• Begin by working their Statement of Identity (SOI)
• Add more value than they take
• Don’t hide when things go wrong
• Maintain their mortgage database and CRM
• Think ahead
• Learns constantly
• Prioritize relationships over money

To succeed now and to flourish in the future, banks and credit unions must distinguish themselves on customer service. But focusing only on the end consumer can be a mistake. For the real transform to happen, financial institutions must work from within and consider the following three things:

✅Boosting connectivity
✅Optimizing efficiency while unlocking value
✅Improving flexibility and agility