What Does A Credit Risk Analyst Do?

WHAT DOES A CREDIT RISK ANALYST DO?

Published: September 11, 2024 - The Credit Risk Analyst conducts data mining and analytics to deliver strategic business recommendations. Utilizes statistical techniques to analyze trends, identify risks, and develop actionable solutions for portfolio management and operational efficiency. Collaborates with stakeholders to enhance risk management processes, supporting business growth and innovation.

A Review of Professional Skills and Functions for Credit Risk Analyst

1. Associate Credit Analyst Duties

Credit Analysis: Perform intensive fundamental credit analysis
Investment Recommendations: Formulate and effectively communicate investment recommendations that add value to the portfolios
Quantitative Support: Provide quantitative, analytical, and qualitative support for investment-grade corporate bonds
Credit Presentation: Present credit ideas to the PM/fixed income team supported by a well-developed investment thesis
Company Research: Analyze and research companies and industries, perform financial modeling, comparable company analysis, and relative value analysis
Memo Preparation: Prepare investment memorandums
Database Management: Maintain various databases and portfolio monitoring
Team Collaboration: Work with Portfolio Managers, traders, sell-side analysts, and other analysts within the Corporate Credit team
Department Interaction: Interact regularly with other members of the Symetra Investment department

2. Corporate Credit Analyst Details

Credit Analysis: Observing the guidelines of Corporate Credit business and NPL company strategy
Loan Review: Analyze and review intensified and problem loan proposals related to handled portfolio
Document Compliance: Ensure complete set of documents required for analyzing the credit application are submitted by the business teams
Financial Analysis: Analyze companies and group's financial statement
Ratio Assessment: Perform ratio analysis and comparative corporate assessment
Cash Flow Analysis: Prepare accurate cash flow analysis to evaluate debt service ability of the borrower
Limit Utilization: Analyze limit utilization performance of existing customers and the adherence to single and group borrower limits as per local regulatory requirements
Loan Submission: Prepare loan application and submit to Local Branch Manager and/or Central Credit Assessment (HQ) for approval
Credit Bureau Review: Assess and evaluate Credit Bureau, particularly Centrale Rischi Interbancaria
Collateral Analysis: Analyze collateral/guarantor to determine the required % of unsecured for the lender
Risk Indicators: Identify early warning signs in financial statements
Credit Recommendations: Recommend approval for new credit extensions, amendments, renewals, and/or re-financings
Long-term Funding: For long-term funding requests, assess key drivers of business planning and borrower restructuring sustainability
Credit Monitoring: Monitor credit approval documentation, reports, and financial performance

3. Credit Risk Analyst Responsibilities

Credit Portfolio Management: Manage company credit risk portfolio
Credit and Risk Analysis: Analyze and assess customers' credit and financial risk by evaluating financial statements and reports (credit reports, tax returns, etc.)
Credit Limits: Define and maintain customers' credit limits
Credit Policy Review: Review and maintain company credit risk policy
Credit Limit Updates: Review and update current customer credit limits based on the company credit policy
Risk Identification: Identify credit risks and share them with management
Process Improvement: Drive process and systems improvements related to the credit analysis function
UCC Documentation: Complete and file all UCC1 and UCC3 documents
Special Credit Terms: Manage all special credit term requests
Sales Support: Assist sales team with credit analysis based on monthly sales forecasts
Customer Master Maintenance: Maintain customer master (address updates, company name changes)
Bankruptcy Management: Manage and document all bankruptcy filings
New Account Setup: Complete all new account setups (prevent duplicate account setups)
Order Monitoring: Monitor held orders list to ensure that all new accounts have been properly set up in SAP's customer base
Large Deal Engagement: Work with management and stay engaged with large deal orders

4. Credit Risk Analyst Accountabilities

Credit Reviews: Complete independent and objective reviews of any credit transactions
Policy Updates: Update credit risk policies, procedures, and regulatory guidelines
Statistical Analysis: Use statistical methods to analyze and predict credit risk
Risk Model Development: Develop and maintain pricing risk models and portfolio projection models
Data Source Implementation: Identify and help implement new alternative data sources
Collections Best Practices: Establish and maintain best practice collections processes and techniques that support the stated product and customer strategy
Portfolio Reporting: Produce superior reporting and analysis of portfolio trends that help drive change to improve portfolio profitability and customer experience
Profitability Strategies: Develop and monitor profitability-based strategies for account management, and collaborate with appropriate stakeholders
Collections Strategy Optimization: Work closely with the Head of Collections Strategy to find opportunities to optimize the overall collections strategy
Portfolio Performance Analysis: Undertake analytical deep dives on current portfolio performance, generating insights and identifying opportunities to improve collections strategies
Strategy Development: Enable strategy development, monitoring, and reporting, and provide expert risk advice to internal stakeholders
Risk Strategy Improvement: Understand and assess risk strategy performance, identify opportunities to improve collection and customer contact strategies, and formulate enhancement initiatives

5. Credit Risk Analyst Functions

Credit Risk Analysis: Focus on quantitative credit risk analysis, where are constantly looking for ways to improve underwriting and risk-adjusted return.
Portfolio Review: Lead the continuous review of the portfolio from a credit risk perspective and present findings in key stakeholder forums.
Metric Monitoring: Monitor relevant key metrics within credit risk, such as approval rate, default rates, recoveries, profitability.
Data Analysis: Compile and analyze data and propose proactive changes in credit regulations, credit process and pricing.
Trend Identification: Monitor customer profiles and behaviors and identify trend shifts.
Collections Maintenance: Establish and maintain collections processes and techniques that support the stated product and customer strategy.
Strategy Optimization: Work closely with the Head of Collections on finding opportunities to optimize the overall collections strategy.
Analytical Review: Undertake analytical deep dives on current portfolio results, generating insights and identifying opportunities to improve collections strategies.
Risk Evaluation: Conduct financial analysis/review of existing and new customers to evaluate the risk level and establish or change the credit lines.
Credit Reporting: Provide credit reports as requested by internal partners.
Risk Reporting: Provide regional consolidated risk reports supporting managerial decision-making.
Proactive Monitoring: Apply a proactive method of monitoring customer and market risk to identify potential customer defaults and minimize surprises.
Internal Collaboration: Communicate and collaborate with Collection, Customer Service Back and Front Office, Sales, Finance, and other Internal Customers to mitigate risk and maximize profitable business opportunities.

6. Credit Risk Analyst Overview

Data Analytics: Perform data mining and analytics to provide strategic business recommendations
Risk Mitigation: Review identified risks and liabilities, inform and recommend resolutions with business lines to mitigate risk potential
Risk Monitoring: Monitor, oversee, report, and analyze key risk indicators to drive business decisions
Statistical Analysis: Apply statistical techniques to analyze trends and uncover risks and opportunities related to portfolio management, originations, and operational loss
Dashboard Reporting: Prepare monthly dashboard reports, identify trends, and present thoughtful, actionable solutions for implementation
Data Preparation: Identify and prepare relevant information and data sources for risk analysis
Risk Data Innovation: Foster new risk data-driven approaches to generate business insight and address unanswered business problems
Product Enhancement: Support the enhancement of analytical risk-based products and services to improve business value and service quality
Product Development: Support the exploration and development of future internal products leveraged for risk analytics
Stakeholder Relationships: Build and maintain sustainable relationships with key business stakeholders
Data Presentation: Validate, interpret, and present data findings to the team, encapsulating analytic findings into executive-level summary documents

7. Credit Risk Analyst Tasks

Process Improvement: Support the team in process and operational improvements related to data analysis, data quality management, and credit risk reporting
Continuous Improvement: Ensure continuous improvements in process excellence, reporting standards, data quality, and related documentation (simplification, standardization, automation, efficiency gains)
Data Analysis Support: Assist team members in deriving trends, conclusions, and recommendations based on data and analysis
Credit Information Sourcing: Source and review credit information across business units, Divisional and Group Risk teams to enhance risk capabilities and reporting within Group Risk
Project Documentation: Assist in developing project documentation in alignment with company policies to support the design of a data quality roadmap
Best Practices: Initiate, facilitate, and capitalize on best practices and innovations, such as new technologies and management practices
Workflow Analysis: Analyze workflow to create process maps and identify areas for potential improvement
Problem Solving: Solve business problems by understanding root causes and driving improvements through qualitative and quantitative data
Cross-functional Collaboration: Collaborate with Group Risk and cross-functional teams to deliver desired business outcomes

8. Credit Risk Analyst Roles

Credit Strategy Development: Develop, maintain, and improve credit risk strategies to enable high-quality, data-driven decisions for customers
Portfolio Analysis: Provide analyses to run credit portfolios against agreed performance indicators
Risk Model Building: Build and monitor credit risk, financial, and economic models
Data Management: Understand, work with, and manage data
Business Growth Support: Support business growth through WPB initiatives, designing and rolling out new lending products or enhancing existing product features
Impact Assessment: Assess the expected impact of proposals to understand how they will perform over time
Regulatory Alignment: Ensure portfolio strategies and processes are aligned with appropriate regulations and regulator guidance
Policy Adherence: Ensure adherence to Group and Regional policies and FIM requirements, providing timely MI and insights into portfolio performance
Customer Fairness: Continually consider the FCA's principle of 'Treating Customers Fairly' (TCF)

9. Credit Risk Analyst Additional Details

Credit Risk Analysis: Complete credit risk analysis across residential and commercial mortgage portfolios and applications to identify insights, threats, and opportunities to influence Policy and Product strategy
Credit Performance Reporting: Provide periodic reporting of credit performance to various stakeholders across the business
Risk Monitoring: Evolve the sophistication of credit risk monitoring and oversight within the Business (Line 1)
Tool Maintenance: Maintain and calibrate credit-related tools and processes
Macro-Economic Impact Analysis: Understand how macro-economic, market, and company-specific events, as well as new financial regulations, impact the portfolio, clients, and counterparty credit quality
Transaction Risk Analysis: Analyze and identify credit risks in transactions (loans and derivatives) and understand their impact on the portfolio and risk appetite
Corporate Analysis: Analyze corporates and counterparties, manage exposures and limits, identify risk drivers, prepare credit memos, make recommendations, and follow up on transaction execution to ensure accurate booking
Risk Reporting Systems: Ensure risk reporting systems contain timely and accurate information, and financial information is received from clients in a timely manner
Client Due Diligence: Participate in client due diligence meetings to understand their strategy, financial performance, and business requirements

10. Credit Risk Analyst Essential Functions

Credit Limit Assessment: Assist the Credit Risk Manager in the accurate and timely assessment of retail credit limit applications from the Sales Team
Credit Check Processing: Ensure all credit checks for retail from the Sales Team are processed promptly and managed proactively
Credit Scoring: Perform accurate credit scoring and rating for retail customers in line with the Credit Policy and Procedures
Limit Application: Ensure all limits for retail customers are correctly applied
Credit Relationships: Establish and maintain strong credit relationships with counterparts
Limit Renewals: Ensure timely processing of renewals for existing limits
Price Commitment Approval: Provide volume and delivery period approval for price commitments in retail sales
Stakeholder Relations: Build relationships with the Retail Sales team and other stakeholders
Data Integration: Integrate data used to calculate provisions within Monzo’s systems