Outlines

Module 1:  Introduction to Non-performing loans

• Introduction to the elements of credit
  • Element of uncertainty
  • Element of confidence
  • Element of time
    
    
  • Definition of non-performing loans
    • Non-performing projects
    • Non-performing borrowers
      
      
    • Causes of non-performing loans
      • Inappropriate financing tranches and/or credit facilities
      • Inadequate credit analysis
      • Defective loan monitoring
      • Disbursement problems
        
        
      • Lender causes
      • Borrower causes
      • Environmental causes

 

Module 2:  The Indicators of the Non-performing Loan

• The four stages of the non-performing loan
  • Short-term liquidity problem
  • Long-term liquidity problem
  • Deteriorating financial structure
  • Complete failure
    
    
  • The indicators of non-performing loans in the financial statements
    • Income statement
    • Balance sheet
    • Financial ratios and indicators
      
      
    • Indicators of problem loans generated internally by clients’ accounts in banks
      • Borrower account movements
      • Analysis of the borrower’s goods and / or services
      • Analysis of the borrower’s guarantees
      • Analysis of unforeseen guarantees related to clients
        
        
      • Problem loan indicators generated from client information and field visits
      • The usage of the Eltman predictor

 

Module 3:  The Banking Treatment of Non-performing Loans

• Strategies for dealing with non-performing loans
  • Liquidation
  • Settlement
    
    
  • Various scenarios for modifying the status of borrowers in default
    • Rescheduling the debt
    • Financial injection    
    • Equity participation
    • Settlement through reducing bank profitability

 

Module 4:  The Banking Treatment of Non-Performing Investment Projects

• The treatment of failing projects due to the lack of a sound feasibility study
  • The cash injection method
  • Transitioning part of the frozen loans to equity participation
  • Recovering the non-performing loan by marketing the goods and services of the borrower in default

 

Module 5:  Monitoring Rescheduled Non-performing Loans

• The importance of grading and sequencing when rescheduling non-performing loans
• Rescheduling non-performing loan repayments
• On-site monitoring

 

Module 6:  Managing Non-Performing Loans

• Introduction to the management of non-performing loans
• The functions and responsibilities of problem loan management
• Procedures for transferring the borrower from performing loans to non performing loans

 

Module 7:  The Principles of Borrower Credit Ratings and Provisioning

• Management of credit risk and borrower credit risk ratings
  • Credit risk management
  • The explanation of the Obligor Risk Rate (ORR)
  • Credit ratings and loan loss provisions   
  • The accounting treatment of irregular loan repayments
  • The rules for determining the fair market value of pledged mortgage collateral
  • The general rules for provisioning
    
    
  • Management of credit risk and the classification of consumer and residential mortgage loans

         Introduction

• Credit risk management
• Credit ratings, provisioning and the status of real estate
• The accounting treatment of irregular returns and the general rules for provisioning
  
  
• Credit risk management and the classification of small loans
  • Introduction
  • Credit risk management
  • Credit ratings and provisioning
  • The accounting treatment of loan repayments
  • General rules for provisioning

 

Module 8:  Lessons Learned from Classified Loans

• The necessity of a credit policy approved by the board of directors
• The necessity of a standardized credit information system
•  The necessity of sound risk assessment
• The necessity of regular document review and field loan monitoring
• The importance of credit quality standards and sound credit analysis
• Emphasis on collateral
• The importance of resolving non-performing loans

 

Module 9:  Legal Aspects of Working with Non-performing Loans

• The legal status of the borrower in default
• Status of the defaulted borrower’s collateral

Who Should Attend

• This course is intended for employees in project finance, lending and credit administration in banks and other financial institutions and internal audit staff.
• Credit officers
• Credit Risk Officers .
• Credit Risk Seniors .
• Accountants.
• Financial analysis .
• Auditors .
• Operations supervisors.
• Trade Finance officers .
• The banking sector staff from modern and medium levels of expertise in credit facilities with various divisions: individuals facilities, corporate facilities, SMEs facilities,  and banking circles risk, credit operations and services, and treasury departments, and sales departments.

Duration

5 Days