•
for corporate credit exposures - in accordance with the advanced internal ratings based method, excluding
exposures to governments, central banks, local government units, public sector entities and all exposures of
ING Commercial Finance S.A., for which the Group applies the standardised method.
Calculation of impairment for expected credit losses in the Bank for all credit exposures is performed in accordance
with International Financial Reporting Standards.
Credit risk management of individually significant credit exposures
Credit risk management of individually significant credit exposures includes:
•
determination of the credit risk management process for credit risk-bearing transactions,
•
managing documentation requirements for the Bank’s credit client,
•
definition of a credit analysis standard,
•
setting a maximum level of DSTI/DSI, LTV, and a minimum level of own contribution for specific products, types
of transactions,
•
development of rules for making credit decisions and management of credit competencies,
•
managing the following rules:
−
determining risk measures using risk models used by the Bank,
−
verify the timeliness of repayments,
−
monitoring the economic and financial situation of the client,
−
monitoring the customer’s compliance with contractual conditions,
−
monitoring of other defined warning signals,
−
accepting and monitoring collateral accepted by the Bank,
−
use and monitoring of limits available at the Bank.
•
rules for creating allowances for expected credit losses for credit exposures and provisions for off-balance
sheet liabilities,
•
credit risk management for clients from the portfolio in Stage 3.
The following activities are carried out as part of the process of granting and managing individually significant credit
exposures:
−
client and transaction risk assessment,
−
taking credit decision,
−
monitoring,
−
restructuring and recovery.
Client and transaction risk assessment
The most important elements in the assessment of customer credit risk and transactions include
:
•
assessment of clients’ creditworthiness
,
•
assessment of creditworthiness (quantitative assessment)
,
•
collateral assessment
,
•
transaction risk assessment
.
Assessment of clients’ creditworthiness
The Bank reviews clients’ creditworthiness by:
−
verifying compliance with minimum criteria,
−
determining clients’ rating or score in the rating or scoring process respectively.
Measurement of the client’s risk in the rating or scoring process is based on the estimated PD (default probability).
The condition for providing financing to the client is to establish a rating or scoring assessment for the client at a
specific minimum level for a given type of client, credit process or product.
The assessment of the creditworthiness of MidCorp and SME business clients and Wholesale Banking (WB) clients in
the rating process is based on::
−
rating awarded to entities applying for credit exposure, providing collateral (e.g. sureties, guarantors) and
other entities, if required by the specificity of the collateral or transaction (e.g. debtors of receivables
assigned to the Bank),
−
the principle of two pairs of eyes, i.e. inter alia:
▪
commercial functions are separated from the rating approval function that is performed by the CRO
Division units, or
▪
the rules of operation of automatic rating models, which are approved by the Credit Policy Committee.
