RAROC Defines Profitable Versus Good Lending
This is the fourth article of the 5-part Credit Risk Management in SME and Corporate Lending series. Building on capital insights, we explore RAROC as a critical metric to evaluate whether deals truly create value, helping lenders separate merely “safe” lending from genuinely profitable and sustainable lending strategies.
Capital Is a Signal, Not a Constraint
This is the third article of the 5-part Credit Risk Management in SME and Corporate Lending series. We shift focus to capital management, and demonstrate how capital should guide decision-making and signal where risk-adjusted discipline is required, rather than being seen as a mere limit on lending.
Provisions Are Not Enough: Understanding Unexpected Loss
This is the second article of the 5-part Credit Risk Management in SME and Corporate Lending series. We delve into the limitations of relying solely on provisions, and how to anticipate and plan for unexpected losses. Risk management should be proactive, not reactive.
Credit Risk Starts with Measurement, Not Instinct
This is the first article of the 5-part Credit Risk Management in SME and Corporate Lending series. We begin by showing why effective credit risk management starts with precise measurement, rather than intuition or anecdotal judgment.