ibm business consulting services ibm.com /bcs managing credit risk for competitive advantage in...

IBM Business Consulting Services

ibm.com/bcs

Managing Credit Risk for Competitive Advantage in China

Richard Bisset, Executive Project manager,Risk and Compliance, IBM Greater China Group.

Shanghai, Friday 29th February,2008

IBM Global Business Services

2 © Copyright IBM Corporation 2007

2008 challenges for Chinese banks2008 年中国的银行的关键因素

Improve and enhance standards, systems and processes to avoid bad debt.

Manage data origination, information distribution and reporting

Manage loan origination, NPL management & collection processes

Find a balance between compliance and business performance

Find the equilibrium between centralization and control of branches.

Need to integrate management information and create value added knowledge.

Need to improve level of awareness and understanding of bank staff to improve internal controls and governance



Table of Contents 目录

Credit Risk Management, Data and Economic Capital

Managing the information

The Credit Factory

The Pricing of Credit: The link between economic capital and CRM

Lifecycle Risk Management

Risk Management Issues

Human Capital Management – Risk Management Benefits

Conclusions



Risk Management is the Bridge between Data and Bank Objectives with Shareholder Value as the Target . 风险管理是用以连接数据与银行目标，即对股东的投资回报的桥梁

Risk

MgmtData

Analytics

Governance

ObjectivesToolsData & IT

Measurements Reporting

Management Processes

Moving from origination function to a risk/portfolio management function methodology

Moving from collecting interest and principal payments to a portfolio total return measurement approach

Deliver Shareholder

Value

Bu

sin

ess

Fro

nt

Off

ice

/Tra

nsa

ctio

n CommercialLoans, Leases, LoC

ConsumerAuto, Residential, Cards, HEL

Asset MgmtMutual Funds, Custodian, Financial Planning

Processing SolutionDebit, credit, private labels, etc

TradingCorp, ABS, FX, Derivatives, etc

OthersTreasury services, etc

Ris

k L

ife

Cyc

le V

iew

Origination & Acquisition•Deal prospecting•risk assessment•Pricing & funding•Credit approval•Credit booking

Risk Mgmt & reporting•Payment remittance •Provision•Past due (30,60, 90d)•Risk migration – NPL, charge-off•Performance – ROA, ROE, P/E, Market Cap

Disposition & Recovery• Distressed debt recovery/charge-off

Risk Mgmt/BaselRisk mitigation

(hedging, securitization, syndication)

)()(

111 /))((

tt SDPSDPtt SDPZ



•Credit Risk default risk credit deterioration•Market Risk Interest rate risk Liquidity risk ALM•Operational Risk•Legal Risk•Reputation Risk

•Credit Risk PD/LGD/EAD/M•Market Risk VaR, volatility, NII, Operational Risk AMA, SA, BIA•Legal Risk•Reputation Risk

•Hedging Credit derivatives (CDO/CDS) Interest rate derivatives•Securitization MBS/CMO/ABS/CLO •Syndication senior/junior/equity•Asset Disposition and Restructuring

•RAROC (Risk Adjusted Return on Capital)•EPS (Earnings per Share)•SVA (Shareholder Value Added)•EVA (Enterprise Value Added)

•External Financial Regulators Basel II, Sarbanes-Oxley Shareholders Customers•Internal Portfolio LOB Senior Management Board

Risk Management Polices & Procedures

Risk Management Processes (Monitoring, Execution & Implementation)

ALLL (Allowance of Loan and Lease Loss)

Reserves

Capital Allocation

Economic Capital

Banks need to develop an End to End Integrated Risk Management System提供端对端的风险管理解决方案

Risk

IdentificationReporting

Performance

Measurement

Portfolio

Management

Risk

Measurement




The Risk Management, Data and Economic Capital


The Credit Factory


Lifecycle Risk Management.



Conclusions



Data Management ： a Key Challenge for Basel II Compliance 数据管理： Basel II 合规的一个关键因素

Data mgt.

Project mgt.

Impl of sup Review processes

Adherence to disclosures

Sufficient resources

Mgt buy-in

Other

0% 20% 40% 60% 80% 100%

Source: IBM Institute for Business Value analysisBanks and Basel II: How Prepared Are They?, October 2002Based on interviews with 32 Financial institutions worldwide

Percent Responding

Challenges:

Identifying the data

Locating that data in operational systems

Understanding the structure of the data

Extracting and transforming data

Cleansing the data

Choosing a database management system

Fast reliable access to data

Storing risk calculation and analytical results

Production of all regulatory reports

On-line analytical processing capabilities

Data mining Source: IBM Institute for Business Value analysis

Based on interviews with 32 Financial institutions worldwide



Redundant and inconsistent data in various systems that consolidate data for different purposes

Multiple interfaces to source systems are one of the main reasons for huge change efforts

Reporting tools, methodologies/functions and data warehousing aren‘t separated properly and are often redundant

Older source systems frequently generate additional complexity

Inland

PBC & CBF/C DrKW

AuslandTöchter

KDIKDU/KRDFIF930 SAK/CRP

KWV

KDA

KDV WEGKDO/KDR HGD

ELBA FC RWI

WPD WERSMABILA /BORIS

OLBAMI

AIDAADB DKW Reuschel

ManuelleGeschäfte

Calypso

PROFITDreLUXCOM

FORWARDFID/FIN MIDASDBLAGlobus

CORDOBA SEBIOSKDDPAD

ANLOS / ACBS

MARCX/BF

BF

INV

TEA KDW

Reports

MWD CDS MKBCAD CRIS DCL/RWS

Funktionen

LOB XFinance LOB YRisk Management

INV

Reports, strategies and positions

Functions

Source Systems

The major challenge is to overcome the lack of integration currently leading to poor data quality & high costs for Credit Risk, Finance & CRM Management 对很多银行来说，主要挑战是如何克服由于缺少系统架构而导致的不良数据质量以及风险管理所需的高额费用

Inconsistencies in overlapping reports on business side


© Copyright IBM Corporation 2007

For credit risk, Banks need to build the Management Architecture对于信贷风险，银行必须创造合适的架构系统和管理体系

Credit Risk Data Mart

Key AreaKey Area

Improvement Opportunity

Improvement Opportunity

Set up proper governance structure to actively manage credit data, identify credit data ownership, assign roles and responsibilities

Initiate credit data standard definition, data requirement planning, data quality management, data security management

Development of data management tools and methodologies to enhance data quality and analysis of the risk output, as well as to streamline the collection, consolidation and extraction of counterparty and credit data from the Bank’s existing systems

1 Improvements on Credit Data Governance

Establishment of data warehousing based around an open architecture and supports the key functional areas related to the credit process, such as risk analysis, relationship management, profitability, collateral and asset and liability management.

2 Establishment of Credit Risk Data Mart



This in One Possibility for Credit Risk Management Architecture

Credit Risk / Portfolio Analysis (CRS)

Core Banking System (Credit Related Processing)

EAI Technology Infrastructure

Loans Origination(Loans Application, Credit Approval, Document Verification & Credit Signing)

Loans Servicing(Loans Drawdown, Repayment Processin

g & Account Closing)

Risk Concentration

Portfolio Summary

Credit Rating Shift

Large Exposure Management

Counter-party Risk Analysis

Country Risk Analysis

Industry Sector Risk Analysis

Loss Forecasting

VaR Based AnalysisSensitivity Analysis Stress Test Analysis “What-if” Simulation

Portfolio Monitoring

PortfolioAnalysis

Remedial Processing(Fraud Detection, Collection, Loans Restructuring,

Past-Due, NPL & Write-off Processing, Collateral Acquisitions & Mgt, Assets Recovery

Credit Control(Customer Credit Review, Loans Review, Collateral Management, Customer Limit Management, Credit Management Process Auditing &

Credit Operation Reporting

Payment & Collection RecordsLoans AccountsLoans Applications

Customer Information File

LoansDefault History

Payment & Collection

History

Loans Appln &

Scoring History

Customer/ Portfolio

Characteristics

Credit Risk Management Data Mart DBW

Credit Workflow Platform

Approval Limit Control

Loan Origination

Rule-basedCredit

Approval

Credit Process Status

Tracking

PipelineManagement

Performance Reporting

Document Management

Core Credit Risk Engine

Exposure, EL, UL

Risk Modelling (incl. PD & LGD modeing) and Scoring

Credit Adjusted Valuation

Limits Engine Decision EngineRisk-based PricingRAROC, Strategy

SimulationMarginal Risk

Rating / Scoring

Limit Setting

Limit Monitoring

Limit Utilization

Approvals

Corporate Financial AnalysisSpreading Analysis

Financial Ratio Analysis

Historical Financial Maintenance

Future Cash Flow Forecasting

CRS Core Applications

Reporting Solution(Reporting & Ad-Hoc Queries)

Data Mining Solution(Data Mining, Model Validation & Testing)



Redundant data have been eliminated and consolidation of data is easier. Changes are only needed to match changing markets

Interfaces between source systems and functions have been unscrambled and are one of the main results of the change efforts

Reporting tools, methodologies/functions and data warehousing have been separated properly and are much more accurate

Source systems have been rationalised and the reporting architecture is simpler

KDIKDU/KRDFIF930 SAK/CRPKDA ELBA FC RWI AIDAADB DKW Reuschel PROFITDreLUXCOM CORDOBA SEBIOSKDDPADMARCX/BF

Reports

MWD CDS MKBCAD CRIS DCL/RWS

Reports, strategies and positions

Functions

Source Systems

With the correct architecture, the picture becomes much simpler and easier to control. Data quality is much higher and costs for Credit Risk, Finance & CRM Management have been greatly reduced 由于正确的架构，结构图将变的更为简单并且易于控制。数据质量大大提高，同时风险管理的费用也显著降低

Inconsistent and overlapping reports on business side have been eliminated






The Credit Factory and Portfolio Management





Conclusions



Transaction Processing

The Credit Factory: The constituent elements in managing the asset and liability portfolio of the bank信用工厂：管理银行资产负债组合的组成要素

Secondary market management

Syndication

Credit Derivatives

Structured deals

CDOs

Secondary market management

Syndication

Credit Derivatives

Structured deals

CDOs

OriginationActive Portfolio

ManagementSecondary market products

Portfolio

Credit

Customers

Branches

ALM

Portfolio

Credit

Customers

Branches

ALM Sec

on

dar

y m

arke

t

Pri

mar

y m

arke

t

Trade ProcessingTrade Processing

Financial ControlFinancial Control

Product ControlProduct Control

Account Management

Behavior Scoring

Attrition Scoring

Response Scoring

Credit Risk Management

Application Scoring

Recovery Management

Collection Scoring



Portfolio Business Objectives资产组合的商业目标

Revenue Enhancement Increased Profits from Up Sell / Cross Sell

Opportunities Increased Profits from Strategic Line Man

agement Programs Increased Profits from Targeted Repricing

Strategies Maximize Likelihood of Repeat Business Improve Customer Service

Procedure Enhancement Manage Workload/Make Efficient Use of

Staff Lower Delinquency/Write-Offs Control Operational Expenses Reduce Required Loss Reserves Lower High Risk Balances

Loss Control Manage Workload Make Efficient Use of Staff Lower Delinquency Lower Write-Offs Control Operational Expenses Reduce Required Loss Reserves Lower High Risk Balances

Improve Profitability Increase Profitable Revenue Reduce Delinquency and Loss Decrease Collection Expenses



Credit Portfolio Management Process信贷资产管理流程

CreditDefault History

Payment & Collection History

Credit Application &Scoring History

Customer/ Portfolio Characteristics

Credit Risk Management Data Mart

Risk Concentration

Portfolio Summary

Credit Rating

Shift

Large Exposure

Mgmt

Counter-party Risk Analysis

Country Risk

Analysis

Industry Sector Risk

Analysis

Loss Forecasting

Portfolio Monitoring

Portfolio Analysis (CRS)

VAR Based AnalysisSensitivity Analysis Stress Test Analysis “What-if” Simulation

Portfolio Analysis

Industry Risk Scoring

Portfolio & Risk Management Strategy

Strategy Matrix

Identify Current Cycle

Phase

Performance Profile Modeling

Equivalent Strategy

Comparison

Suitable Strategy Selection

Implementation & Management






The Credit Factory





Conclusions



Cost of funds资金成本

Pure cost of funds that the branch

would lend

Credit Premium信用溢价Accurate

assessment of expected loss from

credit default

Mark-up加价The margin that makes the loan profitable for the

branch

Cost of Operations运营成本Total cost of activities conducted at the bank

(at branch and head-office levels)

Correct Pricing of loans is a Necessity….it captures both risk and value of CRM 贷款的准确定价至关重要

How can branches use these tools to grow their revenue and profitability 分行如何运用这些工具来增加其收益和利润

How can central units better manage risk exposure arising from systemic factors总行如何更好的管理来自系统性因素的风险敞口

CRM客户关系管理

CREDIT RISK信用风险

ALM资产负债管理 Interest rate offered on a loan贷款利率出价



The final component that brings the profit to the bank; the margin that a bank can charge on a loan is driven by a number of factors, the skill of the banker is determining how they can leverage these factors to their advantage 为银行带来利润的决定性因素决定了贷款利差，银行需要将这些因素转化为优势

No. Key Factors Driving Margin 利润驱动的主要因素 Description 描述 + ve -ve

Competitiveness 竞争力

1 客户细分 customer characteristics The finer the understanding of peculiarities within group of customers, the better a company can manage its risk exposure

2 产品差异化 product differentiation How is my product different from those offered by other banks

3 其它银行分行的竞争 product competition How many banks are offering exact and substitute products in the same market to the same customers

4 潜在的进入壁垒 barriers to entry How difficult is it for a competitor to enter the market

5 产品可获性 cross regional competition Cross regional competition – when corporate differ to head-office to get loans or non-bank competitors

6 人民银行控制 central bank controls Margins on loans and deposits are only allowed within a narrow band based on the central bank reference rate

Risk 风险

1 信用评级 PD What is the risk of default for the borrower

2 抵押交易 LGD What is the amount of collateral against the loan

3 有效的抵押品管理 process management Efficiency of the collateral management & evaluation processes

4 更少的经济资本 ( 对于预期损失 ) EC The amount of capital that has to be applied to unexpected loss

5 与全面的银行资产负债表的关联 concentration How many loans in the portfolio are in the same region & industry

Customer relationship 客户关系

1 关系管理 depth of relationship How deep is our knowledge of the customer and deep is the relationship






The Credit Factory





Conclusions



Lifecycle Credit Risk Management 信贷风险管理的生命周期

PlanningPlanning

AcquireAcquire

MaintainMaintain

CollectionCollection

Write OffWrite Off

Lifecycle Credit Risk

Mgmt

• Product Design

• Marketing Strategy

• Resource Plan

• Acquisition

• Verification

• Decision

• Limit Assignment• Account Review

• Limit Increase

• Cross-sell

• Anti-Attrition

• Collection Strategy

• Recovery Prediction

• External Agency

Management

• Bad debt Write Off

• Provision Calculation

• Product Review



From Basel to CRM : Data plus Analytics 从 Basel到 CRM ：数据加分析

Success = f (customer contact, data analytics, value strategy, decision-making)Success = f (customer contact, data analytics, value strategy, decision-making)

CRM platform automates customer portfolio workflow

and provides access to customer information to

support the sales or service dialogue

CRM platform automates customer portfolio workflow

and provides access to customer information to

support the sales or service dialogue

The content and format of customer treatment and the

business logic that determines when how and what is delivered

to each customer in order to optimise customer value

The content and format of customer treatment and the

business logic that determines when how and what is delivered

to each customer in order to optimise customer value

Using customer data and the rules embedded in the customer

strategies, make customer decisions that optimise value -

before they are needed

Using customer data and the rules embedded in the customer

strategies, make customer decisions that optimise value -

before they are needed

Customer data, data warehousing, analytics tools

and techniques, customer value algorithms, credit portfolio and

customer scorecards

Customer data, data warehousing, analytics tools

and techniques, customer value algorithms, credit portfolio and

customer scorecards



Talking to the grey mass

Understand customer

value

Segment by value

and need

Frame strategies

for treating customers

Decide actions customer by customer

Value

Needs, behaviour

Success=f (customer contact, data analytics, value strategy, decision-making)

Strate

gy

Decisions

Decisions

Decisions

Decisions

Strategy

Strategy

Strategy

Strategy

Contact

Contact

Contact

ContactProduct Product

holdings holdings

HighHigh

Attrition Attrition scorescore

E-channel E-channel preferencepreference

YesYes NoNo

YesYes

Offer e-Offer e-chat chat

room room

Offer e-Offer e-chat chat

room room

Offer advice Offer advice serviceservice

Offer advice Offer advice serviceservice

NoNo

Not HighNot High

Application back-Application back-outout

Leave Leave pagepage

Cash Cash withdrawalwithdrawalData analytic

s

Data analytics

Data analytics

Data analytics



Customer Relationship Management 客户关系管理

Credit PoliciesCredit Guidelines

Credit Risk Management

Risk AppetiteRegulations

Audit and Compliance

CRM SYSTEM

Credit Bureau (Retail)PBoC Loan Database

Demographics

CompetitionEconomic Factors

Political Environment

Internal Data External Data

Business Constraints Market Environment

Customer & Market dataAttrition rates

Retention RatesAcquisition costs

Product Mix

Cross-selling strategy: Up sell / Down sell

Pricing strategy: Give the optimum price to the customer to maximize profit

Credit Line management: Increase / Decrease credit limit according to different customer performance

Collection strategy: To avoid future loss on defaulting customers

ETC…………

Anti-attrition program: Increase customer retention rate by better offers, fee waiving, etc



Interlinkage between Data and Risk Strategy数据和风险战略的关系

Risk & Portfolio Management Strategy

Customer Relationship Management

Risk EngineHistorical Loss DataCredit Risk Rating ModelGenerate individual PD, LGD, EAD,M, Credit Grade and Expected Loss

Collateral ManagementFrom an IRB and MtM approach

Bank’s Credit Risk Repository

Pricing EngineRAROCInformation on cost of funds and administration, profitability, interest rate risk)

Bank’s Data Warehouse

Portfolio DataLoan

MortgagesCash-flow data

Collateral DataSecurities

Real EstateCredit Derivatives, etc

Market DataInterest RatesCredit SpreadsFOREX Rates

Customer Information Customer Profile. External ratings

PD, etc

Core Banking

Administration

Disbursement

Regulatory disclosure

Public disclosure

Portfolio

Credit Risk

ManagementGenerate portfolio PD, EAD, LGD, Correlationsand cVaRCapital and reserves allocation and limits settingStress-testing






The Credit Factory





Conclusions




• Heightened requirements around privacy, security, and various types of risk are requiring financial institutions to take a more proactive, enterprise-wide approach to managing internal governance and compliance issues.

• They need to leverage compliance and risk management in a way that creates new value for the business through greater transparency, better internal controls, better compliance and increased trust.

• Greater transparency is critical, not only because regulators and customers are demanding it, but also because of the emergence of collaborative business models and partnerships.

• Risk management and regulatory compliance require fast, accurate and complete data, but they also require that management and staff understand the financial institution, the regulatory environment and, most importantly, their own roles and obligations within the organization

• The key for financial institutions is to improve governance and compliance enterprise-wide by widening their focus from implementing software solutions that solve specific problems or comply with regulatory and legal requirements to include facilitating a bank-wide system of staff development and training which will ultimately help the bank grow revenue and profits, and manage the business more effectively.

• Going forward, the most critical developmental need in banks in China will be human capital development




• Appropriate Expertise There is little value in having a world class system in place without the expertise to oversee it. The business

of finance has become increasingly complex and this complexity requires a thorough understanding of the bank’s systems and procedures – particularly in the area of risk management

• The Human Element The one element that overrides all others in the successful implementation of internal good governance is the

integrity of staff. It is the most important component of any internal governance program and yet it is easiest to underestimate and the hardest to control.

• Recruitment Recruitment of quality staff, that have strong values and integrity, and investment in training those staff to u

nderstand the importance and relevance of core values in their daily business is the glue that binds all other elements of a successful process together. The media is full of reports of rogue traders (most recently at Societe Generale), or sharp practice within organizations that have occurred through either a lack of understanding of the bank’s systems and procedures or a lack of personal integrity in an employee or group of employees.

• Training and Development Training in ethics and the consequences of the personal actions of employees is an important part of modern

corporate governance. But it is not just ethics and compliance. Compliance only goes so far, the staff have to understand the mechanics of banking to give ethics any basis in fact. It has been found that the single most critical aspect to mitigating risk lies beyond merely installing and closely monitoring world class systems. It is in the management of human resources – from very stringent and thorough hiring processes, to ongoing staff training and development




• Innovation Banking in China is going through enormous changes and the people in the bank need to be able to change

with it. They need to be able to think outside the box and look for new ways to improve the way the bank conducts business. Proper HR management can enable staff to embrace change, rather than fear it.

• Direction, Focus, Mission It is very often the case that staff are unaware of what the Bank wants to achieve. The information flows

are inadequate to ensure that the Bank and its staff are moving in the right direction. Proper HR management can ensure that the correct message and therefore the correct procedures and systems are used to the best advantage of the bank

• Operational Efficiency A better understanding of the job and the staff’s position and purpose in the bank can greatly enhance

operational efficiency, leading to fewer mistakes and lower losses. Proper HR management can provide the tools and the skills to ensure that this happens

• Quality Customer Service Staff that understand their role provide better customer service and therefore better customer satisfaction.

This is key to being able to compete effectively in the market place. Proper HR management can help staff understand just how important the customer is and how to help him.

• Governance and Compliance Proper HR management can instill in staff an appreciation of the bank, its environment, its role in society

and the staff member’s obligations (and those of the bank) to that society.






The Credit Factory





Conclusions



Human Capital Management - Risk Management Benefits

• Staff Development Staff are motivated by many things, but a key ingredient is a sense of self-worth. Training should be a rew

ard which shows the staff how valuable he is to the organization. Proper HR management can equip staff with the capacity to move up through the ranks in the bank.

• Results and Bottom-Line Orientation Without the right framework in place, it is easy for lending staff to lose sight of their primary professional

function – to make profits for the bank. Proper HR management can assist lending staff to understand this and understand the consequence of their actions in terms of bottom-line performance.

• Leadership Every bank wants to groom the leaders of the future. Proper HR management can provide them with the to

ols to achieve this.• Teamwork

Staff in the credit areas should understand that they do not work alone, but are part of a small team of professionals which in turn is part of a larger team. Proper HR management can instill the value of teamwork leading to greater operational efficiency and an esprit de corps

• Loan Quality The easiest way for a bank to lose money is in credit. A lack of understanding of a customer’s business or t

he business environment can lead to serious losses and high levels of NPLs. Proper HR management can help lenders understand the dynamics of lending and the impact bad lending decisions can have.



Human Capital Management - Risk Management Benefits

• Staff Retention and Loyalty Staff turnover is often the result, not only of conditions of employment such as salaries, but also of people

feeling under-appreciated. It can also have a pernicious effect on morale amongst other staff. Proper HR management can overcome this and reduce turnover levels and increase loyalty.

• Lower level of Non-Performing Loans China’s track record on NPLs has been lamentable and whilst the reasons are many (policy lending, preser

vation of employment at SOEs) the only way to avoid a repeat of past mistakes is through training on lending.

• Understanding of the methodology behind the Software Under the new Basel Accord, statistical methodologies are used to calculate risk, capital requirements etc.

It is easy for lending officers to lose the ability to undertake their own analysis of customers. Proper HR management can ensure that lending staff have the ability to make value judgments about counter-parties.

• Performance Personal performance is key to job satisfaction and can be adversely impacted when staff do not understan

d what they are doing. Proper HR management can reduce errors, increase efficiency and provide more and better opportunities to staff for self- development and promotion.

• Profitability The overriding objective of proper HR management is to enhance the profitability of the Bank.






The Credit Factory





Conclusions



Conclusions 结论

With the right investment in data sourcing and packaging, a Bank’s capital requirements can be better managed and the risk measured and controlled.It is important to get the data sourcing and management right first. Reporting and information flows will follow.Based on internal and external information sources, the trick is to get pricing right and correctly target the customerIn a world of securitization and credit derivatives, the effective management of assets and liabilities, and the correct balancing of the bank’s portfolio depends on risk identification through strong database information.The integration of the foregoing points into Credit Risk, Customer Relationship Management and Portfolio Management is essential, but without due care and attention paid to the human capital issues, the effect of any such integration will be limited and the effort to increase shareholder value will only have limited success.



Richard Bisset’s Resume

Richard Bisset is a graduate of Leeds University with a bachelor degree in Chinese and German. Having spent 25 years at HSBC, he joined IBM at the beginning of September 2007 as Executive Project Manager and is now working with Global Business Services, advising on credit risk management, compliance and governance.

During his time with HSBC he worked in many places in the Far East, but by far the most time was spent in Greater China, either in Shanghai or in Hong Kong. A veteran of many roles, the last 12 years of his career with HSBC was in the credit area, including 4 years as Head of Credit Risk Management for HSBC's operations in Japan. In this role he was responsible for both the corporate bank and the securities company, managing a diversified portfolio comprising private banking, corporate banking, financial institutions, project finance and sovereign borrowers.

His career with HSBC culminated in secondments first to Bank of Shanghai (HSBC 8%) in 2004 and the to Bank of Communications (HSBC 19.9%) in 2005. In these roles, he was responsible for advising on Credit Risk Management, handling delinquent loans and implementing best practices in credit risk management. This included creating credit policy, writing credit manuals and training credit staff.

Since late 2007, he has been managing IBM’s downstream project at Bank of Nanjing, whilst at the same time providing input for proposals being made to other Chinese banks.

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