In today’s environment, with potentially lower loan demand and economic uncertainty, many banks have shifted their focus back to Credit. With this in mind, it's important to dig in to the fine details of every deal to make sure you’re filling up the portfolio with secure loans. Rule-of-thumb ratios that “cut it” in the past now require more analysis into the sub-components that make up ratios like the Current and Debt/Worth ratio.
During this webinar, industry veterans Dev Strischek (Principal, Devon Risk Advisory Group) and Dr. Rick Buczynski (Chief Economist, IBISWorld) outline the limitations of relying only on “basic” ratios, and advise attendees on the metrics they’ve found to be most valuable across nearly 100 years of experience in banking.
Jim Fuhrman (Commercial Banking Manager, IBISWorld) highlights IBISWorld’s solutions that provide confidence to more than 500 banks when evaluating each credit opportunity.
Gearing up for this webinar, Dev Strischeck shared with us one of his favorite stories on this topic:
During one of the first loan committee meetings I ever attended, a lender was extolling the credit virtues of his borrower’s balance sheet and proudly pointed out its 2.0x current ratio.
It was at this point that the Chief Credit Officer replied, ‘So the uncollectible receivables plus the unsaleable inventory add up to twice the sum of the past due trade debt and our delinquent note?’
In a few words, the CCO pointed out the qualitative deficiencies of relying too much on quantitative measures.
Tune in to learn more from Dev about the industry financial ratios most important to banking professionals.
