| BoCom to create rating system to assess credit worthiness |
SHANGHAI, June 30 -- BANK of Communications will invest at least 100 million yuan (US$13.1 million) to set up an internal rating system to assess the credit worthiness of individual borrowers to cut bad loans as consumer lending accelerates.
The Shanghai-based lender yesterday signed agreements with consulting firms Oliver Wyman and Accenture on setting up the system.
The rating system covers rating on credit cards, individual consumer lending, mortgages and small- and medium-sized lending. The bank plans to launch the system before 2010.
The move signals the start of a three-year program to systematically grade its 40 million retail customers and card holders.
"The move will help increase BoCom's risk management strength on retail banking," said Zhou Xiao, general manager of BoCom's retail lending management.
Information stored in the nationwide individual credit database, set up by the central bank, will also be considered in the bank's rating system.
China last year set up the world's largest database, which stores the credit records of more than 11 million companies and 533 million individuals, to help commercial banks and most rural cooperatives to manage risks and avoid potential fraud.
Loans to individuals account for 14 percent of BoCom's total advances.
The country's sixth-biggest lender has already started credit rating on its corporate clients.
|
|
