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08:57 Jul 5, 2004
English to Chinese translations [PRO] Bus/Financial - Finance (general)
English term or phrase:credit profiles
Mr Boyd says that as banks start looking at the Basel II world, they are reassessing their relationships to ensure that they are earning an appropriate return on these relationships. As the capital associated with lending adjusts from the Basel I methodology to that of Basel II, he believes clients will perceive a change in behaviour towards them from their banks.
“Borrowers with weaker credit profiles may now find that the return on their credit alone is not going to meet a bank’s hurdle rate. In this case the bank will normally look at the ancillary revenue on the relationship, to see if on this basis they can get above the hurdle for the amount of capital committed. Banks are becoming more aware of which client relationships are getting them over that hurdle or, in other words, which clients they can add the most value to in exchange for a good return. When this can’t be achieved, we’ve seen banks reducing the amount of capital they are willing to commit to some clients in order to bring them in line with their target return. We expect that this trend will continue,” says Mr Boyd.