Public Bank Berhad (PB) is the largest domestic bank in Malaysia. It was founded by Tan Sri Dato’ Sri Dr. The Hong Piow in year 1966. One year later, the bank was listed in KLSE (year 1967). Public Bank is highly well-known for its asset quality, strong balance sheet, good corporate culture, wise management and high class customer service. Public Bank is offering a wide range of financial services which comprise of retail commercial and consumer loans, trade finance, wealth management products, online banking, and other financial and banking products and services. Moreover, as Gold is appreciating in value and is assumed as best product to invest, Public Bank offers the service of investment in remittances products. It also deals in mutual
…show more content…
Credit risk is defined as potential of counterparty or customer incapable to meet their payment obligations under the agreed terms. Loans are the biggest and significant source of credit risk to Public Bank. However, there are also other financial instruments and bank activities increasingly contribute to credit risk, both off and on balance sheet; such as interbank transactions, foreign exchange transactions, transactions settlement, trade financing, credit derivatives, and etc. Default risk, concentrating risk and country risk are interconnected with and contribute to credit …show more content…
PB generally charge its interest rate on borrowers based on risk-based pricing. According to this practice, borrowers who are potentially to default are charged on a higher interest rate. The interest rate charged is based on the factor of credit rating, loan purpose, credit spread, and loan-to-value ratio. Moreover, PB can also establish credit risk rating system and advanced Internal Ratings-Based (IRB) to calculate credit risk capital requirement based on Basel II. Furthermore, diversify its borrower pool also can minimize the credit risk. This is due to the reason of larger the number of borrower, the smaller the unsystematic credit
Credit risk is defined as potential of counterparty or customer incapable to meet their payment obligations under the agreed terms. Loans are the biggest and significant source of credit risk to Public Bank. However, there are also other financial instruments and bank activities increasingly contribute to credit risk, both off and on balance sheet; such as interbank transactions, foreign exchange transactions, transactions settlement, trade financing, credit derivatives, and etc. Default risk, concentrating risk and country risk are interconnected with and contribute to credit …show more content…
PB generally charge its interest rate on borrowers based on risk-based pricing. According to this practice, borrowers who are potentially to default are charged on a higher interest rate. The interest rate charged is based on the factor of credit rating, loan purpose, credit spread, and loan-to-value ratio. Moreover, PB can also establish credit risk rating system and advanced Internal Ratings-Based (IRB) to calculate credit risk capital requirement based on Basel II. Furthermore, diversify its borrower pool also can minimize the credit risk. This is due to the reason of larger the number of borrower, the smaller the unsystematic credit