Senior Credit Analyst Interview Questions and Answers

I would rate a bank based on its financial stability, asset quality, management quality, profitability, and market presence.

• Financial stability: Assess the bank's capital adequacy ratio, liquidity ratio, and non-performing assets.

• Asset quality: Evaluate the quality of the bank's loan portfolio and investment securities.

• Management quality: Look at the experience and track record of the bank's management team.

• Profitability: Analyze the bank's return on assets and return on equi...read more

Capital Adequacy Ratio is a measure of a bank's capital in relation to its risk-weighted assets.

• CAR is calculated by dividing a bank's capital (numerator) by its risk-weighted assets (denominator).

• The numerator typically includes Tier 1 and Tier 2 capital, such as equity capital and retained earnings.

• The denominator consists of various types of assets weighted by their risk levels, such as loans, investments, and off-balance sheet items.

• A higher CAR indicates a bank has more ...read more

Assessing working capital limits involves analyzing the company's financial statements, cash flow projections, industry trends, and risk factors.

• Reviewing the company's financial statements to understand its current financial position

• Analyzing cash flow projections to assess the company's ability to meet its short-term obligations

• Considering industry trends and economic conditions that may impact the company's working capital needs

• Evaluating risk factors such as market volati...read more

CET1 Capital includes common equity tier 1 capital, which consists of common shares, retained earnings, and other comprehensive income.

• CET1 Capital is a component of Total Tier Capital used to measure a bank's financial strength.

• It includes common equity tier 1 capital, which consists of common shares, retained earnings, and other comprehensive income.

• Excludes items such as goodwill, intangible assets, and deferred tax assets.

Discussing the impact of climate change on global food security

• Climate change is leading to more frequent and severe weather events, affecting crop yields

• Rising temperatures are altering growing seasons and increasing the spread of pests and diseases

• Changes in precipitation patterns are leading to droughts or floods, impacting food production

• Climate change also affects food distribution and access, exacerbating food insecurity globally

Providing pay slips for the last three months to demonstrate income stability and consistency.

• Ensure pay slips are accurate and up to date

• Highlight any bonuses or additional income

• Explain any fluctuations in income if necessary

ECL model stands for Expected Credit Loss model, used to estimate potential losses from defaulting loans.

• ECL model is a financial model used by banks to estimate potential credit losses from defaulting loans.

• It takes into account factors such as historical data, economic conditions, and borrower creditworthiness.

• The model helps banks set aside appropriate reserves to cover potential losses.

• ECL model is a key component of IFRS 9 accounting standards for financial instruments.