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Score Sheet

This document outlines a credit risk grading score sheet that assigns weights and parameters to assess the financial risk, business risk, management risk, security risk, and relationship risk of a borrower. The score sheet evaluates criteria such as leverage, liquidity, profitability, coverage, size of business, management experience, collateral, guarantees, and account conduct to arrive at an aggregate risk grade for the borrower. Risk grades are determined by calculating scores for each risk component based on the parameters and weights specified.

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estiak hossain
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119 views4 pages

Score Sheet

This document outlines a credit risk grading score sheet that assigns weights and parameters to assess the financial risk, business risk, management risk, security risk, and relationship risk of a borrower. The score sheet evaluates criteria such as leverage, liquidity, profitability, coverage, size of business, management experience, collateral, guarantees, and account conduct to arrive at an aggregate risk grade for the borrower. Risk grades are determined by calculating scores for each risk component based on the parameters and weights specified.

Uploaded by

estiak hossain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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CREDIT RISK GRADING SCORE SHEET Reference No: Borrower: Gro !

Na"e #if an$%: Branch: Industry/Sector: Date of Financials: Completed by: Approved by: N "&er 1 $ ( , & 1 * % Criteria A+ ,inancia* Risk 13 0evera.e: 41&56 Debt 78uity 9atio 4:6 + )imes )otal 0iabilities to )an.ible ;et <orth All calculations should be based on annual financial statements of the borro<er 4audited preferred63 $3 0i8uidity: 41&56 Current 9atio 4:6 + )imes Current Assets to Current 0iabilities Grading Superior "ood Acceptable -ar.inal//atchlist Special -ention Substandard Doubtful Bad/0oss (eig't -./ )ara"eter 0ess than =3$&: =3$1: to =3(& > =3(1: to =3&= > =3&1: to =3*& > =3*1: to 13$& > 13$1: to $3== > $3=1: to $3&= > $3&1: to $3*& > -ore than $3*&: "reater than $3*,: $3&=: to $3*, > $3==: to $3,? > 13&=: to 13?? > 131=: to 13,? > =3?=: to 13=? > =3%=: to =3%? > =3*=: to =3*? > 0ess than =3*=: "reater than $&5 $=5 to $,5 1&5 to 1?5 1=5 to 1,5 *5 to ?5 ,5 to 15 15 to (5 0ess than 15 Aggregate Score: _________

Appendix C
Date:

Risk Grading:

_________

S'ort SU "D ACC ) -"//0 SSS DF B0

Score Fully cash secured! secured by "overnment/International Ban# "uarantee %&' *&+%, 1&+*, &&+1, ,&+&, (&+,, 2(& Score 1& 1, 1( 1$ 11 1= % * = 1& 1, 1( 1$ 11 1= % * = 1& 1, 1( 1$ 1= ? * = Act a* Score )ara"ete O&tained r

(3 rofitability: 41&56 @peratin. rofit -ar.in 456 @peratin. rofit :1== Sales

,3 Covera.e: 4&56 Interest Covera.e 9atio 4:6+ )imes 7arnin. Before Interest A )a> 47BI)6 Interest on debt Tota* Score0,inancia* Risk

-ore than $3==: -ore than 13&1: 0ess than $3==: -ore than 13$&: 0ess than 13&=: -ore than 13==: 0ess than 13$,: 0ess than 13==:

& , ( $ =

-.

Criteria

(eig' t

)ara"eter

Score

B+ B siness1Ind str$ Risk 23/ 13 SiBe of Business 4Sales in BD) crore6

Act a* Score )ara"ete O&tained r

)he siBe of the borro<erCs business measured by the most recent yearCs total sales3 referably based on audited financial statements $3 A.e of Business )he number of years the borro<er has been en.a.ed in the primary line of business3 (3 Business @utloo# A critical assessment of the medium term prospects of the borro<er! ta#in. into account the industry! mar#et share and economic factors3 ,3 Industry "ro<th &3 -ar#et Competition

D 1=3== (=3== E &?3?? 1=3== E $?3?? &3== + ?3?? $3&= + ,3?? 2 $3&= D 1= years D & + 1= years $ + & years 2 $ years Favorable Stable Sli.htly Uncertain Cause for Concern

& , ( $ 1 = ( $ 1 = ( $ 1 =

Stron. 41=5'6 "ood 4D&5 + 1=56 -oderate 415 + &56 ;o "ro<th 42156 Dominant layer -oderately Competitive Fi.hly Competitive Difficult Avera.e 7asy

( $ 1 = $ 1 = $ 1 = 23

13 7ntry/7>it Barriers

Tota* Score4B siness1Ind str$ Risk

Criteria

(eig' t

)ara"eter

Score

Score

C+ 5anage"ent Risk

26/ & ( $ =

Act a* )ara"et er

O&taine d

13 7>perience 4-ana.ement A -ana.ement )eam6

-ore than 1= years in the related line of business &E1= years in the related line of business )he 8uality of mana.ement 1E& years in the related based on the a..re.ate number line of business of years that the Senior ;o e>perience -ana.ement )eam has been in the industry3 $3 Second 0ine/ Succession 9eady Succession Succession <ithin 1+$ years Succession <ithin $+( years Succession in 8uestion Gery "ood -oderate oor 9e.ular Conflict

, ( $ =

(3 )eam /or#

( $ 1 = 26

Tota* Score45anage"ent Risk

Criteria D+ Sec rit$ Risk

(eig't 2./

)ara"eter Fully pled.ed facilities/substantially cash covered/9e.3 -ort.! for FB0 9e.istered Fypothecation 41st char.e/1st ari passu char.e6 $nd Char.e/Inferior char.e Simple hypothecation/ne.ative lien on assets3 ;o security 9e.istered -ort.a.e on -unicipal Corporation/ rime area property3 9e.istered -ort.a.e on ourashava/semi+urban area property 78uitable -ort.a.e or ;o property but plant A machinery as collateral ;e.ative lien on collateral ;o collateral ersonal .uarantee <ith hi.h net <orth or Stron. Corporate "uarantee ersonal "uarantees or Corporate "uarantee <ith avera.e financial stren.th ;o Support/"uarantee

Scor e , ( $ 1 =

Act a* Score )ara"ete O&taine r d

13 Security Covera.e 4 rimary6

$3 Collateral Covera.e 4 roperty 0ocation6

, ( $ 1 =

(3 Support 4"uarantee6

1 =

UtiliBation Compliance Succession )eam 7>perience Barriers rofitability Covera.e 0evera.e A.e Business 0i8uidity Industry Account -ar#et SiBe ersonal of /or# ofto of -ana.ement Business/Ind Financial CREDIT 9elationship Collateral Security Support Ste! I II III I7 7 7I Business Competition Business Deposits Conduct @utloo# "ro<th 0imit of9is# ustry 9is# RISK 9is# Covera.e 9is# Identif$ A**ocate Esta&*is' Assign In! Arri8e a** tt'e at Covenants/Co )rinci!a* weig'tages data t'e Ke$ Credit to arri8e Risk Risk to ndition Co"!onents )rinci!a* )ara"eters eac' at Grading t'e of score t'e &ased Risk ke$ on Criteria (eig't Co"!onents !ara"eters+ t'e on tota* ke$ score Tota* Score4 Sec rit$ Risk !ara"eters+ o&tained+

)ara"eter

Scor e 2. Scor e & , $ =

Act a* Score )ara"ete O&taine r d Act a* Score )ara"ete O&taine r d

Criteria E+ Re*ations'i! Risk 13 Account Conduct

(eig't 2./

)ara"eter -ore than ( 4three6 years accounts <ith faultless record 0ess than ( 4three6 years accounts <ith faultless record Accounts havin. satisfactory dealin.s <ith some late payments Fre8uent ast dues A Irre.ular dealin.s in account -ore than 1=5 ,=5 + 1=5 0ess than ,=5 Full Compliance Some ;on+Compliance ;o Compliance

$3 UtiliBation of 0imit 4actual/proHection6 (3 Compliance of Covenants / Conditions ,3 ersonal Deposits

$ 1 = $ 1 = 1

ersonal accounts of the #ey business Sponsors/ )he e>tent to <hich the ban# rincipals are maintained in the maintains a personal ban#in. ban#! <ith si.nificant deposits relationship <ith the #ey ;o depository relationship business sponsors/principals3 Tota* Score4Re*ations'i! Risk Grand Tota*4 A** Risk

= 2. 2..

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