Specification of Competency Standards
for the Banking Industry
Unit of Competency
Functional Area - 3. General Enterprise Banking Credit Management
(Key Function
– 3.2 Credit Acquisition )
Specification of Competency Standards
for the Banking Industry
Unit of Competency
Functional Area - 3. General Enterprise Banking Credit Management
(Key Function
– 3.2 Credit Acquisition )
Title
Conduct risk assessment for unsecured and / or secured lending using scorecard approach and
proceed with approval
Code
109261L4
Range
Conducting preliminary risk assessment on credit application. This applies to risk assessment
using scorecard approach covering small amount lending with collateral (e.g. SME financing
guarantee scheme, overdraft, accounts receivable financing).
Level
4
Credit
3 （For Reference Only）
Competency Performance Requirements
1. Knowledge in the Subject Area
Be able to:
Familiarize theories and concepts related to credit assessment in order to assess the
risks of loan application;
Understand the requirements of the bank in credit assessment to ensure the results are
comply with credit policy before proceeding to approval;
Possess product knowledge on the features of different loan products offered by the
bank in order to judge the suitability of loan applicants.
2. Applications
Be able to:
Examine all necessary documents and analyse applicants’ financial conditions (e.g.
credit histories, property evaluations, financial standards etc.) and business operations;
Examine data regarding the application provided from applicants and identify
irregularities or missing information;
Examine the report on collateral valuation and take the results into consideration when
computing risks;
Calculate applicants’ ability to repay loan, estimate time for debt repayment given
amount of debt, interest rates and available funds;
Coordinate with credit association / bureaux and other business representatives to
exchange credit information;
Calculate the amount to be allocated to loan loss reserve and capital charges for
individual loan application based on default probability, loss levels, etc.
3. Professional Behaviour and Attitude
Be able to:
Provide recommendation on approval (with or without condition(s) / rejection on loan
application and the approved loan size with justifications provided;
Determine interest rates and formulate repayment schedules based on information (e.g.
earnings, savings, payment history, etc.);
Calculate the probability of default and calculate the loan-to-value ratio;
Provide suggestions on payment terms and length of loan, accounting for loan purpose,
collateral, cash flow and loan amount, credit history in accordance with internal
guidelines;
Provide suggestions on terms and conditions (e.g. sales and leaseback) on loan
including requirements on collateral and overdue treatment during delay of payment or
failure to pay.