Analysis of the Financial Condition of the Borrower and the Credit Risk Assessment in a Commercial Bank

Because of changes in the market of banking products and services and due to a number of external changes, banks need to increase the efficiency of their credit risk assessment systems, using simple (and cheap), but at the same time accurate models that take into account the financial performance of potential borrowers, the macroeconomic situation and others factors affecting their creditworthiness. This paper examines the impact of the industry component on the financial condition of corporate borrowers and on their creditworthiness. The work is divided into 3 parts. The first part presents the basic theoretical principles necessary to compile a complete picture of the study, as well as a review of the literature on this topic. In the second part, we built a model for estimating the probability of default from various financial and macroeconomic factors, considering the industry of the company, and also analyzed the impact of the company's industry on the probability of its default. The third part defines two optimal sets of financial indicators for predicting the probability of default by companies from the wholesale trade industry.