1. Writing and Presentation
Credit Reviews

2. The Credit Review Function
The primary goal of the loan review function to reduce loan losses. Bank credit review programs evaluate the quality and administration of loans after they are booked, assisting loan officers in strengthening their loans, and informing management of the condition of the loan portfolio on a regular basis by way of oral and written analysis. The most important report is the "credit review"

3. The Credit Review Function
Purpose of the review
Business background. Nature of business, management and control; Industry, macroeconomic sensitivities and/or company problems.
Name and address

4. A Credit Review Outline
Provide all sources of information: Example:- summarize the work completed.- examined financial statements only;- personal visits with company management;- talked with other banks;- consulted with bank industry experts;- researched other relevant sources
Findings: Organize your findings under the following headings:
financial reporting
fiscal year
noteworthy trends
financial needs (including sources of repayment)
conclusions.

5. A Credit Review Outline
List clearly and concisely the positive and negative factors of the credit deduced from your analysis. Recommendations (where required).
Back up each finding by reference to text, statistical exhibits or computer printout.

6. Credit Review Writing Policy and Suggestions
A solid credit analysis is comprehensive, unbiased, and independent analysis of key credit issues.
Credit administrators might provide a detailed outline to help analysts pre sent comprehensive information. However, encourage them to exercise a discretion regarding the content of the reviews/reports. Typical outlines follow:

7. Credit Review Outline Purpose of the review
Company background and bank relationship. The information provided in this section should be factual, not open to individual interpretation. A description of the borrower's business, its products or services, markets served, main competitors should be developed accurately

8. Credit Review Outline
Identification and discussion of key issues affecting repayment ability, including an industry analysis. What must happen in order for the borrower to be able to pay the loan back as structured? Conversely, what could happen that would affect the borrower's ability to repay?
The answers to these questions make up the largest part of the credit review The results form the basis of: Analysis of material fiscal changes in the financial statements including balance sheet, income statement and cash flow.

9. Credit Review Outline
Prioritize fiscal analysis: balance sheet provides primary source of payment; or cash flow provides primary source of payment etc.
Projection analysis including critical assumption and financial needs
Debt capacity and financial strategies
Analysis of collateral and/or "second way out" protection
Explanation of material changes
Strengths and weakness
Recommendation

10. Weed Out Unnecessary Information. Look At What's Important
Credit problems have increased the requirement for information, resulting in a proliferation of reports. Information that creditors are currently producing might be necessary, but much information is redundant.
Assembling a group that consists of the bank's staff and line personnel can be helpful in distinguishing between necessary and unnecessary information