ADVANCED CREDIT PORTFOLIO MANAGEMENT

INTRODUCTION
Credit portfolio management is about more than individual loan decisions; it focuses on managing risk across the entire portfolio to optimize returns and minimize losses. Many institutions face challenges not because of poor credit assessments, but due to weak portfolio oversight, poor diversification, and inadequate monitoring.

This two-day programme is designed to equip participants with advanced skills to assess, manage, and optimize credit portfolios. It emphasizes practical strategies for portfolio risk assessment, monitoring, and decision-making, ensuring participants can make informed, data-driven choices to protect and grow their portfolios.
 

COURSE OBJECTIVES

By the end of this programme, participants will be able to:

• Understand portfolio-level credit risk and its implications
• Assess credit portfolio performance using quantitative and qualitative methods
• Apply strategies for diversification and risk optimization
• Identify and manage concentrations and sector exposures
• Handle non-performing loans and distressed assets effectively
• Integrate regulatory and governance requirements into portfolio management

COURSE OUTLINE

MODULE 1: ADVANCED CREDIT RISK CONCEPTS
• Understanding portfolio-level risk
• Difference between individual and portfolio credit risk
• Risk-adjusted return and performance metrics
• Common challenges in portfolio management
• Importance of proactive risk oversight

MODULE 2: CREDIT PORTFOLIO CONSTRUCTION AND DIVERSIFICATION
• Principles of portfolio diversification
• Exposure limits by sector, borrower, and geography
• Balancing risk and return objectives
• Techniques for building a resilient portfolio
• Strategic allocation decisions

MODULE 3: PORTFOLIO RISK ASSESSMENT
• Evaluating portfolio quality and creditworthiness
• Key metrics: Probability of Default (PD), Loss Given Default (LGD), Exposure at Default (EAD)
• Stress testing and scenario analysis
• Identifying concentration and correlation risks
• Using analytics to inform portfolio decisions

MODULE 4: CREDIT RISK MODELING AND STRESS TESTING
• Introduction to portfolio risk models
• Predictive modeling for default and loss estimation
• Scenario planning under economic stress
• Understanding model limitations and assumptions
• Using models to support decision-making

MODULE 5: PERFORMANCE MONITORING AND EARLY WARNING SYSTEMS
• Monitoring portfolio health and trends
• Early warning indicators for deteriorating assets
• Conducting periodic portfolio reviews
• Exception reporting and escalation
• Integrating monitoring insights into decision-making

MODULE 6: CONCENTRATION AND SECTOR RISK MANAGEMENT
• Identifying and measuring concentration risk
• Managing sector and geographic exposures
• Strategies for reducing portfolio risk concentrations
• Scenario planning and stress simulations
• Risk mitigation techniques

MODULE 7: NON-PERFORMING LOANS AND DISTRESSED ASSETS
• Identifying early signs of troubled assets
• Classification, provisioning, and regulatory considerations
• Recovery strategies and workout plans
• Legal and operational issues in distressed asset management
• Minimizing losses through proactive intervention

MODULE 8: PORTFOLIO OPTIMIZATION AND STRATEGIC DECISION-MAKING
• Risk-adjusted optimization techniques
• Portfolio rebalancing strategies
• Trade-offs between risk, return, and liquidity
• Using analytics and scenario planning for strategic decisions
• Aligning portfolio management with business goals

MODULE 9: REGULATORY FRAMEWORKS AND GOVERNANCE
• Key regulations impacting credit portfolios
• Capital adequacy and provisioning rules
• Compliance and reporting obligations
• Governance structures and oversight practices
• Embedding discipline and accountability into portfolio management

MODULE 10: CASE STUDIES, PRACTICAL EXERCISES, AND ACTION PLANS
• Real-world portfolio management scenarios
• Hands-on exercises in evaluation, risk assessment, and optimization
• Lessons from past credit failures
• Group discussions and problem-solving sessions
• Action plans for applying knowledge in participants’ institutions