The Economic Essence and Significance of Managing the Credit Portfolio of Commercial Banks
Keywords:
commercial bank, loan portfolio, credit risk, risk management, bank liquidity, investments, diversification, financial stability.Abstract
Commercial banks are one of the most important institutions of the economy, playing a crucial role in the efficient allocation of financial resources and attracting investments. Managing the credit portfolio is one of the central aspects of banking activities, directly affecting its financial stability, liquidity level, and profitability. The credit portfolio represents the overall structure of loans issued by a bank, consolidating all credits in one place. Effective management of the credit portfolio provides several advantages for commercial banks. Firstly, it helps minimize credit risks. Assessing and analyzing credit risks in advance reduces the bank's potential losses. Additionally, diversification prevents bank loans from being concentrated in a single segment, thereby enhancing financial stability. In conclusion, this article explores the concept of the credit portfolio, methods for its effective management, issues related to providing credit resources to various sectors of the economy, and opportunities for developing long-term and reliable cooperation with clients.
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