It's all about risk management and financial intelligence, says RCBC, OCBC, and CIMB.
ABF: While banks are encouraged to start granting loans to the growing middle income population in Asia, it also increases the risk of higher NPLs. What do you think would be the best way to control this increasing risk?
RCBC: Ismael Sandig, Senior Executive Vice President - Retail Banking Group
Risk will always be present - key to this must be educating the frontliners. Gone are the days when retail bankers must be confined only to deposit generation. It has come to a point that Business Managers must learn to be well rounded to know financial intelligence entirely.
OCBC: Joseph Wong, Group Chief Credit Officer, Consumer Credit Risk Management, Group Risk Management
While there is a growing middle income population in Asia that banks could possibly offer their financial services (including granting of loans) to, it is important for them to have a robust risk management framework in managing their risk exposure.
An effective risk management programme is a prerequisite for any financially sound institution. All risks must be properly understood, monitored, controlled and managed, with processes closely aligned with the bank’s business strategies.
CIMB Bank: Renzo Viegas, Group Deputy Chief Executive Officer and Head of Consumer Banking
We do not see the middle income group as having a higher risk for lending although we are conscious that any rapid growth in our asset book can lead to higher impairments at a later date.
The introduction of Bank Negara Malaysia’s Responsible Lending Guidelines has been positive in dampening the potential overheating and speculation in the market and is expected to help manage default risk in the medium term.
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