Dresdner Kleinwort Wasserstein
Ingrid works in the credit risk management team of DrKW in London, who are responsible for identifying and quantifying the risk that a particular company or institution will fail to meet their obligations to the bank in accordance with agreed terms. She originally graduated with an MSc in Finance from the EM Lyon Business School in France.
Q: What does a credit risk analyst do?
We need to analyse the company’s financial structure and future cash flows, its sector and competitors, to decide whether the bank should be exposed to this particular company, based on the amount of risk and return involved. If a company does not have the correct risk profile for us we might ask them to pledge some of their assets to us as security or negotiate some clauses in the legal documentation as risk mitigants.
Q: Do you get to go out and meet clients?
Yes. When we’re analyzing small private companies for which limited public information is available, we typically meet them to discuss their business models, eventually do site visits, to assess their credit worthiness. Last week, for example, I visited clients in Switzerland and Greece, which was really interesting as they were small industrial borrowers with substantial growth prospects and there was very little existing information on them.
Q: How do credit analysts fit into the bigger picture of operations at DrKW?
We’re at the forefront of the bank’s decision-making process for new transactions. This covers everything from corporate lending and underwriting to trading on financial markets. We have a role of providing pro-active advice and counsel on the transaction and ensuring that credit concerns are raised in a timely manner. As a result we have direct and close relationships with the front office: the investment bankers, the sales force, traders and the lending teams. We also work closely with the legal and compliance teams.
Q: What’s the most challenging aspect of your role?
After complex negotiations and despite our constant input at the various phases of the negotiation, the final risk involved in a particular trade may still remain above the bank’s risk appetite for the counterparty. We then have to explain to the sales person, who often has put substantial effort into winning the business, that we cannot go ahead with the transaction under the final terms. It is important to remember that the bank has a defined risk appetite for each counterparty.
Ingrid’s tips- If you work in risk, you need to be resilient, persuasive, and able to stand your own ground when a deal can’t go ahead.
- You also need to be highly analytical, very logical, and capable of making an informed judgment based on various data sources.
- And if in doubt, ask questions, question your own assumptions, and discuss openly your risk concerns, as this remains the best way to establish the whole picture.
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UK
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