An Export Credit Agency Leverages Credit Ratings and Industry Data to Minimize Unwanted Exposure

The creditworthiness of banks over the last two years has been significantly impacted by the effects of the coronavirus pandemic, oil price shocks, political unrest and heightened market volatility. Since the magnitude varies by industry, geography and rating level, it has become very important to look at many aspects of an organization to assess its creditworthiness.

This credit export agency in MEA lends to importers and exporters in the region and establishes correspondent relationships with banks that support the other end of a transaction for buyers and sellers. The risk and economics team at the agency conducts credit risk analysis on the exposures taken and also establishes the overall risk mandate that outlines how much exposure to take across countries and sectors.

Pain Points

Members of the risk and economics team were spending a great deal of time gathering data from publicly available sources to assess the creditworthiness of correspondent banks. They wanted to streamline their processes by obtaining credit ratings/research and fundamental data from one provider via an easy-to-use platform that would enable them to:

• Monitor breaking news related to correspondent banks and any changes that may take place with credit ratings.
• Capture early warning signals of credit deterioration, such as movements in equity prices and credit default swaps.
• Understand the credit landscape at a sovereign, entity and industry level.
• Benchmark peers to assess important metrics, such as capital adequacy, asset quality, liquidity and profitability.
• Access additional data on ownership, business descriptions and in-depth financials to round out the analysis.

The agency was already a client of S&P Global Market Intelligence ("Market Intelligence") and reached out to the firm to discuss additional capabilities.

The Solution

Market Intelligence specialists first discussed RatingsDirect^®, the official source for S&P Global Ratings credit ratings and research. RatingsDirect^® is available on the S&P Capital IQ Pro desktop, an intuitive platform loaded with an unrivaled breadth and depth of data, tech-forward productivity tools, news and research. The combination of RatingsDirect and other information on the platform would equip the risk and economics team to:

	Access extensive current and historical credit ratings	RatingsDirect® combines essential credit ratings and research with comprehensive market data, credit risk indicators and dynamic visualization tools, all via the S&P Capital IQ Pro platform.
	Dig deep on the creditworthiness of banks	S&P Capital IQ Pro lets users do in depth analysis of banks criteria at both industry and country level.
	Assess financials for both public and private companies	Premium Financials provides standardized data for 5,000+ financial, supplemental and industry-specific data items for 150,000+ companies globally. Private Company Data covers 50+ million company profiles.
	Round out the story with secondary information	Ownership Data provides detailed historical equity ownership data on 90,000+ public and private companies, institutional investment firms, mutual funds and insider/individual owners. Key Developments provides information on 1+ million developments, based on 160+ standardized topics.

Key Benefits

Members of the risk and economics team knew this valuable information would enable them to thoroughly conduct end-to-end due diligence on different banks and deals, helping to guide their decision-making and protect their assets from unwanted negative events. They subscribed to the offering and are benefiting from being able to:

• Increase efficiencies and reduce manual errors with a single source of information and extensive workflow productivity tools.
• Access comprehensive multinational and intra-country analysis - from large banks and their subsidiaries to non-listed banks to central and development banks.
• Monitor changes in equity prices and Credit Default Swap's for early signs of credit deterioration.
• Rely on trusted data given Market Intelligence’s three-tiered data approval process that includes 15,000 automated error checks, plus manual inspection.

Read the full case study here

Learn more about RatingsDirect^® here and Capital IQ Pro here.