Uncovering Potential Risks in a Regional Bank’s SME Loan Portfolio

Assessing the credit risk of small- and medium-sized enterprises (SMEs) can be one of the most challenging tasks for a bank, especially when there is a lack of available financial information. The need for robust methods to evaluate potential exposure with SMEs became even more important during the uncertain period caused by the COVID-19 pandemic, with many of these firms being harder hit than larger entities.

This U.S. regional bank was focused on inorganic growth and had acquired a number of loan portfolios as part of recent M&A transactions, with many of the borrowing entities being SMEs. The portfolio management team within the corporate banking division was charged with assessing their creditworthiness and pinpointing any potential problems. Access our complete case study to see how we helped this firm meet their goals.