As agreed, some days later the executive committee met again on the Bank Headquarters.
The president talked to them.
“Dear colleagues, I know you’ve worked very hard on analyzing the situation. I’d like to hear your proposals now”.
The Sales VP showed a graphic. As you can see the number of quotations refused by the credit risk department has risen 20% on the last year, this is not reasonable, it’s impossible make business under this circumstances.
Listening carefully, and after letting him finish, the Risks VP explained. At this moment the unemployment is rising dramatically, that’s affecting the risk of new loans, but also actual loans sold on the previous years. Our Risk Weighted Assets have risen significantly, and that’s pushing our Capital Adequacy Ratios. Additionally is being harder and harder to get liquidity using those assets as collateral. Fortunately the Central Bank is covering our liquidity requirements but…
The Sales VP answered, I think it’s not the right time for discussing about technicalities, the diagnostic is more clear than that, without sales there’s no profit. We need to increase our sales and get rid of the toxic assets. Aren’t you saying that the market does not want those assets? Let’s get rid of them.
The Risk VP tried to reply but a he stopped when he saw the President looking at him directly.
The President said, as executives we must define priorities; those new provisions are going to be real losses on the next quarter, the Central Bank is covering all the liquidity requirements. And finally we must be optimistic and believe that the economy will recover and our clients will get new jobs. By reducing credit we’re also getting bad reputation. Those Capital Ratios are important, of course, but the priorities are clear.
What will be the final decision? We’ll talk about it on the oncoming weeks.
Looking forward to read your opinions.
Kindest Regards.
Ferran.
The president talked to them.
“Dear colleagues, I know you’ve worked very hard on analyzing the situation. I’d like to hear your proposals now”.
The Sales VP showed a graphic. As you can see the number of quotations refused by the credit risk department has risen 20% on the last year, this is not reasonable, it’s impossible make business under this circumstances.
Listening carefully, and after letting him finish, the Risks VP explained. At this moment the unemployment is rising dramatically, that’s affecting the risk of new loans, but also actual loans sold on the previous years. Our Risk Weighted Assets have risen significantly, and that’s pushing our Capital Adequacy Ratios. Additionally is being harder and harder to get liquidity using those assets as collateral. Fortunately the Central Bank is covering our liquidity requirements but…
The Sales VP answered, I think it’s not the right time for discussing about technicalities, the diagnostic is more clear than that, without sales there’s no profit. We need to increase our sales and get rid of the toxic assets. Aren’t you saying that the market does not want those assets? Let’s get rid of them.
The Risk VP tried to reply but a he stopped when he saw the President looking at him directly.
The President said, as executives we must define priorities; those new provisions are going to be real losses on the next quarter, the Central Bank is covering all the liquidity requirements. And finally we must be optimistic and believe that the economy will recover and our clients will get new jobs. By reducing credit we’re also getting bad reputation. Those Capital Ratios are important, of course, but the priorities are clear.
What will be the final decision? We’ll talk about it on the oncoming weeks.
Looking forward to read your opinions.
Kindest Regards.
Ferran.
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