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One of the most important reasons could be to improve the loan portfolio quality. So a risk manager can improve a company loan portfolio quality. A risk manager or credit analyst that can screen a potential borrower more effectively can be sure that only those ones that have a real potential are going to be taken to the committee. This can reduce the risk of having non-performing loans and can help to avoid the time-consuming process to call the committee and prepare everything for the report, when you can already see from a first look that the company’s financial health is not good, is not strong.

Secondly, I would say that good corporate credit analysis can maybe help a compliance team to ensure that the bank keeps enough capital reserve. So, this will help the bank follow the regulation in the right way and this can reduce the risk of legal or financial issues.

Thirdly, I would say growth opportunity. I actually heard this in one of the calls I made a couple of weeks ago with a client. He explicitly said that he would have wanted to enhance his people’s achievements so that they could get some new growth opportunities. So, in this case if a relationship manager could analyze a high potential new client which works in a new emerging sector this could help the bank expand their client base and capture a new market sector.

Lastly, a good corporate credit analysis can help a treasury analyst for example to better price the loans more accurately by understanding better the risk profile of the borrower and the whole market condition. So, this can ensure that the bank is adequately compensated for the risk that it is undertaking.