Banking and COVID-19: The Impact on Credit Loss Modelling
One of the financial services sectors that has been most affected by the Covid-19 pandemic is the lending industry. Banks and other credit providers have had to re-evaluate almost every aspect of their credit risk management processes. This includes credit limit and risk appetite setting; the definition of default and modelling; reporting and financial disclosures; and the governance and control environment.
Our presentation will start with a recap of the impact Covid-19 had on the banking industry. This will include the Covid-19 relief measures and an analysis of some of the financial results disclosed by South African banks for the December 2020 and June 2021 reporting periods.
We will then explain some of the modelling challenges banks faced and the approaches they took to deal with the impact of the pandemic in the short term.
Lastly, we will provide insights into future modelling enhancements that banks and other credit providers can consider to future-proof their models and enhance their credit risk management processes.
Outcomes that attendees can look forward to benefitting from include:
- An understanding of how Covid-19 has affected the lending industry in South Africa.
- Knowledge of the government relief measures that were introduced and the associated impact on credit extension, modelling and reporting.
- Awareness of the ongoing challenges faced by banks and credit providers in addressing the impact of Covid-19 on credit risk management.
- An understanding of the financial impact of the pandemic on South African banks over the period December 2019 to June 2021.
- Awareness of future modelling enhancements that banks can consider to cater for the challenges faced.