Credit and risk management
When considering a loan, first we look at the “5 Cs” of the borrower.
| Capacity | Whether they have the ability to repay the loan. |
| Character | Whether they are willing to repay the loan and if they have a track record to prove it. |
| Conditions | The stability of the industry in which they operate. |
| Capital | How much capital they can provide themselves. |
| Collateral | What security they can offer for the loan. |
UDC uses credit risk rating tools as an integral part of the credit assessment process. These tools use sophisticated statistical techniques to help determine credit worthiness and are designed to comply with the rigorous standards prescribed under the Basel II banking accords. UDC is committed to meeting the world’s highest standards of risk management, as outlined in the Basel Convention, and is the only New Zealand finance company to have achieved Basel II accreditation.
UDC has sound risk management policies and procedures which are consistent with applicable ANZ National Bank policies. UDC has a Risk Committee which monitors and manages UDC’s exposure to operational risk such as reviewing the performance of the industries that make up UDC’s diverse lending portfolio.
UDC also closely monitors and forecast its liquidity risk and has a committed $800 million facility available from ANZ National Bank Limited.