Service Group in Mexico
Credit Risk is defined as the risk to earnings or capital arising from an obligor´s failure to meet the terms of any contract with the lender or otherwise fail to perform as agreed.
Credit Risk Management is performed by an independent Credit Risk Area in conjunction with Risk Management Unit.
The main responsibilities of the Credit Risk Management are:
- Evaluate the ability of the clients of JP Morgan Mexico to generate sufficient funds through their commercial activities and conversion of their assets in order to settle their financial and operational obligations on their due dates as previously agreed;
- Assign risk ratings for each borrower and transaction consistent with the financial and economic situation of the clients and the availability and liquidity of the guarantees where applicable;
- Approve independently all credit limits granted to their customers, as well as monitoring and managing their use in an active and frequent manner;
- Monitor, evaluate and manage the credit portfolio from the point of view of possible concentrations on clients, ratings, industries, regions or products, ensuring a balanced distribution of risks; and
- Participate in discussions and assignments of provisions and capital reserves appropriate to the level of exposure and portfolio.
As part of the risk governance structure, Risk Committee is responsible to assure appropriate management of aggregated credit, market, operational or any other risks, as well as for decisions related to risk strategy or policy.