Fortæl mig hvem du omgås, og jeg skal fortælle dig om din risiko - en analyse af de danske bankers risikoprofil: MBA Afhandling af Christian Vejling og Magnus Emil Poulsen - Vejleder Lars Krull

Christian Vejling, Magnus Emil Poulsen, Lars Krull (Principal supervisor)

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Banks are affected by many different risks - we would in our thesis elucidate these risks and see if there are any new approaches of analysis that can be used to get even closer to the risks individual banks assume from a given strategic approach to the bank's market area. On this basis, we set the following problem statement:
Can we infer anything about a bank's risk from the companies it associates? And if so, what?
The thesis consists of a strategic description of the Danish banking market. In our analysis we found empirical data which helped to answer the problem formulation. Our analysis has been reinforced with an additional perspective that gives us a more in-depth view of selected banks.
PESTEL and leverage analysis Based on our PESTEL and leverage analysis, and on the basis of what has happened in the banking sector since the preparation of our analysis in April 2013, we were able, by looking at the customers who state which bank they use, to infer the following perspectives, about the level of pressure on the sector´s business model:
 Banks have in recent years been faced with many costly conditions and this trend looks set to continue. Implementation of the CRD IV / Basel III will furthermore have significant capital implications going forward.
 These costs are incurred simultaneously with a decline in lending in the sector that influence the banks’ earnings, which is thus declining / stagnant.
 Several of the banks, which according to our analysis face challenges, have in practice been challenged in the past seven months.
 As can be seen from the description of the various challenged banks, several of them suffered significant write-downs after a visit from the Danish FSA, which reinforces our conclusion.

Other perspectives
To answer our next question "And if so, what can we infer about the bank's risk?", we chose the banks that have the most highly leveraged clients. We supplemented our leverage analysis with a calculation of banks' Coverage Ratio, which thus gave us an additional perspective on how individual banks perceive their troubled customers. This analysis gave us the basis for the selection of three banks that we analysed thoroughly, giving us a broader and deeper view
of these particular banks' risk. Upon closer examination of these three banks, we could infer some common characteristics and risks:
 They tend to take more risks when they go outside their primary market area
 Their funding and employee expenses are above the level of the 6 largest banks in Denmark
 In two cases the Danish FSA found that the banks had misinterpreted the rules for registering OIV and had the procedure for impairments of loans wrong
 2 out of 3 banks have registered OIV selections of their loan volume below the
average of comparable banks OIV markings
Based on the analyses, we have concluded that it is possible to infer something about the banks' risk, by looking at the customers they deal with. A thorough analysis of three selected banks´ gives us a further insight into the individual banks' risk given from the customers who they associate with.
Original languageDanish
Number of pages166
Publication statusPublished - 9 Dec 2013

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