Credit analysis is a comprehensive analysis of the overall performance of the client and the specific project to be financed with the loan, in order to assess the credit risk, i.e. to assess the creditworthiness of the loan applicant.
The credit analysis is part of the credit process, in which the bank should conduct a comprehensive analysis of the operation of the enterprise and the justification of the project to be financed by the loan.
In addition, the processing of the loan application involves numerous qualitative and quantitative aspects. The first relate to the previous work of the borrower, his legal status, management, loan security, competition, etc.
The quantitative analysis includes analysis of the financial statements of the company, as well as analysis of certain financial indicators.
The ultimate objective of the credit analysis for the bank is to assess the credit risk, i.e. the creditworthiness of the loan applicant. In order to carry out the qualitative analysis, banks have at their disposal several methods, such as CAMPARI, PEST, SWOT, etc
