We have talked about: the creation of the vision for our loan portfolios (current state versus future state) – e.g. the strategy for moving our current portfolio to the future vision. Now comes the time for execution of that strategy.
In changing portfolio composition and improving credit quality, the discipline of credit must be strong (this includes in the arenas of commercial loan origination, loan portfolio monitoring, and credit risk modeling of course). Consistency, especially, in the application of policy is key. Early on in the change/execution process there will be strong pressure to revert back to the old ways and stay in a familiar comfort zone. Credit criteria/underwriting guidelines will have indeed changed in the strategy execution.
In the coming blogs we will be discussing:
- assessment of the current state in your loan portfolio;
- development of the specific strategy to effect change in the portfolio from a credit quality perspective and composition;
- business development efforts to affect change in the portfolio composition; and
- policy changes to support the strategy/vision.
