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Credit portfolio management

To confidently steer portfolios to profitability, risk managers need to have a comprehensive view of risks, opportunities, and emerging threats.

Moody’s credit portfolio management solution combines risk analytics with portfolio steering tools to help banks analyse and act on current and emerging risks within credit portfolios.

Our solution is designed for all asset classes and helps you:

  • Quantify losses under scenarios

  • Identify pockets of concentrations and risk

  • Plan and allocate capital

  • Set credit limits and risk appetite

  • Forecast stress scenarios 
     

  • Steer portfolio
     

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How can we help?

We equip banks, insurers, and asset managers with the insights and tools they need to confidently manage credit portfolios. Here’s how we can help:

01
Analyse risk, act on opportunity

Pinpoint short-, medium-, and long-term risks posing a threat to your portfolio. Test and implement lending and hedging strategies by segment, name, and product mix.

02
Steer toward the target portfolio

Build a risk infrastructure by leveraging applications such as what-if analysis, concentration risk analysis, multi-period scenario analysis, stress testing, limit setting, risk-based pricing, and more.

03
Streamline risk reporting

Refine your Internal Capital Adequacy Assessment Process (ICAAP) practices or navigate IFRS 9 and CECL with more confidence. Facilitate comprehensive internal committee reviews including sector, geography, and more.

04
Monitor portfolio and receive early warnings

Anticipate risks with early warning indicators and portfolio monitoring tools so you can stay ahead of challenges and rebalance risk.

05
Gain insights from our experts

When you need an extra level of insight, our credit portfolio management experts can provide a tailored response, which can help you make better credit decisions.

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Schedule a demo

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Analyse, act, communicate on credit portfolio risks

credit portfolio management flow
Testimonial

"We chose this cloud-based solution in a bid to achieve higher efficiency and we are expecting shorter processing times as a result. Other considerations included the ability to model credit risk limits within the tool, which enhances confidence, and the improved visuals that provide peace of mind by enabling better analysis of outputs."

- Head of Quantitative Analytics and Liquidity Risk Management
Momentum Metropolitan

Capabilities

01 Analyse

Analyse

Moody's credit portfolio management solution enables comprehensive portfolio risk analysis, covering concentration, asset correlations, credit risk, climate risk, scenarios, and more. 
 

Credit risk and concentration analysis

  • Measure and benchmark portfolio-level credit risks and returns across the entire portfolio

  • Model and assess the impact of credit risk factors, such as pricing models, risk concentrations, correlations, hedging, and stress tests, across portfolios

  • Estimate asset correlations for publicly traded firms, private firms, retail borrowers, commercial real estate, emerging markets, and more

  • Anticipate risks with early warning indicators and real-time portfolio monitoring tools

Read case study

Climate risk and scenario analysis

Our solution brings together advanced modeling, real-world data (both transitional and physical), and extensive coverage of key asset classes to help banks:

  • Perform climate scenario analysis across their portfolios

  • Test climate impact on asset values and alignment to climate objectives

  • Conduct climate stress testing

  • Quantify climate impacts on capital and earnings

Read article
Download climate scenario analysis brochure
02 Act

Act

Take targeted portfolio management actions with confidence and steer your portfolio in the right direction.
 

Portfolio steering and resilience building 

  • Define target portfolios in terms of product, customer, and segment mix.

  • Analyze the risk/return balance and perform risk transfers to optimize balance sheets.

  • Review credit risk appetite and set limits and targets accordingly.

  • Test portfolio performance under various stress scenarios.

  • Stress test portfolio resiliency and perform what-if analyses across all asset classes.

Read case study

Final Basel RWA optimization 

  • Optimize your path to profitability under capital constraints: turn RWA calculation results into a portfolio risk/reward optimization strategy.

  • Connect portfolio management to lending and balance sheet management workflows for a seamless execution of your capital deployment strategy. 

Read whitepaper

Managing RBC and ICS capital volatility 

  • Stay ahead of the curve and manage the level of RBC or ICS capital more efficiently over time.

  • Identify potential upgrades and downgrades in your portfolio and set risk appetite.  
     

  • Analyze new investment strategies and evaluate the impact of RBC/ICS capital on new investment opportunities.

03 Communicate

Communicate

Our solution also ensures regulatory compliance and facilitates internal committee reviews through board-level reporting tools.
 

Regulatory compliance 

  • For banks aiming to refine their ICAAP, our solution can help enhance its utility. By facilitating its integration into strategic decision-making, banks can transform this regulatory requirement into a driver of business value.

  • For institutions navigating the IFRS9 and CECL model, our solution provides sophisticated tools for financial forecasting. This enables a more accurate assessment of credit impairment risks, empowering banks to allocate their limited capital with greater confidence.

Risk and sector committee reviews

  • Articulate portfolio management strategies and analysis to stakeholders with detailed reporting.

  • Present historical trends, future direction, and recommendations to facilitate internal reviews such as risk committee review, sector committee review, and more.

Analyse

Moody's credit portfolio management solution enables comprehensive portfolio risk analysis, covering concentration, asset correlations, credit risk, climate risk, scenarios, and more. 
 

Credit risk and concentration analysis

  • Measure and benchmark portfolio-level credit risks and returns across the entire portfolio

  • Model and assess the impact of credit risk factors, such as pricing models, risk concentrations, correlations, hedging, and stress tests, across portfolios

  • Estimate asset correlations for publicly traded firms, private firms, retail borrowers, commercial real estate, emerging markets, and more

  • Anticipate risks with early warning indicators and real-time portfolio monitoring tools

Read case study

Climate risk and scenario analysis

Our solution brings together advanced modeling, real-world data (both transitional and physical), and extensive coverage of key asset classes to help banks:

  • Perform climate scenario analysis across their portfolios

  • Test climate impact on asset values and alignment to climate objectives

  • Conduct climate stress testing

  • Quantify climate impacts on capital and earnings

Read article
Download climate scenario analysis brochure

Act

Take targeted portfolio management actions with confidence and steer your portfolio in the right direction.
 

Portfolio steering and resilience building 

  • Define target portfolios in terms of product, customer, and segment mix.

  • Analyze the risk/return balance and perform risk transfers to optimize balance sheets.

  • Review credit risk appetite and set limits and targets accordingly.

  • Test portfolio performance under various stress scenarios.

  • Stress test portfolio resiliency and perform what-if analyses across all asset classes.

Read case study

Final Basel RWA optimization 

  • Optimize your path to profitability under capital constraints: turn RWA calculation results into a portfolio risk/reward optimization strategy.

  • Connect portfolio management to lending and balance sheet management workflows for a seamless execution of your capital deployment strategy. 

Read whitepaper

Managing RBC and ICS capital volatility 

  • Stay ahead of the curve and manage the level of RBC or ICS capital more efficiently over time.

  • Identify potential upgrades and downgrades in your portfolio and set risk appetite.  
     

  • Analyze new investment strategies and evaluate the impact of RBC/ICS capital on new investment opportunities.

Communicate

Our solution also ensures regulatory compliance and facilitates internal committee reviews through board-level reporting tools.
 

Regulatory compliance 

  • For banks aiming to refine their ICAAP, our solution can help enhance its utility. By facilitating its integration into strategic decision-making, banks can transform this regulatory requirement into a driver of business value.

  • For institutions navigating the IFRS9 and CECL model, our solution provides sophisticated tools for financial forecasting. This enables a more accurate assessment of credit impairment risks, empowering banks to allocate their limited capital with greater confidence.

Risk and sector committee reviews

  • Articulate portfolio management strategies and analysis to stakeholders with detailed reporting.

  • Present historical trends, future direction, and recommendations to facilitate internal reviews such as risk committee review, sector committee review, and more.

Concentration risk in credit portfolios

Regulators worldwide emphasize the importance of banks explicitly measuring, monitoring, and managing their credit risk concentrations, particularly in relation to capital adequacy under Pillar 2.

In this case study, you will learn how our credit portfolio management solution helps institutions quantify the impact of concentration risk.

Learn more
portfolio management
credit portfolio management screen

Early warning systems and scenario analysis

At Moody's, we integrate "first line of defense" functionalities into a complete credit portfolio management solution, enhancing risk assessment and enabling banks to develop effective mitigation strategies.

Discover more in our whitepaper
portfolio management

Case studies

case study
Client spotlight: Momentum Metropolitan

Momentum Metropolitan Holdings (MMH) is a South-African based financial services group with a market capitalization of $1.47 billion. The group remains one of the largest insurers and integrated financial services company in South Africa. 

Learn more
case study
How to leverage concentration analysis to identify opportunities

Highly granular multi-factor modeling helps ensure optimal allocation of current and future funding.

Learn more
case study
Basel IV and the butterfly effect: a lesson in unintended consequences

In this whitepaper, we interpret Basel IV through its historical context, suggest best practices and analyse consequences on stability of the financial system.

Learn more

News and views

article
Moody's
Moody’s supports OSFI’s Standardized Climate Scenario Exercise (SCSE)

Climate risk quantification is a fast-developing field. Financial institutions and regulators in many jurisdictions are trying to better understand their exposure to climate risks through climate scenario analysis.

Read more
article
Moody's
Lessons learned in climate scenario analysis by the Federal Reserve: a pathway to robust modeling of climate risk in credit portfolios

In order to understand and enhance climate risk management practices in banks, the FRB arranged an exploratory climate scenario analysis (CSA) exercise for the loan portfolios of six of the largest US banks.

Read more
article
Moody's
ECB is conducting first cyber risk stress test for banks

As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

Read more
article
Moody's
Unleashing the power of risk assessment

Moody’s continues to lead the way, earning the number one overall ranking in the Chartis RiskTech100® 2024 annual report for the second consecutive year.

Read more
whitepaper
Moody's
Private debt: How much is too much in a credit portfolio?

This case study analyses the credit risk of a sample portfolio of corporate bonds and private debt holdings.

Learn more

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Interested in learning more about our offerings? Our solutions specialists are ready to help.