A Large Bank Deepens and Automates its Analysis of Correspondent Relationships

The global banking sector is clawing its way back to normalcy. Rebounding economies, vaccinations, and state measures are likely to help banks bounce back much more quickly than was conceivable in the dark days of 2020. For 11 of the top 20 banking jurisdictions, S&P Global Ratings estimates a return to pre-COVID-19 levels of financial strength won't occur until 2023 or beyond. For the other nine, recovery may occur by year-end 2022.

This large commercial bank in MEA provides correspondent banking services within the region and around the world. The organization’s FI RMs work closely with the CPM and group credit teams to identify potential business opportunities, thoroughly vet candidates, and ultimately give the go-ahead to proceed with lending arrangements. Given market volatility and the volume of activity, the teams needed access to more comprehensive data and an automated approach to support their counterparty assessments and protect the bank from risks.

Pain Points

The bank’s correspondent portfolio was very large, making it difficult to easily evaluate and monitor FIs across the globe. Numerous languages, currencies, sources, and incompatible standards had to be addressed. In many cases, this resulted in manual data entry, which was in complete contrast to the bank’s digital transformation efforts on other internal and external fronts. The teams wanted to find a single source of reliable data and advanced tools to support their daily workflows. In particular, they wanted to:

• Monitor their portfolio for adverse news, changes in credit ratings, and early warning signals, such as movements in equity prices and credit default swaps (CDSs).
• Gain access to deep and rich credit views to support industry and counterparty analysis.
• Profile the banking industry in countries of interest.
• Gain ready access to FI financial statements, ratios, and ownership data.
• Quickly compare capital ratios, asset quality, liquidity, and profitability for banks on any continent.
• Utilize the latest automation tools.

The teams contacted S&P Global Market Intelligence (“Market Intelligence”) to learn more about the company’s FI offering.

The Solution

Market Intelligence provides a single online source for reliable data on worldwide banks in standard formats via S&P Capital IQ Pro – a one-stop solution offering unrivaled data, tech-forward productivity tools, news, and research. Pre-built templates and instant currency conversion automate individual bank evaluations and apples-to-apples peer comparisons. Users can access financial statements and ratios, plus press releases available within hours of publication. In addition, click-through functionality enables users to review detailed footnotes for most line items. The solution would enable: (1) the FI RMs to undertake a preliminary analysis of a bank before starting serious discussions, (2) the CMP team to dig deep on the creditworthiness of an FI, and (3) the group credit team to feel confident when agreeing to proceed with a business arrangement.