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Excel spreadsheet for instructors, for use with 8B11E013.

Excel spreadsheet for students, for use with 9B11E013.

The chief credit officer (CCO) at Seoul National Bank has recently faced numerous defaults on its corporate loans. To address this problem, the CCO must re-evaluate how the bank responds to defaults and determine a default strategy. The CCO must evaluate the payouts and risk profiles of 1) collecting on collateral, 2) partially settling, and 3) waiting and seeing. Further, the CCO must determine a systematic way to approve loans from companies. Analyzing both qualitative and quantities factors, the CCO must determine which companies to approve for loans given a certain size of its loan portfolio. Also, the CCO must determine whether or not to increase or shrink the size of the bank’s loan portfolio based on the expected outcomes and/or simulated results.