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Posted at: Nov 27, 2019, 9:05 AM; last updated: Nov 27, 2019, 9:05 AM (IST)CAREER COMPASS: CREDIT ANALYST

Encash your business acumen

Amit Goyal

A credit analyst mainly focuses on analysing the financial data of the customer, companies that are applying for credit or loans to determine the risk that the bank, or other lending or credit-granting institution will not recoup funds loaned. 

Work profile

Generally credit analysts are accountable for assessing the application of the loan applicants using a range of criteria, including the purpose of the application, credit viability, and customer payment history and customer creditworthiness. Credit analyst plays the role of a major decision maker of customer credit. They deal with computer programmes to maintain the history of customer credit and keep financial records up-to-date. The analyst is important for the health of economy, without the recommendation of  credit analysts the banks, insurers and companies won’t be able to extend the loan for business, home, cars and, occasionally, employees payrolls as well. 

Profile

The job as the Commercial credit analyst mostly refers to as risk analyst. They work with banks and other lenders to determine the ability of businesses to repay loans and other debts. Credit Analysts have the responsibility of evaluating the credit worthiness of a business and determine the line of credit. 

Commercial credit analysts are usually employed by government authorised agencies, banks and commercial lenders. 

Qualification

A credit analyst requires the bachelor’s degree in finance, accounting or another related field like ratio analysis, statistics, economics, calculus, and financial statement analysis and risk assessment. 

These subjects are necessary to function as a credit analyst because they aid in risk assessment. 

Knowledge of subjects like industry and ratio analysis is also necessary because part of assessing the risk for a company includes assessing its environment. Candidates also do the post graduate diploma in banking and finance for the professional and practical knowledge of these sectors.

Required skills

Credit analyst must be able to handle the very high level of responsibilities in their job.

  • A credit analyst has to be able to look at or create a set of numbers and be able to know what they mean for each particular client.
  • A credit analyst must be able to effectively disseminate decisions to a variety of people, either orally or in print. Coming up with a solution to a problem is of little use if you cannot effectively communicate it to others.
  • A credit analyst must have the ability of multitasking he needs to be able to handle different projects at the same and prioritize projects effectively because the organization might be assigned him for multiple projects at the same time.
  • The credit analyst should have the basic knowledge of software usages like Microsoft Excel and other software to analyze numerical data.
  • He/she must have fluency in English and strong oral and written communication skill and must have the sharp sense of ethics and analytical and organizational skills.

Remuneration

The annual salary for credit analysts ranges between Rs 5 lakh to Rs 8 lakh and depends on the level of experience, type of industry, and geographic location.

Credit analysts can work in a variety of fields and locales. Many works for lending institutions like banks or insurance companies. Additionally, there is great demand in investment, working for an asset manager or private equity firm as a bond analyst or for rating agencies like Moody's or Standard &Poors, determining the riskiness of investing in a company or country. 

Career progression

Credit analysts start their career as junior analytics after getting a degree in accounting, finance or another related business field. In some firms, senior analysts oversee a team handling analysis for a particular market, region or industry. 

Top-performing analysts can rise to occupy financial management positions overseeing analytical departments, making final credit decisions and monitoring departmental performance.

— The writer is Professor of TKWs Institute of Banking and Finance

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