Commercial Real Estate Portfolio Management Guide

September 29 2020 18:00 - 19:00 UTC

Effective management of the loan portfolio is fundamental to a bank’s safety and soundness. Commercial real estate loan portfolio management (CRELPM) is the process by which risks that are inherent in the credit process are identified, managed and controlled. LPM involves the steps the Portfolio Manager takes to identify and control risk throughout the portfolio. The assessment focuses on what the PM does to identify issues before they become problems and actions that maintain the portfolio quality.

Management of the loan portfolio’s credit risk requires PMs to understand and control the portfolio risk profile. To accomplish this, PMs must have a thorough knowledge of the portfolio’s composition and its inherent risks. They must understand the portfolio’s product mix, industry and geographic concentrations, average risk ratings, and other aggregate characteristics. PMs must take active steps to make sure that the policies, processes, and practices implemented to control the risks of individual loans and portfolio segments achieve loan portfolio quality objectives.

Loan portfolio management considerations:

  1. The importance of loan portfolio classification systems.
  2. Loan review and identifying early warning signs.
  3. Identify common portfolio, documentation and loan deficiencies.
  4. Identify collateral and operating problems and proactive measures.
  5. The importance of a good, sound appraisal process.
  6. When to restructure – borrower/business.
  7. When to demand, accelerate and/or foreclose.
  8. Possible forbearance options.
  9. Loan problem and bankruptcy indicators.
  10. Lender/borrower communications tips.
  11. Summary
  12. Questions

CPE Information:
• Prerequisites: N/A • Advanced Preparations: N/A
• Course Level: Basic • Group Internet Based Training

CBANC Network is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.NASBARegistry.org.

  • Loans
  • Credit
    • Risk
RESOURCES
  • CRE portfolio Mgmt Guide-9-30.pdf
    Attendees Only
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