A Large Multilateral Development Bank Turns to S&P Global for Multilingual Credit Assessments of Borrowers

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Case Study
6 Nov, 2023

Multilateral development banks (MDBs) provide financing to support economic advancement in developing countries. A portfolio of projects often worth billions of dollars throughout the world requires high-quality credit risk assessments to avoid unwanted risk exposure.

About
- The credit risk management division at this large MDB is responsible for evaluating credit risk and creating internal ratings for a large portfolio of loans to public sector, corporate, and financial institutions.
Challenge
- Members of the credit risk team were receiving many time-sensitive requests and were struggling with their workloads during peak times. In addition, they received financial information in multiple languages and formats, which slowed down the assessment process. Seven years ago, they heard about S&P Global’s support services for multilingual credit projects and decided to leverage the firm’s credit risk expertise. They have been working with S&P Global in this area ever since.
Solution
- Credit specialists from S&P Global Market Intelligence (“Market Intelligence”) have executed approximately 1,800 annual reviews to date, processing filings in over 15 languages. The specialists have:
  - Used Market Intelligence’s proprietary Scorecards to create risk scores that consider numerous factors, including climate-related risks.
  - Conducted peer group analysis to look at relative performance against other MDBs.
  - Created credit memos that discuss a borrower’s operational and financial strengths, risks, and mitigants as well as provided credit opinion on their outlook.
  The MDB has complete ownership of memos, models, preliminary risk scores, and climate risk Scorecards.
Outcome
- The development of a standardised credit risk assessment approach has resulted in significant bandwidth release for the onshore team at the MDB to focus on strategic decision making in line with the bank’s mission. Furthermore, the ability to provide multilingual capabilities has improved turnaround times and lowered overall cost of credit reviews. Finally, proactive communication and meeting agreed upon deadlines with high-quality analytical support has helped the MDB teams build deeper relationship with their customers, resulting in the MDB expanding the scope of the engagement to cover different geographies over time.

A Large Multilateral Development Bank Turns to S&P Global for Multilingual Credit Assessments of Borrowers

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