Credit Risk Management in Bank Lending

The main objective of this thesis is to describe the decision-making process of the credit risk management department in a bank, using the established processes of a specific financial institution as an example. The first part of the thesis is theoretical and focuses on the types of risks in banking, the definition of credit risk, its quantification, and, finally, its measurement. The second – practical – part examines the issue of credit risk management in a private bank. It outlines the forms of financing offered to clients and presents the organizational structure of risk management within the bank. Furthermore, it analyzes the bank’s strategic direction and its approach to risk management. It identifies and classifies sources of credit risk based on client types. The final section focuses on the process of risk quantification during the approval of new loans and introduces tools and procedures aimed at minimizing these risks. The results of the thesis provide a comprehensive view of the mechanisms and strategies for effective credit risk management in the context of private banking.