Sample interview questions: How do you handle situations where borrowers request loan restructurings?
Sample answer:
Approaching Loan Restructuring Requests
1. Assess the Situation Thoroughly:
- Review the borrower’s financial performance, underlying business fundamentals, and creditworthiness.
- Understand the borrower’s reasons for requesting the restructuring and assess their likelihood of meeting revised repayment terms.
2. Conduct a Comprehensive Analysis:
- Analyze the impact of the restructuring on the bank’s credit risk profile and overall loan portfolio.
- Consider the potential impact on other stakeholders, such as co-lenders, guarantors, and investors.
3. Explore Alternative Options:
- Consider alternative solutions that may be more favorable to both the borrower and the bank, such as payment deferrals, temporary interest rate reductions, or covenant adjustments.
- Explore the possibility of seeking external credit support or debt restructuring through third parties.
4. Negotiate and Structure the Restructuring:
- Develop a restructuring plan that balances… Read full answer
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