| Abstract | Poor asset qualtiy, attributable to over-concentration, specialisation and poor risk selection, remains the main cause of problems in banks. In maintaining sound credit controls, a clear credit philosophy, and ongoing management of the loan portfolio with a view to identifying early warning signs of deteriorating asset quality, are also helpful. Whilst local institutions are well capitalised, they should ensure that the increasingly competitive environment does not tempt them to sacrifice their credit standards or pricing as a means of winning new business. |
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