Credit Risk Management in Ibercaja
Credit Risk Management in Ibercaja

Author(s): Ana Solchaga
Subject(s): Business Economy / Management, Financial Markets, Accounting - Business Administration
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Ibercaja Banco; credit risk; management
Summary/Abstract: This study provides a comprehensive analysis of the credit risk management framework of Ibercaja Banco, a medium-sized Spanish bank known for its conservative risk culture and high asset-quality metrics. The research explores the fundamental concepts and categories of credit risk, along with the regulatory architecture shaped by Basel III/IV and its implementation in the European Union through the CRR and CRD IV. It also examines the supervisory role of both the European Central Bank (ECB) and the Bank of Spain within the Single Supervisory Mechanism. Particular attention is given to Ibercaja’s internal governance structure—anchored in its Risk Appetite Framework (RAF) and the three-lines-of-defense model—and to its prudent lending standards, characterized by strict admission criteria, conservative LTV limits, and concentration controls. The study further assesses Ibercaja’s credit risk measurement practices, including the use of PD, LGD, and EAD parameters, and evaluates its main mitigation strategies such as collateralization, guarantees, and portfolio diversification. Monitoring and early-warning systems, stress testing, and IFRS 9 provisioning models are presented as key tools supporting risk identification and resilience. Performance indicators—including a 1.7% NPL ratio, 0.4% cost of risk, and 65% coverage ratio—highlight the bank’s consistently strong credit profile relative to the Spanish banking sector. Overall, the findings show that Ibercaja’s solid governance, disciplined underwriting, and forward-looking risk management have enabled the institution to sustain a robust solvency position and maintain stability under an increasingly demanding regulatory environment.

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