Standard & Poor’s collaborates with the Saudi Arabian credit information bureau Simah to establish credit data consortium.
The initiative is directed to enhance the industry’s risk management standards. Participating member banks will provide information on their mid-market and large corporate defaults, both historically and on an ongoing basis. This information will follow criteria established by Standard & Poor’s Risk Solutions and will be held on Simah’s secure database in Riyadh.
In addition, information on a significant sample of performing commercial loans will be assembled, enabling S&P to develop a probability of default model for Saudi corporate debt, as well as provide industry-wide statistics on historic recovery and default trends in the Kingdom.
“There is a scarcity of data in some commercial lending asset classes in KSA and in many other countries, as historically defaults have been rare.” says Bernard O’Sullivan, MD, head, risk solutions, Emea, S&P. “This has been a significant challenge to overcome for many banks. The data consortium initiative will address this by rapidly building a robust dataset reflecting the underlying factors that drive credit risk.”
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