Standard Bank Launches Credit Risk Project

The Standard Bank Group , based in South Africa, is using the Adaptiv Credit Risk solution from SunGard Trading and Risk Systems (Stars) to build a common platform for credit risk processing for all its wholesale corporate and investment banking activities. Using SunGard’s South African hosting center, it will roll out the solution on an application service provider (ASP) basis.</p

The project is being rolled out in three phases. The first phase will include interest rate derivatives, foreign exchange derivatives, commodities and precious metal trading books, and is due to go live in March 2006. Phase two will include fixed-income securities and the banking book, and is due for completion in February 2007. The third phase is due for completion in September 2007 and will include credit derivatives, equity derivatives, exotics, and securitization type products. The implementation will consolidate data from wholesale source systems into a central data repository. It will replace batch-driven solutions in London and Johannesburg with a real-time exposure management capability. The bank will also use the solution to implement pre-deal credit analysis for on- and off-balance sheet activities.

There were two drivers behind the decision to use Adaptiv, according to John Stathoulis, Standard’s director for risk management in Johannesburg. LogicaCMG, the vendor that supplies the rFrame solution that the bank is currently using, is withdrawing support for the rFrame credit risk management product in the first quarter of 2006. Furthermore, Standard had sought to select a credit package that could accommodate new Basel II requirements as they relate to exposure measurements.

The expected benefits that the new installation should generate focus around better credit management, says Stathoulis. "It’s a question of better exposure measurement, which facilitates credit management. By measuring your exposure correctly, pre-deal risk management can be assessed on a much more accurate basis," he adds.

Waters