What is Bank Credit?

Bank credit is an economic activity in which a bank temporarily lends some of its deposits to enterprises and institutions for use and collects and collects a certain amount of interest within an agreed time. Bank credit refers to currency borrowing that uses banks as intermediaries and requires interest in return. Banks are used as intermediaries to define the form of credit and its development stages. Only refers to borrowing through banks.

Bank credit

Bank credit is part of the bank

Credit, that is, credit, borrowing. Bank credit refers to a bank intermediary and requires interest in return

Main sources: 1. Various

First, understand the importance of credit to banks. Now talking about the bank, the eight words "deposit bank, bank loan" are already spoken by everyone, but in actual work, everyone's experience is different. This is inseparable from the period, location and angle of each person. The main profit of domestic banks comes from credit spreads. The statistics are about 85%. Now they are declining, but they are also above 70%. Therefore, credit business is the main business of domestic banks without any disputes (intermediate business profits of foreign banks can already compete with credit profits). The quality of credit business determines the performance of banks' operations. The importance of loans has exceeded the importance of deposits.

Second, the source of repayment in credit business. There are many specific businesses for credit, such as the signing of loan contracts, the keeping of funds and debit receipts, and collection notices. Here, we mainly discuss the sources of repayment by borrowing companies. The repayment source of the enterprise can be divided into the first repayment source and the second repayment source. The first repayment source comes from the company's cash, the second repayment comes from the company's property mortgage and third party guarantee, and the third party guarantee The sources can be recycled from the cash and the property of the guarantor.

Third, the relationship between repayment sources and financial statements. The first source of repayment is to analyze the company's profit and loss statement and cash flow statement; the property mortgage in the second source of repayment is to analyze the company's balance sheet. ^[2]