New York, NY (PressExposure) June 24, 2014 -- CEIS Review Inc, the consulting services to the financial community, helps the banks providing complete professional consulting services to bankers by bankers, asset quality reviews, validation of internal risk identification, commercial loan portfolio management, determining the level of risk, loan loss reserve maintenance and asset quality review. Banks and other international financial organizations that enjoy the highest quality portfolio seek financial advice for their loan review service in order to maintain their credit standards.
All banking institutions have to establish the Allowance for Loan and Lease allowance known as ALLL in order to manage the bad debts. This is a calculated reserve made in relation to estimated credit risk of the institution. The amount to be reserved must be in accordance with this risk. The higher this estimated risk the larger this ALLL reserve must be. This must be calculated or reviewed every quarterly.
It is much important for larger financial institutions to engage professional consultancy firms to help them in regulating these funds and to maintain them in a profitable manner. These consulting firms will follow their own separate methodology in implementing the desired result and to channelize the reserve money maintenance in the maximum effective way. CEIS Review Inc., provides ALLL methodology consulting for their clients with a cost effective approach.
Loan Loss Reserve is a methodology by which banks maintain the extra funds as reserve to overcome the non-paid loans. This amount is treated as a cushion which provides smooth functioning of the institution. However, in reality this amount will be reflected in the income statement of the bank and is not as a cash expense. In the accounts book this will be both an expense and asset and hence provides the bank a way to treat it as spent money. This enables the bank authorities not to utilize the amount unless it is needed for emergency.
Several changes will occur in the maintenance of loan loss reserve and its status. Among them the most important one is the adjustments made to this account reflecting in its loan portfolio. Banks can increase their lending capacity while reducing their loan loss reserve and vice versa. These adjustments and maintenance of the Loan Loss Reserve is performed by CEIS Review Inc.