Internal Model of Commercial Bank as an Instrument for Measuring Credit Risk of the Borrower in Relation to Financial Performance (Credit Scoring and Bankruptcy Models)

Commercial banks generally use different methods and procedures for managing credit risk. The internal rating method in which the client has an important position in the process of granting credit provides a comprehensive assessment of client creditworthiness. The aim of this article is to analyze selected theoretical, methodological and practical aspects of internal rating models of commercial banks within the context of models that measures financial performance and to make a comparison of results of real-rating models which are used in the Czech Republic and Slovakia. The results of the chosen credit scoring and bankruptcy methods on selected companies from segments of small and medium-sized companies are presented.