Credit risk is the risk that customers are not able to meet their payments.
This comprises non-payment risks, sovereign risks and default risks.
The outstanding credit volume of the OeKB Group consists predominantly in export financing credits. Due to the strict guidelines for credit extension, these credits are granted subject to stringent requirements concerning collaterisation (e.g. above all guarantees of the Republic of Austria). To hedge against credit risks in connection with derivative financial transactions, collateral agreements were concluded with the most important counterparties, while with the remaining counterparties downgrade trigger clauses were laid down. They allow contract assignment to other business partners or contract termination after a defined rating downgrade.
The business partners are grouped into five internal rating categories based on external ratings of internationally recognised rating agencies (Standard & Poor's, Moody's, Fitch Ratings). The development of the ratings is monitored on an ongoing basis. Internally developed criteria are applied in respect of customers for whom no external rating is available.