Banks give credit to companies on the basis of their reliability. The reliability of an enterprise is defined as the ability of the enterprise itself to repay a loan on time and in the manner set. It is quite intuitive that the higher the level of reliability of a company, the lower the risk that it will not be able to return on time and in full to the Bank the sums that are given on loan. And so, in the same way, the lower the level of reliability of a company, the greater the risk for the Bank of having losses on the sums borrowed from the same company. The process of assessing a customer’s reliability – actual or potential – is done by the Bank with the analysis of a lot of data and information collected through sources inside and outside the company, from the ordinary financial statements to the evidence present in databases (public or private) fed through reports provided by credit institutions and other economic operators.
This assessment process, which is based on quantitative data and company quality information, is reflected in a summary assessment by the Bank of the credit worthiness of the person assessed: the rating. The rating represents a kind of vote that the Bank assigns – internally and independently – to the
customer regarding the reliability of the latter, using parameters and weights that differ from bank to bank. The internal bank ratings of the main credit institutions (banks and other financial intermediaries) are certified by the authorized agencies; they have several reliability classes of the client enterprise (usually from 8 to 20) with representation of the same on numerical scales (e.g. 1,2,3,4,5,6, etc…), alphabetical (AAA, AA, B+, BB, etc…) and alphanumeric (A1, A2, A3, B1, B2, etc…). Since the Bank adopts its own criteria both in the choice of information elements and in the weighting of information elements, the reliability of the same Client can be judged differently from Bank to Bank. Not only that. Given the uneven classification of internal bank ratings and the consequent inhomogeneity of the scales of synthetic representation of the credit worthiness of the assessed entities, the latter very often find it difficult to understand in which reliability (or macro-class) band they are placed by their banks. If Bank A gives me a rating of “4”, Bank B gives me an “AA” rating and Bank C gives me an “A3” rating, which of my banks is the best judgement of my reliability? In what credit rating is my company? Am I considered a low risk, risky or very risky customer? From these the idea of making available to operators a tool that allows them to compare the different internal bank ratings in a homogeneous way, facilitating their reading.