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IBISWorld for Credit Risk and Underwriting
IBISWorld for Credit Risk and Underwriting

How credit professionals can utilize IBISWorld reports.

Updated over a week ago

Note: this article and video predate our Modern Research Experience. We're working on bringing you the most up-to-date training that aligns with our enhanced platform and products.

For a video tutorial, watch IBISWorld for Credit Risk and Underwriting.

IBISWorld for Banking

IBISWorld for Banking is our online industry research database, personalized for our banking clients.

On the home page, the news and insights, tools and suggested knowledge articles are tailored to your role, giving you quick access to relevant information.

IBISWorld for banking homepage

Which industry report sections are most useful for credit professionals?

Let’s get started using the Dentists in the US industry report as an example.

Underwriting at a Glance

When you open an Industry Report, you’ll land on the Industry at a Glance for Banking chapter. Click into the underwriting tab to quickly review key industry information that’s relevant to credit professionals.

Industry at a Glance for banking with the underwriting tab selected

The Risk Snapshot section of the underwriting at a glance tab allows you to quickly identify the risk of lending to a given industry by assigning a risk score on a scale of one to nine, calculated with our proprietary methodology. If an industry’s risk score is six or over, we recommend delving into the industry’s risk components so you can see what’s behind the elevated risk and plan accordingly.

You can access the associated Risk Ratings Report by clicking the “Learn More” button at the bottom of the Risk Snapshot section. If you’re not subscribed to this product and would like to understand its features and benefits, check out our Risk Ratings Reports article for more information.

An example of the Risk Snapshot section

Another section that’s useful for credit professionals is Financial Ratios & Multiples. As stated in this section’s infotip, significant differences between your client’s balance sheet and industry averages may reveal previously unidentified areas of risk or opportunity.

An example of the Industry Financial Ratios section, with the asset size options dropped-down

The Key External Drivers section allows you to understand how positive and negative external factors impact your client’s business. The drivers in this section are labeled as either positive or negative, which is helpful for pricing a loan and determining a risk premium.

An example of the Key External Drivers section

The Executive Summary section gives you an overview of what has happened in the past five years, what is currently happening, and what is projected to the happen within the industry in the next five years.

Products & Markets

The first section in the Products & Markets chapter, Supply Chain, is relevant to credit professionals who need to understand the full scope of credit risk. You can use our supply chain diagram to see where there could be potential disruptions in your client’s upstream or downstream supply chain that could impact their business’s product or service offering.

An example of the Supply Chain section in the Products & Markets chapter

The Products & Services section helps you understand what different revenue streams are important for operators within your client’s industry. If your client wants to expand into additional product or service lines they don’t currently offer, you can see which areas generate the most revenue and where they may need further capital.

An example of the Products & Services section of the Products & Markets chapter

With the Major Markets section, you can ask the following questions of your client:

  • Are they marketing to the biggest potential buyers?

  • Where are their revenue streams coming from in terms of demographics and groups?

  • Are they diversified in their revenue streams?

  • Do their revenue streams align with IBISWorld’s market segmentation?

An example of the Major Markets section in the Products & Markets chapter

Geographic Breakdown

The Geographic Breakdown chapter gives you more granular insights into your client’s industry at the state level. While the Products & Markets chapter gives you insights into potential markets and product areas for clients to move into, this chapter gives you insights into potential states they can expand into or focus on.

An example of the interactive map of the US in the Geographic Breakdown chapter

Clicking into any of the states within this chapter will bring you to our US Industry State Reports product for that state. The US Industry State Reports are a separate IBISWorld product that subscribers can access through this chapter. Nonsubscribers can still find sortable state-level data within the Geographic Breakdown chapter.

Check out our State and Provincial Industry Reports article for more information on this product and how to subscribe to it.

Operating Conditions

The Operating Conditions chapter allows you to hone in on a number of factors when determining whether to approve a loan.

The Capital Intensity section helps you determine the level of capital needed and whether the business is more capital-intensive or labor-intensive.

An example of the Capital Intensity section in the Operating Conditions chapter

The Technology & Systems section allows you to examine if there’s rapidly changing technology in your client’s industry that would require more capital or if the industry is more steady, requiring capital for standard operating costs.

An example of the Revenue Volatility section of the Operating Conditions chapter

The Revenue Volatility section allows you to look into the level of volatility for your client’s industry and examine whether your bank is willing to lend to a business with this industry’s level of volatility.

The Regulation & Policy section looks at the degree to which government regulations impact a given industry, while the Industry Assistance section looks at how much assistance a given industry gets from the government.

Key Statistics

The Key statistics chapter is where you can find all the historical data for a given industry, going back 20 years. You can use this chapter to go back to specific time periods and see how events such as the 2008 financial crisis or the COVID-19 pandemic impacted your client’s industry.

The Industry Financial Ratios section is very useful for credit professionals because it allows you to filter over 40 financial ratios by asset size to more accurately qualify your client.

An example of the Industry Financial Ratios section with the asset-size options dropped-down

Risk Ratings Reports

You can access the Risk Ratings Report for your client’s industry by clicking the lightning bolt icon in the far left-hand navigation of an industry report or by opening the Risk Ratings tab in the top navigation bar.

An example of the Sensitivity Risk section, with the national unemployment rate and total health expenditure

As mentioned earlier in the article, the Risk Ratings Report rates an industry’s risk on a scale from one to nine using our proprietary methodology. The risk score is dynamic, changing month to month as factors influencing the industry change.

As you can see in the left-hand navigation, this product covers the structural, growth and sensitivity risk for a given industry. In the example below, the national unemployment rate and total health expenditure rank low, having a positive impact on the overall risk score. You can use these levels to determine how each factor may affect your client’s bottom line.

An example of the Sensitivity Risk section, with the national unemployment rate and total health expenditure components highlighted

For additional questions regarding IBISWorld for credit professionals, please contact your Client Relationship Manager. If you don’t have an IBISWorld account, please contact us to learn more about our membership options.

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