Subject: Commercial Banking in Hong Kong

Question 1 (20 marks) State the features and structure of a Performance Bond (or guarantee), state TWO benefits and give TWO examples with situation (20 marks) Question 2 (20 marks) (a) What is a Documentary Credit for international trade settlement? (5 marks) (b) Contrast and identify TWO major difference between Documentary Credit and Documentary Collection (4 marks) (c) List out any SIX the most common documents attached to a Documentary Credit. (6 marks) (d) Briefly explain how can the Hong Kong Export Credit Insurance Corporation encourage and support the international trading activities in Hong Kong. (5 marks) Question 3 (20 marks) (a) Explain how a bank in Hong Kong assesses the comprehensive picture of an individual's credit score for credit consideration. (8 marks) (6) In the case that a credit officer rejected a SME (small and medium-sized enterprises) loan application, explain the process and evaluate the techniques used for credit assessment. (12 marks) Question 4 (20 marks) (a) List the EIGHT virtual banking license recipients in Hong Kong. (8 marks) (6) With the introduction of virtual banks, discuss what benefits would they bring to retail customers, and what bad/adverse impacts would they bring to traditional banks. (12 marks) Question 5 (20 marks) (a) Give brief explanation on the features of Time Deposit, Target Deposit and Certificates of Deposit (CD). Provide examples to explain under what situation a depositor would consider each of these three products. (14 marks) (b) For the sound lending principle CAMPARI, discuss why Character is always the most important point for credit assessment consideration. (6 marks)