Certificate in Bank Analysis
This engaging course equips learners with knowledge of crucial performance metrics and the principal accounts on balance sheets and income statements specific to banking. Moreover, learners will receive a systematic method for evaluating the credit risk associated with commercial and universal banks in developed markets, along with the ability to independently evaluate a bank’s financial robustness and vulnerabilities.
Select from the dropdown list to explore course locations, delivery methods, dates, and prices.
Skills You
Will Gain
The risks in the different business lines and products offered by financial institutions and how they are reflected in the financial statements
The components of bank financial statements and key ratios used in bank analysis
The impact of differing accounting standards and policies (e.g. provisioning, asset valuation, securitisation etc.) on the financial statements
The CAMELS framework (capital, asset quality, management, earnings, liquidity and sensitivity to market risk) and key ratios to make a preliminary assessment of the performance and financial health of a bank.
A structured approach to the analysis of banks, incorporating the CAMELS framework within the wider context of the operating environment and support
Who
Should Attend
This course is tailored for analysts with little to no background in scrutinizing financial statements of financial institutions. It serves as an intermediate-level training course suited for professionals in credit risk management, fixed income, origination, and regulatory sectors.
Course
Content
MODULE
Analytic Overview
- Defining CAMELS within the context of overall bank analysis
The aim of this section is to consider the different types of financial institution, key products and how the business of banking is reflected in the financial statements.
- Key activities and products of financial institutions: credit products, trading and investing, services and funding
- Business models and key drivers of performance
- Relating the business to the balance sheet and income statement: differences between balance sheets of different types of bank and non-bank financial institution
- Major balance sheet and income statement components
- Exercise: building a balance sheet for banks and non-bank financial institutions
MOULE
Business Risk
The aim of this section is to consider the asset quality of a bank and use key ratios to understand a bank’s business risk.
- Statement logic and accounting: types of credit risk, on and off balance sheet, accounting for problem impaired loans
- Loan quality: portfolio analysis, impaired/problem loans (past due, non-accrual and restructured loans)
- Reserve adequacy: provisioning levels, allowance, charge offs and recoveries
- Local and international benchmarks for key ratios and performance indicators
- Trading and investments: securities and derivatives portfolios
- Exercise: problem loan definitions
- Exercise: matching asset quality ratios
The aim of this section is to introduce market risk and the concept of value at risk.
- Statement logic and accounting: valuation techniques for investments and derivatives – fair value through income statement, available for sale, held to maturity; SFAS 157 disclosures
- Risk in the securities and derivatives portfolios
- Value at risk and other measures of market risk: advantages and disadvantages
- Illustration case study: market risk disclosure
MODULE
Earnings
The aim of this section is to look at earning streams for banks and use key ratios to understand the costs and income dynamics of banks.
- Statement logic and accounting: types of income and expense, impact of earnings accrual and asset impairment policies, core and non-core earnings
- Key drivers of earnings: net interest margin, fees and commissions, trading
- Ratios to measure quality and diversity of income, cost control, provision burden
- Local and international benchmarks for key performance indicators
- Exercise: matching earnings ratios
- Illustration case study: performance risk ratio analysis
MODULE
Financial Risk
The aim of this section is to consider the funding sources available to banks, the key drivers of liquidity and use key ratios to understand liquidity and funding at banks.
- Statement logic and accounting: funding sources, on and off balance sheet treatment for securitisation
- Funding stability and different sources: deposits, commercial paper, repos, inter-bank lines, senior and subordinated bonds, common and preferred stock
- Key drivers of liquidity: volatility of liabilities, quality and liquidity of assets, contingency funding needs
- Local and international benchmarks for key liquidity and performance indicators
- Exercise: matching liquidity rates
The aim of this section is to appreciate the various types of capital and use key ratios to assess the adequacy of a bank’s capital.
- Statement logic and accounting: types of capital, reported book equity, adjusted common equity and hybrid capital
- Key drivers of capital: earnings, asset valuation, capital raising
- International and local capital regulation: Basel I and II; Basel III changes
- Risk weighted assets: Basel I vs. Basel II approach
- Key ratios: Tier I and total capital ratios, leverage, core capital and other measures
- Local and international benchmarks for key performance indicators
- Exercise: financial statement analysis
- Illustration case study: assessing financial risk
MODULE
Analytic Overview
This section provides a structured framework of analysis including the use of market indicators.
- Overview of the framework and tools of bank analysis: Operating environment, financial fundamentals, management, support
- Purpose and payback model: A structured approach to credit analysis
- Key issues in exposures to banks: Exposure profile, seniority, safeguards, pricing
- Rating agency approaches: Issuer ratings, individual/ financial strength and support ratings
- CAMELS (capital, assets, management, earnings, liquidity, sensitivity to market risk)
- Market perspective on credit: Equity indicators, credit default swap and bond market indicators
- Exercise: Understanding and applying the purpose payback model and demonstrate the typical borrowing needs and repayment capacity of a commercial bank.
MODULE
Operating Environment
Macroeconomic and sector issues
This section focuses on the impact of external factors on the banking systems, including the economic environment, competitive environment plus regulatory and supervisory pressures.
- Impact of macro-economic variables on performance
- Bank systemic risk: Macro prudential indicators
- Macro prudential indicators of risk; credit growth, equity and property prices and FX
- Competitive and structural issues of the banking system
- Changing roles of the regulator and supervisor
- Key regulations: Purpose and implementation
- Quality of regulation
- Exercise: Considering the impact on bank profitability of the operating environment in various countries
- Exercise: Consider and quantify the impact on bank capital adequacy ratios of the implementation of Basel III
The aim of this section is to introduce market risk and the concept of value at risk.
- Statement logic and accounting: valuation techniques for investments and derivatives – fair value through income statement, available for sale, held to maturity; SFAS 157 disclosures
- Risk in the securities and derivatives portfolios
- Value at risk and other measures of market risk: Advantages and disadvantages
- Illustration case study: Market risk disclosure
MODULE
Financial Fundamentals
Statement Logic
This section covers how to measure and evaluate bank performance, distinguish strong and weak performance and appreciate the limitations of the figures.
- Relating business mix to financial statements
- Accounting policies and disclosure: IFRS and local GAAP; fair valuation – securities, derivatives, own debt
- Exercise: Understanding how the business model of a financial institution impacts its financial statements
Business Risk
- Loan portfolio analysis: Uncovering the risk profile; key differences between types of bank
- Loan quality: Impaired loans and reserve adequacy
- Offf balance sheet exposures: Lending commitments, SIVs, conduits and other special purpose vehicles
- Trading risk: Assessing securities and derivatives portfolios, use of value at risk (VaR) models and stress testing
Business Risk (continued)
- Investment risk: Valuation and accounting policies, hidden reserve or black hole
- Exercise: The capital base and profitability of a bank may be influenced by their provisioning policies
- Exercise: Identify the risks prevalent in the trading operations of a commercial or investment bank
MODULE
Financial Fundamentals (continued)
- Main illustration case study: Assessing business risk, incorporating loan portfolio quality, trading portfolio and other credit and market risks
Performance Risk – Earnings
- Balancing the risk/return profile: Strategy and risk appetite
- Income stability and diversity: Earnings at risk
- Control of expenses: Targets and peer comparisons
- Main illustration case study: Assessing performance of a bank, incorporating overall returns, income diversity and stability and cost control
Financial Risk – Liquidity
- Funding risk: Stability and variety of funding sources, contingency funding
- Liquidity of assets: Identifying truly liquid assets, stable funding of illiquid assets
- Liquidity of liabilities: Stability of deposit base, dependence on short – term wholesale funding, inter-bank market, key challenges of repo and CP funding
- Liquidity: Quantitative and qualitative measures, Basel III liquidity
- Liquidity Coverage Ratio and Stable Funding Ratio
- Gap management: Using the tenor and interest rate mismatch tables to better understand refinancing risk
- Securitization vehicles: Accounting and credit implications
- Exercise: Demonstrate how a bank’s funding structure can impact its liquidity position and interest rate exposure Financial Risk – Solvency
- Capital: Size, quality and adequacy of capital base under Basel I, II and III
- Types of capital: Core (common equity) vs. Additional Tier 1 and Tier 2
MODULE
Financial Risk – Solvency
- Standardized and advanced approaches for credit, market and operational risk
- Leverage ratios: Benchmarks and challenge
- Capital adequacy: Measuring size, quality and adequacy of capital base; regulatory capital ratios and assessing regulatory capital for non-deposit takers
- Economic capital and internal capital adequacy assessment process (ICAAP)
- Stress-testing capital for market and credit write-downs
- Main illustration case study: Assessing financial risk including solvency, funding strategy and liquidity in the light of the risk profile of the business model
MODULE
Early Warning Signals
This section considers a variety of early warning signals which may indicate financial stress at a bank.
- Financial and non-financial indicators of distress
- Market indicators: Equity, CDS and bond indicators
- Lessons learned from banks
- Exercise: Distinguishing strong and weak players
MODULE
Management, Franchise and Ownership
This section focuses on the key risk areas and strategy, franchise and risk management.
- Management: Strategy, systems, skills, structure
- Risk management
- Francise: Strength of banking business model
MODULE
Support
This section considers which institutions may receive government or shareholder support and in what form that support may be received.
- Bail- in vs Bail-out, living wills, BRRD and TLAC Income stability and diversity: Earnings at risk
- Reliance on support: Rating floors; which creditors are supported
- Loss absorbing capability of various levels of capital including equity, preference shares, contingent convertibles, subordinated debt and senior medium-term debt
- Solvency vs. liquidity problems
- Regulatory responses to banking crisis: Recapitalization, guarantees, bad banks, insurance
- Exercise: Recognize the main approaches to support employed by governments and their pros and cons
MODULE
Group Case Study
The goal of this closing case study is for participants to apply the analytic framework to identify the strengths and weaknesses in a developed market commercial bank.
Upcoming
Dates
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| 13 - 17 Oct 20255 Days | In-person Classroom | Dubai | 5295 GBP | |
| 10 - 14 Nov 20255 Days | Virtual Classroom | SGT | 5495 USD | |
| 21 - 25 Jul 20255 Days | In-person Classroom | London | 5295 GBP | |
| 20 - 24 Oct 20255 Days | In-person Classroom | Frankfurt | 6395 EUR | |
| 15 - 19 Sep 20255 Days | Virtual Classroom | BST | 4595 GBP | |
| 07 - 11 Jul 20255 Days | In-person Classroom | New York | 6395 USD | |
| 01 - 05 Dec 20255 Days | In-person Classroom | Washington, DC | 6395 USD | |
| 22 - 26 Sep 20255 Days | Virtual Classroom | CDT | 5495 USD |
Frequently
Asked Questions
All courses start at 9am and end at 5pm.
Our courses are designed to be both engaging and flexible, offering a mix of classroom and virtual options to accommodate different preferences. Virtual classroom courses are via Zoom. The courses range from 1 to 5 days in duration, providing an immersive learning experience that is both interactive and case study-based. This approach ensures that participants can apply practical insights to real-world scenarios. The sessions are conducted by experienced trainers who were previously industry practitioners, bringing a wealth of knowledge and firsthand expertise to the training environment.
Most delegates who attend our courses in the UK are able to claim back their VAT once it has been paid. The below information details why we need to charge VAT and how you can claim it back.
Why does Fitch Learning charge VAT?
The EU VAT Directive (Council Directive 2006/112/EC) article 53 says that for the right of entry to cultural, artistic, sporting, scientific, educational, entertainment or similar events in exchange for a ticket or payment, the place of supply is where the event physically takes place. Since, the event is held in the UK, the place of supply is the UK and therefore UK VAT has to be charged.
How can you claim back the VAT you paid for a course?
The most efficient way to claim back VAT is directly through the UK’s HM Revenue and Customs (HMRC) by completing the required forms and sending back to HMRC.
Please follow the links below for further details; EU businesses Non-EU businesses To claim back VAT or if you have any questions please contact HMRC; Telephone – 0044 (0) 3000 537 381 Email Overseas Repayment Unit – enq.oru.ni@hmrc.gsi.gov.uk.
You will receive joining instructions two weeks before the course start date, as long as we have received payment in advance of this.
Is there pre-course reading?
In order to optimize class time we ask participants to read some background information on the main illustration case(s) prior to attending the class. This also helps to ensure that all are able to participate in case discussions. In some cases additional background reading is provided. The length of pre-course reading is advised to participants in advance and typically ranges from 2-3 hours. You will need to bring a laptop or tablet to the course in order to access the course materials, as these will only be available electronically.
Can I pay via an invoice?
Yes. We will issue you an invoice, if requested at the point of booking.
When do I need to pay?
If your company is paying your invoice for you, your company will have 30 days in which to process it. If you are paying for the course yourself, you will need to pay before attendance.
What’s the accepted payment methods? We accept bank transfers or payments via Mastercard, Visa or Amex (except Euro payments).
The EU VAT Directive (Council Directive 2006/112/EC) article 53 says that for the right of entry to cultural, artistic, sporting, scientific, educational, entertainment or similar events in exchange for a ticket or payment, the place of supply is where the event physically takes place. Based on this, we need to charge the appropriate Tax/VAT in each country we provide classroom based courses. The current rate of 20% VAT is added to courses taking place in London, 19% in Frankfurt, 9% in Singapore and 5% in Dubai. In other locations we may need to charge a sales tax although not currently for New York.
If I am unable to attend can I send a substitute?
Absolutely and it is completely free of charge. We do however ask that we have at least 2 working days’ notice of this change before the course start date. Please email enquiry@fitchlearning.com with full contact details of the substitute and who they are replacing.
Can I transfer my booked course to another date?
Yes you can. If you email us your request to transfer to the next available course date and give us more than 30 days’ notice, there will be no charge. If you notify us within 30 days of the course start date, there will be an additional payment of 25% of the course fee, provided the original course fee has been paid in full. A transfer can only be made onto a course taking place within a period of 6 months of the original course date and only one transfer can be made in respect of any booking.
Can I cancel my course booking?
If you email us with your request more than 30 days before the course start date, there will be no charge. If you notify us within 30 days of the course start date you are liable for the full course fees.
What happens if I do not attend my course?
If you do not attend your course and you do not give us any prior notice you are liable for the full course fee and no refunds can be given. Notice contact details: Email: enquiry@fitchlearning.com.
We are unable to send anything more than our standard course communication. This communication will detail the course you are attending, the location and dates, so it will provide you with all of the information you require to submit a visa application.
No, we do not typically record a public course session. The only time we will record a session, is if a delegate is receiving funding and this is a requirement of the funding provider. In these cases, the recording is only shared with the funding provider and delegates do not receive a copy.
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