2011 Early Bird Offer - 2nd person 25% discount.
If you register 8+ weeks before the course date, the 2nd person gets a 25% discount.
*Terms and conditions apply.
Course Objectives
Participants will be equipped to:
- Apply a structured approach to identify strong and weak performers, incorporating financial, qualitative and market indicators
- Understand impact of key economic, political, regulatory and supervisory issues
- Recognise early warning signals of credit deterioration
- Assess risks in inter-bank exposures and relative value in bank securities.
Target Audience
This workshop is targeted at an intermediate level for credit risk management, origination, fixed income and regulatory professionals but is also suitable for a wider audience who wish to understand the key risk drivers of community and regional banks as small and midsize lenders.
Other Bank Workshops
The two day workshop Introduction to Bank Financial Statements is designed as a preparation for those with limited accounting and banking experience. Our other Intensive Bank Analysis workshop covers a similar analytic approach with larger international banks and Emerging Market Banks and Analysis focuses on emerging markets. Other complementary workshops include Risk Management in Banks & the Capital Implications and Bank Failures: Applying Lessons Learned & Early Warning Signals.
The majority of Fitch Training programmes are offered at an intermediate and advanced level. There are no specific prerequisite courses to attend our programmes, however some topic knowledge maybe required. Please refer to the target audience to see what level of prior knowledge is required for a specific course.
Content
ANALYTIC OVERVIEW
- Structured approach to credit analysis - purpose payback model
- CAMELS (capital, assets, management, earnings, liquidity & sensitivity to market risk)
- Rating agency approaches: issuer ratings, individual / financial strength and support ratings
- Market perspectives: CDS, bond spreads and equity indicators
OPERATING ENVIRONMENT
- Macro economic issues that impact performance
- Sub-prime and other drivers of the credit crunch: Which banks are most vulnerable?
- Competitive and structural issues
- Regulation and supervision: federal and state level
- Liquidity, capital adequacy, deposit insurance and other regulations
FINANCIAL FUNDAMENTALS
Statement logic and business model
- Differing bank business models
- Relating business mix to balance sheet and income structure
- Accounting policies: GAAP and statutory filings
Business risk
- Benchmarking strong and weak performance through the cycle
- Loan quality - portfolio analysis, problem loans and reserve adequacy
- Stress testing the loan portfolio for key risk areas; how does current performance compare to the last downturn?
- Mortgage exposures: on and off balance sheet, servicing rights, gain on sale, identifying vulnerabilities to write-downs
- Securities portfolios: determining quality and liquidity of investment and liquidity portfolios
- Trading, investment and derivatives risk
- Fair value accounting for trading and investment portfolios: uncovering the implications of holding illiquid assets
Financial risk
- Funding risk - stability and variety of funding sources, contingency funding;
- Changing access to Fannie Mae, Freddie Mac and Federal Home Loan Banks for funding
- Securitization – exposure to existing and potential for new on and off balance sheet funding vehicles
- Asset and liability management: gap and liquidity management
- Capital adequacy - size, quality and adequacy of capital base
- Stress testing for the adequacy of liquidity and capital
Performance risk
- Balancing the risk / return profile: net interest; gain on sale, trading and commission income
- Cost of credit: can the bank afford to make provisions for bad loans?
- Income stability and expense control
- Interest rate exposure: margin pressure and interest rate gaps
Early warning signals
- Financial and non-financial indicators
- Dynamics of commercial real estate market and residential real estate development
- Using surveillance reports to anticipate credit deterioration
- Identifying vulnerabilities to write-downs and rapid erosion of core capital
- Similarities and differences with past crisis (savings and loans)
MANAGEMENT, FRANCHISE & OWNERSHIP
Management
- Linking bank business model, strategy and risk appetite to financial results
- Structured approach to analysis: strategy, systems, skills, structure
- Risk management: credit, market, operational and liquidity
- Adjusting to the new banking environment
- Early warning signals: When financial performance does not support your understanding of the bank’s business model
Franchise
- Franchise - sources and measures
- Potential for M&A: Is the bank a potential takeover target?
Ownership structure
- Differing ownership structures and the implications for creditors: bank holding companies, mutuals, co-operatives, conglomerates
SUPPORT
- Solvency versus liquidity problems
- Lender of last resort and other possible sources of support
- Regulatory response to financial crises
- Recovery expectations upon default for different creditors; lessons learned from crisis.
Workshop Times
Below are typical timings for our courses; upon registration we shall advise you if these have changed.
Breakfast: 8.30am
Course Start: 9.00am
Course End: Between 5.00pm and 5.30pm
Lunch starts between 12.30pm and 1.00pm, and lasts no longer than 1 hour.
Short breaks of 10 - 15 minutes are taken mid morning and mid afternoon.
*Terms and Conditions:
This applies only to two people from the same company registering for the same course on the same dates at the same time. The on-line registration form must be submitted 8+ weeks before the course start date. This offer is only applicable to new registrations, it cannot be applied retrospectively to existing participants and no refunds will be given. It can not be used in conjunction with any other offer.