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Financial Institution Analysis

A technical analysis of financial institutions with a rigorous framework together with a practical viewpoint of risk assessment and mitigation

The rich blue and pink hues of a cluster of leaves  are rare and beautiful sight

A one-day course presented over two half-days in a virtual class from 09:30-13:00 UK Time

Developing an analytical framework for analysis

  • Structured approach to analysis
    • What are we trying to analyse?
      • asset risk
      • counterparty risk
      • liquidity risk
      • investment risk
      • systemic risk
      • arbitrage opportunities
    • Definition of CAMELS as an analysis tool
  • Types of financial institutions: retail, investment banks, central banks, commercial
    banks, brokers, etc.
  • State owned/part owned banks and level of future government support
  • Shareholder expectations
  • The impact of technology on the traditional banking system - FinTechs

Case study: reviewing the financial statements of a bank and assessing the risks

Business models and key performance drivers

  • Overview of the frameworks and tools of bank analysis: operating environment, financial fundamentals, management, support
  • Evaluating the FI revenue base - performance risk:
    • Diversity of revenue base
    • Income stability: earnings at risk and earnings volatility
    • Control of expenses
      • link to business strategy
      • role of technology
    • Margin spread
      • yield curve impact
    • Understanding the key financial ratios to analyse the revenue base
      • net interest margin
      • non interest margin
      • cost/income ratio
    • Understanding financial structure and risks:
      • Loan portfolio analysis, loan quality (non performing loans and coverage ratio)
      • Provisioning policy and charge offs
      • Trading risk: securities and derivative portfolio
      • Investment risk: valuation and accounting policies
      • Management of risks
    • Financial risk: stability and variety of funding sources, contingency funding;
      • 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
      • Liquidity ratios and stress testing

Case studies from developed and developing markets will be used to illustrate the topic areas

  • The rating agency framework for risk analysis
    • Moodys, S&P, Fitch
    • Limitations of using credit ratings for counterparty risk
    • Migration risk
  • Solvency: leverage ratios
  • Capital adequacy – how much is enough?
  • Key ratios
    • Tier 1 and total capital ratios, leverage, core capital and other measures
  • Regulation and Supervision:
    • Key regulations
    • Basel III vs Basel IV
    • Standardised and advanced approaches for credit, market and operational risk
    • Contingent capital – CoCo’s
  • Support: solvency and liquidity problems, different types of support

Case studies from developed and developing markets will be used to illustrate the topic areas

The trainer is the Managing Director of an international advisory company specialising in advisory and development services to the corporate, banking and finance industry, which he has owned for the past 17 years. He is an experienced corporate finance professional with practical experience and extensive knowledge of corporate and structured finance in global financial markets.

He is a Visiting Fellow in the M&A department and Programme Director at Executive Development, Sir John Cass Business School, London, a member of the Visiting Faculty at Fuqua Business School and has previously worked as an advisor to the Overseas Development Administration in the UK, as well as EU PHARE and TACIS programmes throughout Europe and Russia.

His main areas of expertise are corporate finance, M&A, corporate analysis and structured finance, asset securitization, risk management, valuation, corporate credit processes, project finance, and treasury management. He currently works with many global corporate and banking clients in these areas and he also acts as an Expert Witness for London law firms in respect of his areas of expertise.

The list of global clients is extensive and covers both European, Middle East, African and Asian markets. In the corporate market, he works extensively with large corporate clients, private equity firms, private investors as well as public sector companies such as the NHS and major law firms. He provides advisory and development services to these organisations, either through the relevant departments or directly to the senior line management.

The trainer is also a well-known figure within the various training and development companies within Europe and regularly gives seminars throughout the world on his specialist topic areas and is a recognized expert in this area by many organisations.

He was previously the Managing Director of a subsidiary of Union Plc, a London merchant bank having previously worked with several high-profile global investment banks. He left Union Plc in 1996 to form his own international advisory Company.

The list of financial institutions and corporates with whom he has worked over recent years is extensive and includes: Allied Irish Bank, Alpha Bank, Bank of America Merrill Lynch, Bank of China, Barclays, Bayern LB, BT plc, Citibank, China Construction Bank, Credit Agricole, Credit Suisse, Danone, DECC, Deloitte, Dexia, Emirates Bank, E&Y, Euler Hermes, First Gulf Bank, FSA London, Garanti Bank, HBOS, Hohhot Bank Mongolia, HSBC, HVB, Iccrea Banca, Intesa SanPaolo, Central Bank of Ireland, KPMG, L’Oreal, Malta FSA, Mongolian Stock Exchange, Morgan Stanley, Mubabdala, NHS and many others.

Following consecutive years of slower world growth, the outlook has improved in 2024 but political and economic risks are increasing, and this will place many financial institutions under more stress.  There are increasing risks from technology advancements, regulatory changes and the rapid growth in the private debt market.  The increased levels of corporate debt in many countries following a prolonged period of low interest rates could lead to an increased level of non-performing loans and potential bank failures.  In addition, the competitive position of many traditional banks is being eroding by the increased use of technology solutions and the emerging presence of FinTechs.

This one-day programme is designed to cover the areas of bank performance and evaluation necessary to understanding the key risk areas of financial institutions.  The programme will include short lecture sessions and case study examples from both developed and emerging markets. 

What you will learn:

  • How to analyse the risk of commercial banks within an economic system
  • How to use the CAMEL analytical approach
  • How to analyse a bank's balance sheet and income statement
  • How to critically appraise the key performance indicators for banks
  • An understanding of the implications of capital adequacy concerns and standards
  • How to analyse a financial institution using ratio analysis and assess the relative financial condition of peers

This programme combines a technical analysis of financial institutions with a rigorous framework together with a practical viewpoint  of risk assessment and mitigation.  There is copious use of practical examples used throughout the course to allow delegates to have a hands on analysis of commercial banks and take away a solid framework for use in their organisation.

  • Commercial bankers
  • Analysts and brokers
  • Fixed income professionals
  • Central bankers
  • Credit officers
  • Lawyers
  • Regulators

The financial analysis of financial institutions covers the following areas:

  • The causes of sovereign risk and the impact on the commercial banking sector
  • An analytical framework for understanding commercial bank risks
  • The key performance drivers of commercial bank performance and models to analyse the risk factors

  • The knowledge gained during the course is going to help to take more risk-managed decisions in the financing of financial institutions. Additionally, it helps to better understand the banking and insurance industry as such.
  • The training course was very insightful with valuable recommendations provided. The knowledge will definitely improve my personal expertise when dealing with financial institutions.
  • Very concentrated, informative course on the topic, which is highly interesting for me, since the Financial institutions' analysis became a part of my daily work. A large ground for thoughts on the Bank's overall performance and our possibility to evaluate them. Many thanks to the trainer for his fascinating manner of imparting knowledge!
  • It has inspired me to look more critically at and analyze the customers, counterparts and stakeholders in the industry.
Number of places:

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£ 1390.00

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