Intensive Bank Analysis

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The goal of this section is to establish a structured framework of analysis and use
market indicators to give a first view on a credit. Overview of the frameworks and
tools of bank analysis: operating environment, financial fundamentals, management,
support 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
Purpose and payback model: a structured approach to credit analysis
Key issues in exposures to banks: exposure profile, seniority, safeguards, pricing
Case study / exercise: understanding and applying the purpose payback model and
demonstrate the typical borrowing needs and repayment capacity of a commercial
bank.

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Intensive Bank Analysis

  1. 1. Intensive Bank Analysis A Three day training course in bank Analysis.Course Objectives 25th - 27th oct 2011,The overall goal of this intensive three day workshop is to provide participants withstructured approach to analysing the credit risk of banks and the skills to make anindependent assessment of the strengths and weaknesses of a bank. egyptParticipants will be equipped to:Ÿ Use a structured approach to the analysis of banks, incorporating the CAMELS framework within the wider context of the operating environment and supportŸ Identify strong & weak performers using a detailed analysis of financial statements Target Audience within the context of local and international accounting and business normsŸ Identify financial, qualitative and market early warning signals of credit migration Intermediate level workshop for credit riskŸ Stress test bank capital and ability to withstand credit, market and liquidity risk management, fixedŸ Evaluate strategy and risk management capabilities within the context of the current income, origination and regulatory and future economic climate and changing competitive, political and regulatory professionals. conditions, including Basel III capital and liquidity requirements. Organised by :Analytic OverviewThe goal of this section is to establish a structured framework of analysis and usemarket indicators to give a first view on a credit. Overview of the frameworks andtools of bank analysis: operating environment, financial fundamentals,management, support Rating agency approaches: issuer ratings, individual /financial strength and support ratingsCAMELS (capital, assets, management, earnings, liquidity, sensitivity to marketrisk) Market perspective on credit: equity indicators, credit default swap and bondmarket indicators T : + 91-80-41241378 F :+ 91-80-4126 3672Purpose and payback model: a structured approach to credit analysisKey issues in exposures to banks: exposure profile, seniority, safeguards, pricing C :Zayeem AhmedCase study / exercise: understanding and applying the purpose payback modeland demonstrate the typical borrowing needs and repayment capacity of a E-mail trainings@sapienceevents.com :commercial bank. For more details please log on to our website: www.maximevents.in
  2. 2. Intensive Bank Analysis 25th - 27th OCT 2011, Egypt Trainer Profile Mr BUCAILLE, HEC, Master of Law (Paris); Languages: English, French and German Mr Bucaille’s career encompasses two distinct streams: Professional Banker and Teacher. He started his career as an Assistant Professor in Finance at HEC Management School, followed by 4 years with Schneider Electric within the industrial and financial subsidiaries internet audit and financial controlling teams. In 1976, he joined CIC Banking Group and held a number of positions including Head of CIC’s Financial Institutions Group and Corporate Banking Manager. Since 2000, Jean Francois was head of Global Risks Analytics at Credit Mutuel CIC with coverage responsibility for Developed and Emerging Markets, and the management and development of junior and senior staff. Throughout his career he has trained and taught Finance within the financial industry and in an academic context. He is known for his unique and interactive training style – he is a passionate trainer: Professor of Finance at HEC and University of Caen – Banks and Corporate ratings etc. and within industry at the Luxembourg Banking Academy, Germany Banking Academy, Austria Banking Academy. Course outline Day 1INTRODUCTIONIntroduction to Bank’s credit risk analysis:Ø Presentation, course organizationØ Contents overviewØ Trainer’s advice and guidelines to credit risk analysisPART 1: - BANKS BUSINESS PROFILESection 1: BUSINESS MODEL EVALUATIONSection 2: MANAGEMENTSection 3: SIZE & MARKET SHARE SECTION 1: Business Model EvaluationØ Banks business segments and performance identificationEXERCISE 1: Identifying banks business segments (IFRS 8), their long term individual contributionsto a bank’s revenues and operating income after cost of risk. T : + 91-80-41241378 F : + 91-80-4126 3672 C : Zayeem Ahmed E-mail : trainings@maximevents.in
  3. 3. Intensive Bank AnalysisØ Banks business segments specific profitability and risks assessmentEXERCISE 2:Assess the benchmark bank’s profitability level, volatility and specific segments related risks (credit specific risk and concentration,refinancing risk, forex risk, other market risks, operational risk, etc..). Relate the benchmark bank to an aggressive or more conservative bankingbusiness model SECTION 2: ManagementØ What is a bank’s risk culture?Ø Benchmark bank’s evaluation of its management’s experience, achievement, risk culture, organization and corporate governanceBenchmark bank’s management evaluationLessons learned SECTION 3: SIZE & MARKET SHARE Ÿ Benchmark bank’s size and market share evaluation GROUP CONCLUSION ON PART 1: QUALITATTIVE ASSESSMENT OF THE BENCHMARK BANK’S BUSINESS PROFILE Day 2 PART 2: REGULATION QUALITY & LEADING MACROECONOMICS INDICATORS Section 1: REGULATION and SUPERVISION Section 2: KEY MACROECONOMICS DATA SECTION 1: REGULATION and SUPERVISION Ø Central Banking and Supervisory Watch Focus on supervision objectives, adequate means, experience, quality, independence and achievement Quality assessment of the benchmark bank’s regulation authority Ø BIS Central Banking Forum Focus on Basel II and Basel III new approach to minimum required capital rules Benchmark bank’s Tier 1 and Tier 2 calculation examples T : + 91-80-41241378 F : + 91-80-4126 3672 C : Zayeem Ahmed E-mail : trainings@maximevents.in
  4. 4. Intensive Bank Analysis SECTION 2: KEY MACROECONOMICS DATA Ø Leading indicators selection and their direct or indirect influence on credit and market risks Ø Warning signals on macroeconomics deterioration (Market and non market linked)EXERCISE 3: Risk assessment of the benchmark bank’s country GROUP CONCLUSION ON PART 2 PART 3: FINANCIAL ANALYSIS (CAMELS) Section 1: LIQUIDITY TESTING Section 2: PROFITABILITY ANALYSIS Section 3: ASSET QUALITY STRESS Section 4: CAPITAL ADEQUACY SECTION 1: LIQUIDITY TESTING Ø Focus on refinancing risk EXERCISE 4 SECTION 2: PROFITABILITY ANALYSIS Ø Focus on profitability after cost of risk EXERCISE 5 SECTION 3: ASSET QUALITY STRESS Ø Focus on default probabilities and loss given at default assumptions by asset categories Ø compared to balance sheet impaired assets and NPL calculated ratios Ø Use of result as a WARNING SIGNAL EXERCISE 6 Day 2 SECTION 4: CAPITAL ADEQUACY Ø Focus on the minimum required capital as a function of the bank’s risk profile EXERCISE 7 PART 4: RECAPITALISATION ISSUES Ÿ Focus on shareholders and regulator intervention capacities GROUP FINAL RECOMMENDATION Ÿ Seminar Evaluation T : + 91-80-41241378 F : + 91-80-4126 3672 C : Zayeem Ahmed E-mail : trainings@maximevents.in

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