Looking back in time for benchmarking - developing countriesSokrates advisors
Due diligence benchmarks often involve the identification of reasonably similar situations in the past to compare and evaluate future outcomes. An application to telecom due diligence in developing countries in general and sub-Saharan Africa in particular.
Analyzing Financial Projections as Part of the ESOP Fiduciary Process | Appra...Mercer Capital
In recent years there has been increasing concern among ESOP sponsors and professional advisors (trustees, TPAs, business appraisers, legal counsel) regarding the scrutiny of the DOL, the Employee Benefits Security Administration (“EBSA”), and the Internal Revenue Service (“IRS”). These entities (and agencies thereof) are tasked with ensuring that ESOPs comply with the Employee Retirement Income Security Act (“ERISA”) as well as with various provisions of the federal income tax code concerning qualified retirement plans (including ESOPs). Citing concerns for poor quality and inconsistency in business appraisals, the DOL has sought in recent years to expand the meaning of “fiduciary” under ERISA to include business appraisers. In the most recent forums of exchange and deriving from various court actions, there are numerous areas of concern that DOL/EBSA appear to have regarding ESOP valuations.
This paper focuses on the use of financial projections in ESOP valuations. The use (or misuse) of financial projections is often the most direct cause of over- or under-valuation in ESOPs.
Understanding and validating the uses of machine learning modelsJacob Kosoff
WHILE MACHINE LEARNING (ML) CAN OFFER THE BENEFIT OF IMPROVED MODEL RESULTS, A BANK SHOULD CONSIDER WHETHER IT IS APPROPRIATE TO ACCEPT THE ADDITIONAL COMPLEXITY, AS WELL AS THE TESTING AND MONITORING, INVOLVED. THIS ARTICLE DISCUSSES BEST PRACTICES IN PERFORMING VALIDATIONS OF MACHINE LEARNING MODELS.
Written by Shannon Kelly of Zions Bank, Jacob Kosoff of Regions Bank, Agus Sudjianto of Wells Fargo, and Aaron Bridgers of Regions Bank.
In this study we survey practices and supervisory expectations for stress testing (ST), in a credit risk framework for banking book exposures. We introduce and motivate ST; and discuss the function, supervisory requirements and expectations, credit risk parameters, interpretation results
with respect to ST. This includes a typology of ST (uniform testing, risk factor sensitivities, scenario analysis; and historical, statistical and hypothetical scenarios) and procedures for con-ducting ST. We conclude with two simple and practical stress testing examples, one a ratings migration based approach, and the other a top-down ARIMA modeling approach.
Banks are scrambling to meet with IFRS 9 guidelines and are setting down on the path to implement various ECL estimation methodologies and models. But a topic that hasn’t been given enough attention is the need for governance of these models and the attendant model risk management framework that needs to be set up to lend credibility to the model estimates. This blog touches upon the need for validation of models and how model risk governance has become paramount in view of the new guidelines.
Looking back in time for benchmarking - developing countriesSokrates advisors
Due diligence benchmarks often involve the identification of reasonably similar situations in the past to compare and evaluate future outcomes. An application to telecom due diligence in developing countries in general and sub-Saharan Africa in particular.
Analyzing Financial Projections as Part of the ESOP Fiduciary Process | Appra...Mercer Capital
In recent years there has been increasing concern among ESOP sponsors and professional advisors (trustees, TPAs, business appraisers, legal counsel) regarding the scrutiny of the DOL, the Employee Benefits Security Administration (“EBSA”), and the Internal Revenue Service (“IRS”). These entities (and agencies thereof) are tasked with ensuring that ESOPs comply with the Employee Retirement Income Security Act (“ERISA”) as well as with various provisions of the federal income tax code concerning qualified retirement plans (including ESOPs). Citing concerns for poor quality and inconsistency in business appraisals, the DOL has sought in recent years to expand the meaning of “fiduciary” under ERISA to include business appraisers. In the most recent forums of exchange and deriving from various court actions, there are numerous areas of concern that DOL/EBSA appear to have regarding ESOP valuations.
This paper focuses on the use of financial projections in ESOP valuations. The use (or misuse) of financial projections is often the most direct cause of over- or under-valuation in ESOPs.
Understanding and validating the uses of machine learning modelsJacob Kosoff
WHILE MACHINE LEARNING (ML) CAN OFFER THE BENEFIT OF IMPROVED MODEL RESULTS, A BANK SHOULD CONSIDER WHETHER IT IS APPROPRIATE TO ACCEPT THE ADDITIONAL COMPLEXITY, AS WELL AS THE TESTING AND MONITORING, INVOLVED. THIS ARTICLE DISCUSSES BEST PRACTICES IN PERFORMING VALIDATIONS OF MACHINE LEARNING MODELS.
Written by Shannon Kelly of Zions Bank, Jacob Kosoff of Regions Bank, Agus Sudjianto of Wells Fargo, and Aaron Bridgers of Regions Bank.
In this study we survey practices and supervisory expectations for stress testing (ST), in a credit risk framework for banking book exposures. We introduce and motivate ST; and discuss the function, supervisory requirements and expectations, credit risk parameters, interpretation results
with respect to ST. This includes a typology of ST (uniform testing, risk factor sensitivities, scenario analysis; and historical, statistical and hypothetical scenarios) and procedures for con-ducting ST. We conclude with two simple and practical stress testing examples, one a ratings migration based approach, and the other a top-down ARIMA modeling approach.
Banks are scrambling to meet with IFRS 9 guidelines and are setting down on the path to implement various ECL estimation methodologies and models. But a topic that hasn’t been given enough attention is the need for governance of these models and the attendant model risk management framework that needs to be set up to lend credibility to the model estimates. This blog touches upon the need for validation of models and how model risk governance has become paramount in view of the new guidelines.
Adopting a Top-Down Approach to Model Risk Governance to Optimize Digital Tra...Jacob Kosoff
Model risk management programs often began their journey by first creating a definition of a model. Then model risk groups would perform model risk activities on each item that met the definition of a model. These model risk activities include classifying risk, assessing current uses, evaluating ongoing monitoring results, validating conceptual soundness, testing model changes, and so forth. This approach was an important beginning for the field of model risk management as it helped identify existing models, discover fundamental errors in existing models, and prevent inappropriate use of models. However, model risk teams often focused only on processes that already include models and did not identify processes that would be significantly improved by using models. This results in model risk teams overlooking modeling capabilities that a process truly needs. However, model risk teams can go on the offensive and use their model inventory as a source of crucial business intelligence. Model risk teams can start to identify processes that do not include models and could recommend the use of existing models to improve those processes. Furthermore, model risk teams can reduce expenses at a bank by guarding against the development or purchase of models with redundant capabilities. Model risk management teams can ultimately be a champion for the extensibility and efficient use of models at an institution. The article was written by Jacob Kosoff, Aaron Bridgers, and Henry Lee. The article was published by the RMA Journal in September 2020.
Regulatory scrutiny has significantly increased and has prompted banks to develop complex models at the lowest level of granularity to capture the impact of economic cycles. Segmentation is one of the first steps in establishing a quantitative basis for the enterprisewide scenario analysis of stress testing.
Strategic implications of IFRS9 oliver wymanGeoff Holmes
IFRS9 will fundamentally change the level and dynamics of credit provisions, and will result in significantly diminished returns for some segments. To date, most banks have focussed on ensuring compliance, but with the 2018 implementation deadline approaching attention is turning to understanding and mitigating the impacts.
IFRS9 materially impacts lending economics, particularly for consumer credit and SME products where some segments will be significantly less attractive than today. Given all lenders are affected, this represents a challenge and an opportunity. Those who develop their responses early and optimise their actions stand a good chance of getting ahead of the competition.
The paper attached examines how IFRS9 impacts profitability, where the effects are most material, and how lenders can respond.
Continuing with our updates on the key aspects of IFRS 9 Implementation, our current post (attached) talks about “Exposure at Default (EAD)” where, possible uses and business interpretation nuances of terms linked to EAD are highlighted. The post enumerates on the computation methods of EAD and the modeling approaches available for each of the methods with key consideration points from Basel and IFRS9 perspectives highlighted in between for the readers.
We look forward to your valuable feedback on the current article or the challenges faced by you in IFRS9 implementation.
Continuing with our updates on the key aspects of IFRS 9 Implementation, our current post (attached) talks about “IFRS 9 Impairment Solution”. The post aims to provide key insights, which might assist banks’ in selecting a strategic solution that will future-proof the investment towards successful IFRS 9 implementation. The post enumerates on the key desirable features both from functional and technical viewpoints, which a strategic IFRS 9 solution should possess and will benefit our readers to make an important choice.
Agile FINANCIAL TIMES November 2009
CUSTOMER SPOTLIGHT - Reliance Mutual Fund
Business Intelligence in BFSI - by Sanjay Mehta, CEO, MAIA Intelligence P. Ltd.
SOLUTION SPOTLIGHT - 1KEY Agile BI Suite
De afgelopen maanden heb ik met veel CFO´s gesproken over de transformaties die hun Finance Organisatie moet doormaken om aan de veranderende eisen en wensen van Executives, managers en stakeholders te voldoen. Ligt hun focus momenteel nog op transactionele core finance activiteiten, voor de nabije toekomst is het hun ambitie om bedrijfsbreed veel meer waarde te leveren op het gebied van analyse en beslissingssupport.
Bedrijven die goed scoren op Finance Efficiëncy alsmede in staat zijn om betrouwbare Business Insight te leveren aan de diverse business units, zijn volgens de IBM Global CFO Survey 2010 aantoonbaar succesvoller op het gebied van omzetgroei, EBITDA en Retun of Invested Capital.
Ik wil graag de uitkomsten van 1500 face-to-face interviews met CFO´s met jullie delen, daarom ´share´ ik het rapport ´The New Value Integrator – Insights from the CFO Survey´.
Who is increasingly instrumental in helping CEOs and Boards make high-impact decisions – the choices and trade-offs that build or destroy enterprise value? CFOs.
Based on input from more than 1,900 CFOs and senior Finance leaders worldwide, the IBM Global CFO Study indicates that the demands on CFOs are rising and extend well beyond traditional financial control and supervision.
But in a constantly changing environment, how can CFOs provide their enterprises with a competitive edge? How can they help the business make not just faster but smarter decisions?
In the 2010 study, one group of Finance organizations – called Value Integrators – consistently outperforms their peers. They are not only more effective, but their enterprises also perform better financially.
Their secret? Driving a combination of two key capabilities – Finance efficiency and business insight – across their organizations. Although study results show that each capability provides important benefits, the highest performers excel at both.
Read the study to learn more about this multiplier effect and how to create it within your own organization.
A Complete View of the Enterprise: Linking Operational and Financial PlanningFindWhitePapers
Read this white paper from CFO Research Services, which examines why and how chief financial offers are looking to create "highly integrated" organizations by moving from standalone spreadsheets to integrated planning, budgeting, and forecasting systems. (CFO Research Services, 2008)
Study initiated and realized together with IBM . Goal was to share the value , the decisions criterias, the KPI used and the success factors of an ERP implementation at 8 SME companies
Measuring the Blended Value of Corporate Social Responsibility and Social Ent...Karim Harji
Presentation to the Canadian Evaluation Society Annual Conference, Ottawa, June 2, 2009
Innovative evaluation methods and tools are emerging in the fields of corporate social responsibility (CSR) and social enterprise. The focus of these innovations is the measurement of the “blended value” (financial, social and environmental) that is created by CSR and social enterprise, which is of interest to social investors, “philanthrocapitalists” and governments.
This panel will summarize findings-in-process from ongoing applications in these spheres in Ontario, Ghana and other developing-world settings. There are advantages and challenges in applying “blended value” approaches that the presenters will examine. The panelists will also discuss the implications of these findings for the theory and practice of evaluation.
Adopting a Top-Down Approach to Model Risk Governance to Optimize Digital Tra...Jacob Kosoff
Model risk management programs often began their journey by first creating a definition of a model. Then model risk groups would perform model risk activities on each item that met the definition of a model. These model risk activities include classifying risk, assessing current uses, evaluating ongoing monitoring results, validating conceptual soundness, testing model changes, and so forth. This approach was an important beginning for the field of model risk management as it helped identify existing models, discover fundamental errors in existing models, and prevent inappropriate use of models. However, model risk teams often focused only on processes that already include models and did not identify processes that would be significantly improved by using models. This results in model risk teams overlooking modeling capabilities that a process truly needs. However, model risk teams can go on the offensive and use their model inventory as a source of crucial business intelligence. Model risk teams can start to identify processes that do not include models and could recommend the use of existing models to improve those processes. Furthermore, model risk teams can reduce expenses at a bank by guarding against the development or purchase of models with redundant capabilities. Model risk management teams can ultimately be a champion for the extensibility and efficient use of models at an institution. The article was written by Jacob Kosoff, Aaron Bridgers, and Henry Lee. The article was published by the RMA Journal in September 2020.
Regulatory scrutiny has significantly increased and has prompted banks to develop complex models at the lowest level of granularity to capture the impact of economic cycles. Segmentation is one of the first steps in establishing a quantitative basis for the enterprisewide scenario analysis of stress testing.
Strategic implications of IFRS9 oliver wymanGeoff Holmes
IFRS9 will fundamentally change the level and dynamics of credit provisions, and will result in significantly diminished returns for some segments. To date, most banks have focussed on ensuring compliance, but with the 2018 implementation deadline approaching attention is turning to understanding and mitigating the impacts.
IFRS9 materially impacts lending economics, particularly for consumer credit and SME products where some segments will be significantly less attractive than today. Given all lenders are affected, this represents a challenge and an opportunity. Those who develop their responses early and optimise their actions stand a good chance of getting ahead of the competition.
The paper attached examines how IFRS9 impacts profitability, where the effects are most material, and how lenders can respond.
Continuing with our updates on the key aspects of IFRS 9 Implementation, our current post (attached) talks about “Exposure at Default (EAD)” where, possible uses and business interpretation nuances of terms linked to EAD are highlighted. The post enumerates on the computation methods of EAD and the modeling approaches available for each of the methods with key consideration points from Basel and IFRS9 perspectives highlighted in between for the readers.
We look forward to your valuable feedback on the current article or the challenges faced by you in IFRS9 implementation.
Continuing with our updates on the key aspects of IFRS 9 Implementation, our current post (attached) talks about “IFRS 9 Impairment Solution”. The post aims to provide key insights, which might assist banks’ in selecting a strategic solution that will future-proof the investment towards successful IFRS 9 implementation. The post enumerates on the key desirable features both from functional and technical viewpoints, which a strategic IFRS 9 solution should possess and will benefit our readers to make an important choice.
Agile FINANCIAL TIMES November 2009
CUSTOMER SPOTLIGHT - Reliance Mutual Fund
Business Intelligence in BFSI - by Sanjay Mehta, CEO, MAIA Intelligence P. Ltd.
SOLUTION SPOTLIGHT - 1KEY Agile BI Suite
De afgelopen maanden heb ik met veel CFO´s gesproken over de transformaties die hun Finance Organisatie moet doormaken om aan de veranderende eisen en wensen van Executives, managers en stakeholders te voldoen. Ligt hun focus momenteel nog op transactionele core finance activiteiten, voor de nabije toekomst is het hun ambitie om bedrijfsbreed veel meer waarde te leveren op het gebied van analyse en beslissingssupport.
Bedrijven die goed scoren op Finance Efficiëncy alsmede in staat zijn om betrouwbare Business Insight te leveren aan de diverse business units, zijn volgens de IBM Global CFO Survey 2010 aantoonbaar succesvoller op het gebied van omzetgroei, EBITDA en Retun of Invested Capital.
Ik wil graag de uitkomsten van 1500 face-to-face interviews met CFO´s met jullie delen, daarom ´share´ ik het rapport ´The New Value Integrator – Insights from the CFO Survey´.
Who is increasingly instrumental in helping CEOs and Boards make high-impact decisions – the choices and trade-offs that build or destroy enterprise value? CFOs.
Based on input from more than 1,900 CFOs and senior Finance leaders worldwide, the IBM Global CFO Study indicates that the demands on CFOs are rising and extend well beyond traditional financial control and supervision.
But in a constantly changing environment, how can CFOs provide their enterprises with a competitive edge? How can they help the business make not just faster but smarter decisions?
In the 2010 study, one group of Finance organizations – called Value Integrators – consistently outperforms their peers. They are not only more effective, but their enterprises also perform better financially.
Their secret? Driving a combination of two key capabilities – Finance efficiency and business insight – across their organizations. Although study results show that each capability provides important benefits, the highest performers excel at both.
Read the study to learn more about this multiplier effect and how to create it within your own organization.
A Complete View of the Enterprise: Linking Operational and Financial PlanningFindWhitePapers
Read this white paper from CFO Research Services, which examines why and how chief financial offers are looking to create "highly integrated" organizations by moving from standalone spreadsheets to integrated planning, budgeting, and forecasting systems. (CFO Research Services, 2008)
Study initiated and realized together with IBM . Goal was to share the value , the decisions criterias, the KPI used and the success factors of an ERP implementation at 8 SME companies
Measuring the Blended Value of Corporate Social Responsibility and Social Ent...Karim Harji
Presentation to the Canadian Evaluation Society Annual Conference, Ottawa, June 2, 2009
Innovative evaluation methods and tools are emerging in the fields of corporate social responsibility (CSR) and social enterprise. The focus of these innovations is the measurement of the “blended value” (financial, social and environmental) that is created by CSR and social enterprise, which is of interest to social investors, “philanthrocapitalists” and governments.
This panel will summarize findings-in-process from ongoing applications in these spheres in Ontario, Ghana and other developing-world settings. There are advantages and challenges in applying “blended value” approaches that the presenters will examine. The panelists will also discuss the implications of these findings for the theory and practice of evaluation.
Best Practices in Creating a Strategic Finance FunctionFindWhitePapers
Many CFOs and the finance organizations they lead have started to take on new strategic roles within the enterprise. Their goal is to enforce stricter control processes to ensure legal and regulatory compliance, offer strategic insights into the internal and external business environment, and connect the business strategy with daily operations through performance tracking.
Building a Holistic Capital Management FrameworkCognizant
For banks, capital management strategy is a complex process that must take into account a vast range of regulatory and financial factors. Adopting the holistic approach detailed here will enable banks to provide sustainable value to their clients.
In their relatively short history, Indian captives — foreign-owned operational units — have experienced a mixed record of success and failure. A new set of studies by ISG finds that both legacy and new captives are embracing emerging business models aimed at unlocking previously untapped business value. We call this trend “Captive 2.0.”
A white paper on the unique Service Oriented Architecture benefits of ARMnet Financial Software in the financial product management space. Using a client centric CIF file ARMnet is capable of managing any financial product for loan or mortgage origination and servicing, lease or fleet management, wealth or deposit management institutions.
1. Get the right data and analysis to prepare your Marketing, Sales and
Credit Risk strategy
ICAP Romania
Your business partner
ICAP Romania is specialized in providing Credit Risk
services helping companies and banking-financial
institutions to identify and better manage the risk
involved in commercial transactions.
Since September 2011, ICAP extends its activity
thanks to the partnership signed with Dun &
Bradstreet (D&B), worldwide leader in providing
Credit Risk and Business Information Services.
Sector Analysis
Agriculture in Romania
January 2012
1
2. Why ICAP Agriculture Sector Study?
Complete understanding of the Sector
Tridimensional Approach of the Sector
Financial indicators
The Sector Study analyzes the
main financial indicators of each (calculated based on most
recent available data)
peer group
(Large, Medium, Small, Micro) to
the overall weighting of the
Sector. The comparison with last
year’s findings provides further
insight into changes of the Risk
surface of each particular peer
group.
Geographical Distribution based on
distribution type of companies
The Sector Study is an useful tool for companies
aiming to invest in one sector, wanting to position
themselves versus their peer group
(Large, Medium, Small, Micro) and to check the
existing competition, industry insights etc.
2
4. Why ICAP Agriculture Sector Study?
Added Value: Risk Rating evolution
The analysis is taking into account the
evolution of the Sector based on ICAP
Risk Rating results and provides a
global picture of the Sector in terms of
numbers and percentage of
companies that changed - positively
and negatively - or unchanged their
financial position.
ICAP Group is accredited as:
Rating Tool Source provider, by the
European Central Bank, for the purpose
of the Euro System Credit Assessment
Framework;
External Credit Assessment Institution
(ECAI) by the Central Bank of Greece, in
regards to the New Regulatory
Framework of Basel II.
Benefits:
in-depth analysis of potential
customers
set credit limits
protect your activity and cash-flow
optimize the use of resources in
terms of time and personnel
4
5. Why ICAP Agriculture Sector Study?
Added Value: Status evolution
The analysis of the Status -
Recom, ANAF, Insolvency –
reflects the evolution for 2
years period of time for the
companies within Agriculture
Sector.
Benefits:
Overall structure of the
Sector in terms of Recom Status to know how
activity/inactivity of the many companies are active, in
liquidation, under juridical
companies dissolution, closed, in bankrupcy
Identifying the number of
companies affected by
negative events
(insolvency, bankruptcy, etc.)
ANAF Status useful information in
order to understand how many
companies are active - VAT
registered, inactive – because no fiscal Insolvency Status to highlight
submission made – or reactivated the number of companies
registered with insolvency
procedures
5
6. Why ICAP Agriculture Sector Study?
Added Value: Short and Medium term solutions
Issues identified Recommendations Best management
decisions
The analysis is also providing an
useful output by:
• Focusing on the main issues
identified on:
Risk Rating
Days Sales Outstanding and
Days Debt Payments Outstanding
Statuses distribution
• Providing ICAP
recommendations in order to
size your management actions
and decisions
6
7. Thank you for choosing ICAP Romania as your business partner
Package Delivery:
Pdf/ppt file (Office 2007, 107 pages)
Excel file with 2010 financial data (Office 2007)
Delivery time: 5 working days
ICAP ROMANIA S.R.L MANAGEMENT CONSULTING DEPARTMENT
Global City Business Park, 10 Road Bucuresti-Nord, Building O21, Floor 4 Voluntari, Ilfov,
Tel: +40 21 206 26 78, Mobil: +40 733 68 28 01,
e-mail: mc@icap.ro, www.icap.ro
Adrian Marcu Andreea Bazac
Sales Consultant Financial Analyst
a.marcu @icap.ro abazac@icap.ro
+ 40 741 55 00 11 +40 21 206 26 78
7
