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Fundamentals of Bank Financial Statement Analysis

Fitch Learning
Training overview
Professional Course
2 days
From 1,795 GBP
2,595 USD
Start dates
Online
1,795 GBP
Live Online - 18-19 May, 9:00-17:00 BST (Europe)

Online
2,595 USD
Live Online - 11-12 May, 9:00-17:00 EST (Americas)

Online
2,595 USD
Live Online - 11-12 May, 9:00-17:00 SGT (APAC)

Course description

*With many businesses now working from home, we have introduced virtual learning so we can continue to deliver high quality training to the financial community as we accommodate this new way of working. Since 2003, Fitch Learning has been delivering virtual learning programs to clients and learners. Building on this extensive experience, we are now able to offer a range of public courses in a live online environment, whilst ensuring you will get the same value as you would in our classroom courses.

Fundamentals of Bank Financial Statement Analysis

This course can either be taken in a classroom environment or live online. Get in touch to find out more.

This interactive course provides participants with an understanding of the key performance indicators and main balance sheet and income statement accounts for banks.

This course gives 16 CPD hours.

Who should attend?

This course is designed for analysts who have limited or no experience in the analysis of financial statements for financial institutions.

Training content

Day One

Analytic Overview

Structured approach to analysis

  • Defining CAMELS within the context of overall bank analysis

Types of financial institution

  • 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

Business Risk

Asset quality

The aim of this section is to consider the asset quality of a bank and use key ratios to understand a banks’ 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
  • Trading and investments: securities and derivatives portfolios
  • Local and international benchmarks for key ratios and performance indicators
  • Exercises:
    • Problem loan definitions
    • Matching asset quality ratios
  • Illustration case study: Asset quality ratio analysis

Sensitivity to market risk

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

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

Day Two

Financial Risk

Liquidity and funding

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 securitization
  • 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 ratios

Capital adequacy

The aim of this section is to appreciate the various types of capital and use key ratios to assess the adequacy of a banks’ 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 one 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

About Fitch Learning

Fitch Learning

*With many businesses now working from home, we have introduced virtual learning so we can continue to deliver high quality training to the financial community as we accommodate this new way of working. Since 2003, Fitch Learning has been delivering...


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Reviews

Average rating 4.8

Based on 4 reviews.

Julius Eshobarr
(4)
Positive experience. Interesting, intriguing and eye-opening. Sparked a lot of interest as a newcomer to finance.
Kazumi Sashida
(5)
Excellent !! I wish I had taken this course much earlier! Great mix of theory, case study, drills and Q&A
Thomas Darby
(5)
Very useful and informative course and very well delivered with expert knowledge demonstrated throughout
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Training reviews
Course rating
(4.8)
Based on 4 reviews.

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