Analyzing Complex Banks

Duration: 2 Days ・ CPD Points: 16 ・ Level: Advanced

This course delivers expert-level proficiency in analyzing and quantifying risks within the sophisticated financial structures of global banks, particularly in broker-dealer activities and securitization.

Delivery Method Classroom
Location London
Dates 3-4 Apr 25
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Course Details

The objective of this course is to drill down into the financial statements of banks operating globally with universal, less standard business models to identify and quantify the risks of more complex business lines, such as broker dealer activity and securitization.

Key Learning Outcomes:

  • Recognize how and the extent to which more complex banking businesses are reflected in the balance sheet and how the risk profile is evidenced in the income statement
  • Identify and quantify exposures where all or part of the exposure is off-balance sheet, including derivatives and structured finance vehicles
  • Understand how the new accounting and reporting conventions under both US GAAP and IFRS impact differently the financial statements of global investment and trading banks
  • Use the information provided to evaluate the bank's risk profile and appetite
  • Recognize best practice in financial reporting, including new GAAP / IFRS requirements and Basel II Pillar III disclosures

Course Content

Analytic Overview

The goal of this section is to recognize when it is necessary to go beyond traditional ratio analysis for a bank and focus on the risk profile of more complex activities.

Analytic issues

  • Complex banking activities: business models and risk profiles
  • Analytic challenges – ratio analysis

Credit Risk

The goal of this section is to review the risk profile, accounting and financial analysis of more complex lending exposures, in particular commitments, loans at fair value and credit derivatives.

Product risk overview

  • Loan and loan commitments; contingent liabilities

Financial statement analysis and accounting

  • Fair valuation and cost plus impairment techniques; banks who use a mix of fair value and cost accounting
  • Using the financial statements to assess credit risk: insights and limitations of traditional impaired loans and provisioning ratios
  • Using Pillar III disclosures to analyse risk

Market Risk

The goal of this section is to review the risk profile, accounting and financial analysis of securities and derivatives exposures and the use of models and stress tests to evaluate them.

Product risk overview

  • Long and short positions in equities, bonds and commodities
  • Impact of derivatives on banking book credit risk: credit derivatives used for hedging
  • Quantifying counterparty risk: current and potential future exposure (PFE) calculations
  • Relating market risks to the success of the business model: key sensitivities to different markets

Financial statement analysis and accounting

  • Treatments of trading and hedging transactions under FAS 133 and IAS 39
  • Using the financial statements to assess trading and market risk
  • Reliance on, and volatility of, trading profits
  • Measuring VaR levels: benchmarking performance against peers
  • Other disclosures about market risk: back testing, stress testing, expected shortfall
  • Assessing derivatives counterparty exposure:

Structured Finance Transactions

  • Types of transaction: securitisation, other structured credit products, other off-balance sheet vehicles e.g. SIVs, ABCP
  • When and where structured finance assets and liabilities will come on-balance sheet

Financial Risk

The goal of this section is to review the risk profile, accounting and financial analysis of more complex funding sources, in particular repos, stock lending, client balances and different sources of capital. The section will include an update on Basel III capital and liquidity regulations.

Product risk overview

  • Financing transactions: stock borrowing and lending, repos and reverse repos, repo 105
  • Re-hypothecation of client balances - liquidity challenges
  • Relating transaction flows to liquidity
  • Legal structure: implications of double leverage
  • Capital: impact of key accounting issues e.g. deferred tax, unrealised gains, and losses etc
  • Acquisition accounting: impact of negative goodwill on earnings and capital

Financial statement analysis and accounting

  • Using the balance sheet to assess liquidity risk and capital adequacy
  • Off-balance sheet exposures and their implications; window dressing
  • Liquidity regulations: impact on disclosure
  • Capital adequacy: core and hybrid capital in Basel II and Basel III
  • Ratios: what they mean and how they should be used.

Who Should Attend?

Experienced analysts, regulators, risk and fixed income professionals with a good understanding of the analysis of financial institutions. This course is a follow-on from our intermediary level courses: Intensive Bank Analysis, Emerging Market Bank Analysis and Non-Bank Financial Institutions.

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Course Highlights

Real Case Studies

Real company case studies to test your newly learnt skills

CPD Recognized

This course is Continuous Professional Development (CPD) recognized

Highly Interactive

Highly interactive with small group size and industry expert trainers

Frequently Asked Questions

Currently, course can be taken either in an in-person setting or in a live online setting.

Our virtual live online courses are designed to keep the same levels of engagement and networking as our in-person courses. You will attend the course virtually on a set date, at a set time.

What time zones do the courses run in?
Currently, we run live online training across London, New York and Singapore time zones.

How are the courses delivered?
We deliver virtual training via Zoom.

What are the start times?
The courses will run during scheduled class times, and vary per course.

Reclaiming VAT
Most delegates who attend our courses in the UK are able to claim back their VAT once it has been paid. The below information details why we need to charge VAT and how you can claim it back.

Why does Fitch Learning charge VAT?
The EU VAT Directive (Council Directive 2006/112/EC) article 53 says that for the right of entry to cultural, artistic, sporting, scientific, educational, entertainment or similar events in exchange for a ticket or payment, the place of supply is where the event physically takes place. Since, the event is held in the UK, the place of supply is the UK and therefore UK VAT has to be charged.

How can you claim back the VAT you paid for a course?
The most efficient way to claim back VAT is directly through the UK’s HM Revenue and Customs (HMRC) by completing the required forms and sending back to HMRC.

Please follow the links below for further details;

EU businesses
Non-EU businesses
To claim back VAT or if you have any questions please contact HMRC;

Telephone - 0044 (0) 3000 537 381

Email Overseas Repayment Unit - enq.oru.ni@hmrc.gsi.gov.uk

On the Fitch Learning website you will find learning paths which will explain the courses available at different levels within a topic area. We would always prefer to speak with you to discuss which course is most appropriate rather than run the risk of you signing up for an inappropriate course. If you are unsure, please contact the Public Courses team:

Phone: +44 20 7496 8600
Email: enquiry@fitchlearning.com

All of our instructors are industry practitioners turned trainers. Their training style is case study based and interactive. They will coach, challenge and inform participants to ensure immediate and practical real-life application from the courses. To discuss our instructors further please email enquiry@fitchlearning.com

Class sizes are dependent on the course, but are small enough to permit active interaction and participation.

Q. Am I able to gain CPD/CE/CPE credits for my course?
A. We award continuing professional development credits for the following:

Global
CFA Institute
The CPD Certificate Service
UK
CFA Society
The CPD Certificate Service

Q. What do I need to do to receive my credits?
A. Please email enquiry@fitchlearning.com to request a certificate. Fitch Learning will send you a certificate stating how many points you are eligible for.

Q. How many credits will I receive?
A. We award 8 credits (7 for the CFA) for each day of training you attend.

You will be contacted by email within 2 working days of processing your registration to confirm your place on the course.

In order to optimise class time we ask participants to read some background information on the main illustration case(s) prior to attending the class. This also helps to ensure that all are able to participate in case discussions. In some cases additional background reading is provided. The length of pre-course reading is advised to participants in advance and typically ranges from 2-3 hours.

We try to send out the pre-course reading by email one week before the start of the course. There may be a delay in sending this out due either to late registrations or to the fact that the case study needs to incorporate recently-published financial information.

Q. If I am unable to attend can I send a substitute?
A. Absolutely and it is completely free of charge. We do however ask that we have at least 2 working days’ notice of this change before the course start date. Please email enquiry@fitchlearning.com with full contact details of the substitute and who they are replacing.

Q. Can I transfer my booked course to another date?
A. Yes you can. If you email us your request to transfer to the next available course date and give us more than 30 days’ notice, there will be no charge. If you notify us within 30 days of the course start date, there will be an additional payment of 25% of the course fee, provided the original course fee has been paid in full.
A transfer can only be made onto a course taking place within a period of 6 months of the original course date and only one transfer can be made in respect of any booking.

Q. Can I cancel my course booking?
A. Yes. If you email us with your request more than 30 days before the course start date, there will be no charge. If you notify us within 30 days of the course start date you are liable for the full course fees.

Q. What happens if I do not attend my course?
A. If you do not attend your course and you do not give us any prior notice you are liable for the full course fee and no refunds can be given.

Notice contact details:
Email: enquiry@fitchlearning.com

We can develop a customized training solution to meet your learners' needs - at all levels in your organization. Please email enquiry@fitchlearning.com for more information.

Please get in touch with us via email at enquiry@fitchlearning.com to request more information on running one of our courses in-house for larger groups.

Discount offers cannot be used in conjunction with each other or any other offer nor applied retrospectively to anyone already registered for any Fitch Learning course.

To speak to a member of our team, please get in touch via the below:
Phone: +44 20 7496 8600
Email: enquiry@fitchlearning.com

Q. How do I make a complaint?
A. Anyone who wishes to make a complaint may do so in writing. Complaints need not be made to the actual service which is the subject of the complaint. In the first instance complaints should be sent to Grace Heighington, Head of Public Courses.

Q. Where do I send my complaint?

A. Complaints can be submitted using the following options:
Email: enquiry@fitchlearning.com
Post: Grace Heighington, Fitch Learning, The Corn Exchange, 55 Mark Lane, London, EC3R 7NE
Wherever possible and appropriate, staff are requested to elicit from the complainant the nature of the complaint, as well as the actions the complainant feels are necessary to resolve the complaint.

Complaints Policy and Procedure
Q. What are the stages involved?

A. There are two main stages to our complaints procedure:

Stage 1 - We always try to resolve issues quickly. From the moment we receive your complaint, we must get back to you within three working days. At the very least we must acknowledge the problem in writing and give you the name of the person dealing with the complaint. We must give you a full reply within ten working days if possible, or keep you fully informed of the progress and reasons for delay.

Stage 2 - If you are not happy with the full response at Stage 1, please contact us again. One of the Managing Directors will then review the issue. You can expect our acknowledgement within three working days of us receiving your complaint. We will also explain how long the director's review will take.

What Our Customers Say

"Excellent, eye-opening, insightful and challenging.."

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