im电竞游戏入口官网(im电竞游戏选手2.5.7): Live Online

This course is six hours per day. Please get in touch for exact start and finish times for a particular course date.​

im电竞游戏入口官网(im电竞游戏选手2.5.7) Objectives  CPD Certified

A three day intensive, modelling course offering a structured approach to building a robust bank forecasting model and carrying out sensitivity analysis. 

Key Learning Outcomes:  

  • Plan and design a fully integrated bank valuation model
  • Extract financial data from the annual reports and normalise these for forecasting purposes
  • Understand the relationship of the key assets and liabilities on a bank’s balance sheet and derive an income statement and model a detailed loan portfolio 
  • Add detailed scenario flexibility and model equity distribution within the constraints of regulatory capital requirements.

​Target Audience

This course is suitable for equity analysts and investors, M&A and finance professionals working on model building and analyzing banks.

Day One
Analytic Overview

The aim of this section is to set out the parameters of how to build and run a flexible and robust financial model which can be used to run numerous scenarios.

  • Key steps to setting up a model; good and bad practice
  • Understanding the structure of a model; inputs, workings and outputs
  • Scope limitations: output requirements versus input source
  • Model plan
  • Workbook setup
  • Inputting base data
  • Setting up date flexibility throughout the model using date functions
Building Financials

The aim of this section is to build financials within the model using normalised historicals for the inputs.

  • Deciding which key lines to have in the model’s financial statements
  • Entering and normalizing the historical figures
  • Review the structure of the model
  • Reconciling the financials and creating a robust model providing the foundations for forecasting
Building the Balance Sheet

The aim of this section is for the participants to build the balance sheet structure of their forecasting model.

  • Establishing the loan portfolio
    • Drivers of growth of the loan book
    • Non-performing loans and provisions for credit loss
  • Trading assets & investments
    • Securities held for trading and investment
    • Cash and central bank balances
  • Liquid assets
  • Deposits
    • Drivers and limitations of deposit growth
  • Wholesale sources of funding
    • Money markets versus capital markets
  • Equity
  • Estimating regulatory capital requirements for the balance sheet
  • Reconciling the financials and creating a robust model providing the foundations for forecasting
Day Two
Deriving the Income Statement

The aim of this section is to take the balance sheet for each forecasting period derived earlier and use it to establish an income statement for each accounting period.

  • Net interest margin
    • Establishing interest rate scenarios
    • Setting appropriate margins for assets and liabilities
    • Dealing with interest rate hedging
  • Fee and commission income
    • Establishing the drivers of core fee and commission income; new business related, back-book related and transactional income
    • Drivers of other lines of business income; asset management, insurance and investment banking
  •  Credit losses
    • Accounting entries in the loan provisioning, write-off and recovery cycle
    • Utilizing non-performing loan forecasts and write off-rates to establish a cost of provisioning for the income statement
  • Costs
    • Drivers of costs in banking business models
    • Differentiating fixed and variable costs 
    • Establishing a cost forecast for the business model
  • Other income statement items
    • Estimating tax rates
    • Establishing a dividend pay-out rate
    • Other income statement items; extraordinary items, discontinued business lines
  • Linking the income statement to the balance sheet
    • Retained earnings
    • Impact upon liquid assets
Key Ratios and Measuring Key Performance Indicators (KPI’s)

The aim of this section is to provide participants with the ability to model typical bank KPI’s from the financial statements they have built in the previous sections.  These ratios can then be used to evaluate the integrity of the model, facilitate interpretation of the model and enable comparison against peer institutions.

  • Asset quality indicators
    • Non-performing loan ratio
    • Coverage ratio
    • Provisioning and write-off ratios
    • Net non-performing loan measures
  • Liquidity measures
    • Minimum risk asset and liquid asset measures
    • Comparing liquid assets to total assets, deposits and funded liabilities
    • Cross balance sheet ratios; loan to deposits, inter-bank, liquid assets to wholesale funding
    • Measures of funding concentration
  • Capital ratios
    • Regulatory capital ratios; Core Tier 1 and Tier 1
    • Net and gross leverage ratios, estimating the leverage ratio
    • Capital formation rate
  • Profitability measures
    • Net interest margin
    • Return on assets and return on equity
    • Efficiency ratios; cost to income and cost to asset
  • Graphical representation of model outputs and efficient building of charts within the model structure.
Day Three
Bank Valuation and Cost of Equity
The aim of this section is to review the bank valuation and equity outputs of the model and review quality controls.
  • Equity; multiple versus cash flow valuation, price to book multiples
  • DDM
  • FCFE
  • Terminal value estimates
  • Valuation: key sanity checks
  • CAPM
  • Finding and evaluating the input data
  • Risk free rates
  • Equity market risk premiums
Scenario Analysis and Stress Testing Outputs
The aim of this section is to test model inputs, review scenario analysis and look at stress testing assumptions. 
 
Data (sensitivity) tables
  • Data tables are very useful in testing sensitivity of various inputs to a model.  
  • 2-dimensional data tables
  • Efficient techniques for updating data tables as inputs change
Building a scenario manager and switch
  • Adding flexibility so the model can be run under different net interest margin scenarios  or macroeconomic drivers– i.e. base, upside, downside, management 
  • Introducing CHOOSE, INDEX, SUMIF VLOOKUP, HLOOKUP, OFFSET and MATCH functions
  • Drop down menus/Visual basic tools to enable the efficient switching between different scenarios will be introduced