New York City (NYC)

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Course details

Analyzing and Forecasting Banks Performance

This program covers how banks make money and how their business model is represented in banks’ financial statements. Delegates analyze a real set of accounts for a case bank and forecast future performance given a set of assumptions.

 

Learning outcomes

  • How do banks make money?
  • Structure of banks’ balance sheet
  • Structure of banks’ income statement
  • Difference between accrual and fair value accounting
  • Structuring a forecasting and valuation model for a bank
  • Input historical results
  • Forecasting the loan book
  • Forecasting the trading book
  • Forecasting the funding need and mix of deposit and non-deposit funding
  • Forecasting net interest income, net fee income and trading gains
  • Forecasting loan loss impairment allowance and impairment charges
  • Forecasting operating expenses
  • Completing the income statement
  • Linking the income statement to the balance sheet
  • Reality check of forecasts: key performance ratios for banks

Regulation and Valuation

Regulatory capital is a bank specific topic which is at the core of understanding banks’ business model and valuation. Delegates learn how to quantify regulatory capital available and risk weighted assets. The course concludes with a review of the key valuation methods for banks and delegates complete a dividend discount model of the case bank.

 

Learning outcomes

  • Overview of the regulatory framework
  • Calculation of regulatory capital available: core tier 1, tier 1, and total capital and role of hybrid securities
  • Calculation of risk weighted assets: credit risk, market risk and operational risk
  • Minimum capital ratios and target capital ratios to maintain/achieve target credit rating
  • Additional risk measures: leverage ratios based on common tangible equity
  • Extracting historical and forecasting future capital ratios for case bank
  • Calculating capital surplus/shortfall for case bank
  • Review of bank valuation methods: trading multiples vs. fundamental valuation
  • Bank trading multiples: P/E, P/BV, P/tangible BV and dividend yield
  • The dividend discount model
  • Cost of equity for banks
  • Forecasting potential dividends over explicit forecast period for case bank
  • Approaches to estimation of terminal value
    • Straight perpetuity formula and sensitivity to long term growth rates
    • P/BV and sensitivity to long term growth rates
  • Impact of the Basel III on banks valuation
"Using AMT Online (AMTO) was excellent as it allowed me to work through the course material at my own pace. AMT Online was very easy to use and navigate through." ~ graduate, leading business school

What will you receive on the course?

While this is a face to face training course, a blended learning approach is taken and delegates will be provided with access to AMT Online. Our study materials contain both the knowledge and practice materials required to assist with the learning process and help you in your job role. Course materials include:

 

  • printed course binder with copy of the slides
  • laminated summary sheets
  • 24/7 access to DELTA online learning environment
  • class recordings
  • course notes
  • quizzes
  • electronic homework/study files

Who should attend the course?

  • New hires who have joined the firm late and missed the in-house program
  • Individuals looking to fill a knowledge gap
  • Experienced bankers looking to refresh their technical skills
  • Teams employed in financial strategy roles from non-banking corporations
  • Graduates preparing to interview for a role in the finance sector
  • Students at business school and looking for a career in finance

NB.

This course is non-residential. The venue will provide light refreshments. AMT reserve the right to cancel or postpone sessions or change content if registrations are insufficient to continue 2 weeks prior to scheduled commencement date. Registrants will be given at least 5 business days’ notice of such changes.