Advanced Credit Risk



£ 3001-4000


  • Type


  • Methodology


  • Class hours


  • Duration

    5 Days

  • Start date

    Different dates available

This course will enable delegates to manage and employ the tools used in credit risk & credit analysis to assess individual, sector and portfolio credit risks. It develops the understanding, implementation and employment of a comprehensive framework to assess the critical risk factors affecting corporate borrowers.

The course provides a detailed description of credit risk analysis, shows how it can be managed by an organisation and explores the key components underlying the process. The course also considers managing an expanding business portfolio as well as dealing with the challenges of recoveries.

At the end of the course, delegates will be able to manage and contribute to the process by which credit decisions are made and help to decide which critical risk factors are relevant to their marketplace. They will also be able to work comfortably with annual reports and use them as to assess risk on several levels, and will be fully conversant with financial statements, their purpose, uses, limitations and relevance.

Challenging case studies and exercises are used widely to ensure the training is interactive and practical.

Participants will be required to bring a laptop to the course.

This course can be delivered in-house to a team of people.

For further information about the course, trainer or to request a quote, please contact the center.



Start date


Start date

Different dates availableEnrolment now open

About this course

It is expected that participants will have some experience with business and financial services and should ideally have worked in a lending unit.

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  • Advanced credit risk
  • Finance
  • The Basel Accords
  • Concentration Risk
  • Loans
  • Mortgages
  • Trade Finance
  • Mitigating Credit Risk
  • Financial Reporting
  • Credit Committees

Teachers and trainers (1)

Former  Practitioner

Former Practitioner

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Course programme

Course Content:

Session 1: Introduction to Analysis

  • Course Objectives
  • Managing credit analysis
  • Setting the objectives and goals of the credit analyst team
  • Detailed approach to credit analysis, including individual, sector and portfolio risk
  • Predicting, managing and trading through Credit Cycles
  • Understanding and employing data derived from probability of default, loss given default and expected loss data
  • Setting the parameters for system analysis

Case study/example relevant to above

Session 2: Defining credit risk

  • The Basel Accords
  • What is credit risk?
  • The different types of credit risk
    • Sovereign
    • Corporate
    • Retail
    • Systemic
    • Counterparty
  • Concentration risk
  • Expected and unexpected losses

Case study/example relevant to above

Session 3: Advanced Review of Financial products

  • Loans and overdrafts
  • Government and corporate bonds
  • Equity and mezzanine debt
  • Credit derivatives
  • Counterparty exposure from traded products
  • Trade finance
  • Mortgages
  • Credit cards

Case study/example relevant to above

Session 4: Advanced Review of Mitigating and Managing Credit Risk

  • The credit time line
  • Bad debt, doubtful debt and default
  • Credit assessments and scoring
    • Corporate credit scoring
    • Retail credit scoring
  • Diversification and portfolio management
  • Securitization
  • Collateral
  • Credit derivatives
  • Netting
  • Cash flow monitoring
  • Recovery management

Case study/example relevant to above

Session 5: Financial ~Reporting

  • Detailed and in depth look at company accounts focusing on
  • Setting guidelines for key areas to focus on
  • IAS and its implications for credit risk analysis
  • Profit and loss accounts
  • Gearing
  • Liquidity
  • Debt servicing
  • The structure of balance sheets and peer group analysis
  • Managing, assessing and using cash flow statements as a useful analysis tool
  • Interpreting the Directors report
  • Understanding and interpreting the notes to the accounts

Case study/example relevant to above

Session 6: Financial Risk & Cash Flow Analysis

  • Using ratios as a working tool
  • Quick or rough and ready analysis
  • Setting guidelines for key ratios
  • Understanding cash flow and what it reveals
  • Calculating free cash flow and its relevance
  • Economic returns, Economic capital and building real shareholder value
  • In depth liquidity analysis using ratios and forecasts
  • The importance of positive working capital and the trading cycle
  • Stress testing profitability, gearing and cash flow leading to breakeven assumptions
  • Using selected financial ratios and recommending suitable lists to avoid overkill

Case study/example relevant to above

Session 7: Valuation

  • Techniques of company valuation
  • Valuations using various traditional methods
  • Valuation as a tool for credit analysis and its relevance
  • Understanding and managing concepts and problem issues
  • Appreciating the real cost of capital
  • Understanding and interpreting free cash flows
  • Introduction to discounted flows, NPV and DCF

Case study/example relevant to above

Session 8: Control of Assets

  • Pre loan
  • Drawdown
  • Post lending
  • Reporting
  • Reacting
  • Managing
  • Intervention
  • Foreclosure
  • Proposals

Case study/example relevant to above

Session 9: Credit Committees and Other Risk Controls

  • Credit committee
  • Lending limits and delegations
  • Sanctioning
  • Sector and other controls
  • Liquidity controls
  • Supervision
  • Statutory reporting

Case study/example relevant to above

Session 10: Pricing & Required Return

  • Risk/reward
  • Secured/unsecured
  • Return on capital
  • Liquidity
  • Short & medium term
  • Head office expectations

Case study/example relevant to above

Session 11: Sources of funding

  • Current accounts
  • Deposit and term accounts
  • Money markets
  • Inter bank markets
  • Commercial paper
  • Liquidity crisis issues

Case study/example relevant to above

Session 12: Distribution Channels & Technology

  • Branch network
  • Other organisations
  • Internet
  • Importance
  • Cost
  • Client requirements
  • Management requirements
  • Regulatory Requirements
  • Civil Service model
  • Shareholder expectations

Case study/example relevant to above

Session 13: Monitoring and Assessing

  • How to establish and manage Exposures
  • Portfolio management, reviews and analysis
  • Internal inspections and reviews –managing the process
  • Setting the parameters for analysis using tiers
  • Understanding and appreciating the different types of security
  • Calculating Exposures statically and dynamically
  • Warning signs and how to manage them

Case study/example relevant to above

Session 14: Forecasting and Modelling

  • Detailed modelling considerations
  • The management and supervision of forecasting
  • Implementing stress tests and managing the outcomes

Case study/example relevant to above

Session 15: Structuring

  • Understanding and assessing debt instruments and their relevant merits
  • Supervising and managing documentation issues, covenants and reporting requirements
  • Aggregated structures
  • Debt structures, subordination & insolvency regimes
  • The assessment of collateral and calculating a range of recovery prospects
  • Managing structures and debt capacity to achieve optimum results for all parties

Case study/example relevant to above

Session 16: Rating Agencies

  • A detailed look at the underlying rationale
  • Recommending systems
  • Understanding the relationship between rating agencies and regulatory issues
  • A detailed look at Basel II and its implications for capital allocation and shareholder value

Case study/example relevant to above

Session 17: Measurement of Credit Risk

  • Designing and implementing credit risk measurement systems
  • A detailed understanding of Credit Scoring systems
  • Designing and implementing a credit quality monitoring process
  • Understanding debt instruments both on and off balance sheet

Case study/example relevant to above

Session 18: Non-Financial Analysis

  • Taking a macro and micro view of sector, industry & economic factors
  • Using Porter’s model as a management tool
  • Understanding and managing the key market forces in your marketplace
  • Designing and managing corporate strategies
  • The significance and effectiveness of corporate structure
  • The helicopter view

Case study/example relevant to above

Session 19: Financial Distress

  • What to look for and how to establish systems that flag up automatically
  • Designing a referral process
  • Allocating responsibilities for action
  • Dealing with difficult or intransigent clients
  • Implementing recovery systems
  • Analysing recovery systems and outcomes
  • Learning lessons and building past experience into current thinking

Case study/example relevant to above

Session 20: Calculating credit risk capital under Basel

  • Risk-weights and risk-weighted assets
  • Credit risk and Basel I
  • Ratings and rating agencies
  • Basel II and rating agencies
  • The approaches for measuring credit risk capital
  • Obtaining approval for using a measurement approach
  • Data requirements and issues

Case study/example relevant to above

Session 21: The Standardised Approach

  • The nature of the Standardised Approach
  • The Standardised Approach’s asset classes and risk-weights
  • Off-balance sheet items
  • Difference between Basle I and Basel II

Case study/example relevant to above

Session 22: The Internal Ratings-Based approaches

  • The nature of the IRB Approaches
  • The IRB approaches and asset classes
  • The IRB parameters
  • Foundation based IRB Approach
  • The Advanced IRB approach
  • Backtesting
  • The usage test

Case study/example relevant to above

Session 23: Securitization and credit derivatives

  • The nature of securitization
  • True sale
  • The role of banks
  • Securitization under Basel II
  • The Standardised Approach
  • The Rating-Based Approach
  • The Supervisory Formula
  • Internal Assessment Approach

Case Study: The treatment of credit derivatives

Session 24: Collateral

  • Haircuts
  • Collateral under Basel II
  • The effect of collateral on credit risk capital
  • The Simple Approach
  • The Comprehensive Approach
  • The Advanced Comprehensive Approach

Case Study

Session 25: Project Finance

  • Characteristics
  • Viability
  • Financial analysis
  • Project Evaluation
  • Structures
  • Programmes
  • Monitoring
  • Pricing
  • Controlling

Case study/example relevant to above

Session 26: Public Private Partnerships

  • Characteristics
  • Purpose & Objectives
  • Financial analysis
  • Project Evaluation
  • Structures and policy considerations
  • Monitoring
  • Pricing &Controlling

Case study/example relevant to above

Session 27: Leveraged Debt

  • Characteristics
  • Level 1, 2 & 3
  • Mezzanine finance
  • Management Buy Outs
  • Cash flow lending
  • The role of the incumbent management team
  • Track record of Leveraged deals
  • Loss mitigation
  • Control
  • Pricing

Case study/example relevant to above

Session 28: Construction/Development

  • Characteristics
  • Structure
  • Lending appraisal
  • The importance of independent professionals
  • Control, release and monitoring
  • Calculating exposures and security
  • What to do when it goes off plan – all of them usually do
  • Pricing
  • Controlling repayments to leave least saleable assets with client, not the bank

Case study/example relevant to above

Advanced Credit Risk

£ 3001-4000