Bank modeling and valuation intermediate

Adkins Matchett & Toy

Short course

Inhouse

Price on request

The best Banking and Financial Services courses

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Description

  • Type

    Short course

  • Methodology

    Inhouse

  • Duration

    1 Day

How does Basle 2 impact commercial bank valuation? Participants will incorporate key regulatory and accounting issues into bank modeling, moving from how a bank works to calculating maximum dividends payable annually. Course OutlineHow a bank makes money. How to interpret a bank's balance sheet and income statement. Understanding the key ratios used to analyze banks. Understanding. Suitable for: Anyone concerned with financing or investing in commercial banks in the US, UK or worldwide

About this course

Basic financial accounting and Excel modeling

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Course programme

How does Basle 2 impact commercial bank valuation? Participants will incorporate key regulatory and accounting issues into bank modeling, moving from how a bank works to calculating maximum dividends payable annually.
Course Outline
  • How a bank makes money
  • How to interpret a bank''s balance sheet and income statement
  • Understanding the key ratios used to analyze banks
  • Understanding dis-intermediation
  • Overview of the banking industry
  • Understanding a commercial bank''s financial statements in International Accounting Standards
Bank Regulation - The Regulatory Regime Banks Face
  • How to calculate risk weighted assets
  • How to calculate tier one and tier two capital
  • Understand how the credit rating agencies become the de-facto regulators
  • How Basle 2 will change bank regulation
  • Three pillars
  • Internal rating systems

Modeling a Commercial Bank
  • Building an asset and liability management model
  • Forecasting interest rates and spreads for key assets and liabilities
  • Building a risk weighted assets model
  • Preparing an income statement and balance sheet for the bank
  • Balancing the model and checking for accuracy
  • Understanding how regulations impose a growth constraint on commercial banks
  • Checking the model and preparing a ratio sheet

Valuing a Commercial BankUnderstanding the different ways to value a commercial bank
  • Discounted dividend flow
  • Comparable valuation
  • Price to book values and return on equity regression analysis
  • Understanding the impact of double leverage in the holding company

Building a Dividend Discount Model from the Commercial Bank Forecast
  • Changing the model driver to be an assumed regulatory capital ratio
  • Calculating the minimum capital adequacy
  • Calculating the maximum dividends payable each year
  • Calculating the bank''s cost of equity
  • Discounting the dividends to calculate today''s equity value
  • Adjustments required to valuing a bank owned by a parent company
  • Taking into account "double leverage"

See related categories

Bank modeling and valuation intermediate

Price on request

The best Banking and Financial Services courses

See all

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