BNK 006 – Risk Analysis for Credit Analysis Committee

Name: BNK 006 - Risk Analysis for Credit Analysis Committee
SKU: 1945
Availability: InStock

Teachers

Eric Neoh

Category:

Banking / Finance & Account / In-House Programs /

BNK 006 - Risk Analysis for Credit Analysis Committee

Price

Duration: 2 Days

Lectures: InHouse

Certificate of Completion

INTRODUCTION

Understanding the relationship between risk and reward in lending requires the use of a powerful analytical tool. This two-day training seminar will provide you with the knowledge necessary to assess credit using the reporting and analysis features. It will increase your comfort level and confidence in evaluating credit risk.

Objective

Use Risk Analysis more effectively in the lending decisions process
Identify why businesses borrow and their likely sources of repayment
Understand the basics of modern quantitative analysis and how it can be used in the lending decision process
Use key financial ratios for assessing credit risk

Analyze business cash flow and recognize the importance of this skill in the risk assessment process
Understand the basics of financial forecasting and develop long-term and short-term financial projections
Enumerate the key risks of a borrowing request and present them in the credit approval process
Determine whether or not the credit risk of a given loan request is acceptable

Who should attend?

The course is designed for beginning to intermediate level credit or loan committee

Methodology

Hands on
Instructor Lead
Group – Live

CURRICULUM

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Day One

Module 1: Risk Analysis Role in the Analytical Process

Seminar

The premium on data quality and spreading classification accuracy – common spreading “pitfalls”
RA as servant, not master
Integrating RA with the financial analysis/underwriting processes
The analytical value of consistency in process from credit to credit

Module 2: The Detailed Ratio Report – Developing an Initial Hypothesis as to Borrower Creditworthiness

Exercise

Structure and contents of the Detailed Ratio report
Using ratios to develop an initial hypothesis regarding borrower creditworthiness
Focus on the cash-driving ratios and their role in the analytical process
How the ratios are effected of misclassified data
Group exercise using case study

Module 3: The Cash Flow Report – Confirming/Modifying the Initial Creditworthiness Hypothesis

Exercise

Structure and contents of Cash Flow Report
How the cash flow report is constructed and the effects of missclassified data
Analysis of key subtotals on the cash flow report
Cash flow report interpretation and its value in either confirming or suggesting modification to the initial creditworthiness hypothesis
Group exercise using case study

Module 4: The Cash Flow Management Report – Assessing Borrower Management Expertise

Exercise

Management competence – a key to credit risk
How to cash flow management report helps us determine management competence and priorities
Structure and contents of the cash flow management report
Interpreting the cash flow management report
Group exercise

Day Two

Module 5: Introduction – Why Project?

Seminar

What are we trying to show?
What is the relevance to repayment?
How will this help with credit analysis and determining other needs?

Module 6: RA Projections Module – Functional Review

Exercise

Creating long and short-term projections
Projection variables and quick assumptions
Entering new long-term debt
Using the ‘Surplus/Deficit Allocation’ Feature
Other key features
Group Exercise

Module 7: Case study – Putting Projections Module to Work

Activity

Identify risks in the company
Prioritize risks – particularly those which affect future cash flow repayment capacity
Enter projection variables and adjust other data
Assess the output; determine sensitive variables
Adjust input to reflect ‘ most likely’ case