This program gives practical real-world examples of how to spot credit problems early in order to take appropriate action. We begin by examining the current state of the credit markets with emphasis on the importance of the credit cycle. Where can an analyst find the early warning signs? Specifically, we will discuss clues in financial statements and analyze warning signs in the income statement and balance sheet, review the Auditor’s report and proxy statements, discuss covenant violations and analyze off-balance sheet activities. Discussion will also cover external and market oriented early warning signs.
Course Objectives
By the end of the course, participants will be able to:
- Reviewing a general framework for analyzing financial statements specific to banks
- Learning to appreciate the importance of solid risk management organization, policies & practices
- Defining risk and differentiate between different risk impacting banks
- Discussing credit risk drivers
- Explaining the role of portfolio management
- Describing the implication of non-bank subsidiaries
- Explaining the implication of off-balance sheet liabilities
- Spotting financial statement aspects easiest to manipulate
- Identifying early warning signals of credit quality deterioration in banks
Suggested Prerequisites:
- Financial Statement Analysis or equivalent knowledge
Program Level: Intermediate
Advance Preparation: None
Computers and Financial Calculators: N/A
Recommended CPE Credits: 7