This course provides students with an understanding of credit analysis and lending. It will equip students with knowledge of sound banking practices related to lending. Students will learn the fundamentals of credit analysis, banker-customer relationships, consumer and commercial lending, and managing problem loans. The course involves lectures, tutorials, problem sets and case studies. Students will be assessed through a research project and final exam. Key topics include the principles of lending, qualitative and quantitative borrower analysis, loan structuring, credit administration and special lending considerations.
This course provides students with an understanding of credit analysis and lending. It will equip students with knowledge of sound banking practices related to lending. Students will learn the fundamentals of credit analysis, banker-customer relationships, consumer and commercial lending, and managing problem loans. The course involves lectures, tutorials, problem sets and case studies. Students will be assessed through a research project and final exam. Key topics include the principles of lending, qualitative and quantitative borrower analysis, loan structuring, credit administration and special lending considerations.
This course provides students with an understanding of credit analysis and lending. It will equip students with knowledge of sound banking practices related to lending. Students will learn the fundamentals of credit analysis, banker-customer relationships, consumer and commercial lending, and managing problem loans. The course involves lectures, tutorials, problem sets and case studies. Students will be assessed through a research project and final exam. Key topics include the principles of lending, qualitative and quantitative borrower analysis, loan structuring, credit administration and special lending considerations.
This course provides students with an understanding of credit analysis and lending. It will equip students with knowledge of sound banking practices related to lending. Students will learn the fundamentals of credit analysis, banker-customer relationships, consumer and commercial lending, and managing problem loans. The course involves lectures, tutorials, problem sets and case studies. Students will be assessed through a research project and final exam. Key topics include the principles of lending, qualitative and quantitative borrower analysis, loan structuring, credit administration and special lending considerations.
Semester I, 2015 Pre-requisites: ECON 2002, ACCT 2014 Lecturer: Michael Willacy
Description This course is designed to provide students with a basic but solid understanding of the theoretical and practical issues associated with credit analysis and lending. The objective of the course is to equip students with the understanding of sound banking practices in the area of lending. In addition, students will be exposed to skills in the management of problem loans to minimize losses.
Learning Outcomes.
At the end of this course students should be able to:
Understand and apply the fundamental elements of the credit analysis process. Critically analyse the banker-customer relationship within a credit context. Understand the theoretical and practical aspects of consumer and commercial Lending. Assess loan applications to identify and evaluate risk and make recommendations. Calculate the main categories of ratios used in the credit analysis process Assess the qualitative issues that give rise to risk in the lending process Determine the actions to be taken with respect to the management of problem loans.
Modes of Delivery Two lecture hours and one tutorial hour per week. Problem sets (not for grading) will be provided for practice.
The course will be conducted in a manner geared towards encouraging student
participation. It will be taught by a combination of lectures by both the course lecturer as well as persons with relevant expertise and experience from the financial sector. Students will be required to carry out practical exercises related to various aspects of credit analysis and lending. These would include analyzing the major decisions involved in structuring a loan for a client, risk assessment, loan management and treatment of problem loans. Case studies will be used as a means of stimulating students’ research and intellectual effort.
Assessment A Research Project (40%) and a comprehensive final examination (60%). Syllabus
Definition of Credit Risk
What is Credit Risk
The Fundamental Principles of Lending
5 Cs of Credit Modern approaches to Credit Risk measurement
Consumer Lending Types of Consumer loan Evaluating Personal Loans Personal Lending and Security
Qualitative Analysis of the Borrower
Macroeconomic environment Industry Risk Analysis Business Risk Analysis
Mortgages Guarantees Life Policies Debentures
Special Types of Borrowers
Advances to builders
Credit Administration loan management management of problem loans
Special Topics Proceeds of Crime Act (POCA) Anti-Money Laundering (AML) Resources Prescribed Rouse, C.N. Bankers’ Lending Techniques, Financial World Publishing, U.K., 2nd Edition, 2002.
Recommended Fraser, Donald R., Benton E. Gup and James W. Kolari. Commercial Banking: The Management of Risk, South-Western College Publishing, USA, 2001. Milind Sathye, James Bartle, Michael Vincent, Raymond Boffey. Credit Analysis & Lending Management, John Wiley & Sons Australia, Ltd Fraser, Donald R., Benton E. Gup and James W. Kolari. Commercial Banking: The Management of Risk, South-Western College Publishing, USA, 2001. Rose, Peter S. Commercial Bank Management, McGraw-Hill/Irwin, 2002. Koch, Timothy W. and S. Scott McDonald. Bank Management, South-Western, USA, 2003.
