Available dates

Dec 2—3, 2019
2 days
New York, New York, United States
USD 2495
USD 1247 per day
Dec 2—3, 2019
2 days
Amsterdam, Netherlands
EUR 1995 ≈USD 2205
EUR 997 per day
Dec 9—10, 2019
2 days
USD 2495
USD 1247 per day
+2 more options


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About the course

This interactive course provides participants with an understanding of the key performance indicators and main balance sheet and income statement accounts for banks.

Key Learning Outcomes:

  • The risks in the different business lines and products offered by financial institutions and how they are reflected in the financial statements
  • The components of bank financial statements and key ratios used in bank analysis
  • The impact of differing accounting standards and policies (e.g. provisioning, asset valuation, securitization etc.) on the financial statements
  • The CAMELS framework (capital, asset quality, management, earnings, liquidity and sensitivity to market risk) and key ratios to make a preliminary assessment of the performance and financial health of a bank.

Analytic Overview

Structured approach to analysis

  • Defining CAMELS within the context of overall bank analysis

Types of financial institution

  • Key activities and products of financial institutions: credit products, trading and investing, services and funding
  • Business models and key drivers of performance
  • Relating the business to the balance sheet and income statement: differences between balance sheets of different types of bank and non-bank financial institution
  • Major balance sheet and income statement components
  • Exercise: building a balance sheet for banks and non-bank financial institutions.

Business Risk

Asset quality

  • Statement logic and accounting: types of credit risk, on and off balance sheet, accounting for problem impaired loans
  • Loan quality: portfolio analysis, impaired/problem loans (past due, non accrual and restructured loans)
  • Reserve adequacy: provisioning levels, allowance, charge offs and recoveries
  • Trading and investments: securities and derivatives portfolios
  • Local and international benchmarks for key ratios and performance indicators
  • Exercises:
    • problem loan definitions
    • matching asset quality ratios
  • Illustration case study: Asset quality ratio analysis

Sensitivity to market risk

The aim of this section is to introduce market risk and the concept of value at risk.

  • Statement logic and accounting: valuation techniques for investments and derivatives - fair value through income statement, available for sale, held to maturity; SFAS 157 disclosures
  • Risk in the securities and derivatives portfolios
  • Value at risk and other measures of market risk: advantages and disadvantages
  • Illustration case study: Market risk disclosure


  • Statement logic and accounting: types of income and expense, impact of earnings accrual and asset impairment policies, core and non-core earnings
  • Key drivers of earnings: net interest margin, fees and commissions, trading
  • Ratios to measure quality and diversity of income, cost control, provision burden
  • Local and international benchmarks for key performance indicators
  • Exercise: matching earnings ratios
  • Illustration case study: Performance risk ratio analysis

Financial Risk

Liquidity and funding

  • Statement logic and accounting: funding sources, on and off balance sheet treatment for securitisation
  • Funding stability and different sources: deposits, commercial paper, repos, inter-bank lines, senior and subordinated bonds, common and preferred stock
  • Key drivers of liquidity: volatility of liabilities, quality and liquidity of assets, contingency funding needs
  • Local and international benchmarks for key liquidity and performance indicators
  • Exercise: matching liquidity ratios

Capital adequacy

The aim of this section is to appreciate the various types of capital and use key ratios to assess the adequacy of a banks’ capital.

  • Statement logic and accounting: types of capital, reported book equity, adjusted common equity and hybrid capital
  • Key drivers of capital: earnings, asset valuation, capital raising
  • International and local capital regulation: Basel I and II; Basel III changes
  • Risk weighted assets: Basel I vs. Basel II approach
  • Key ratios: tier one and total capital ratios, leverage, core capital and other measures
  • Local and international benchmarks for key performance indicators
  • Exercise: financial statement analysis.
  • Illustration case study: Assessing financial risk

Who should attend

This course is designed for analysts who have limited or no experience in the analysis of financial statements for financial institutions.

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