Bank Valuation Techniques

City Training UK
Course summary
Professional Training
3.5 hours
500 - 750 GBP excl. VAT
Full time
London, Online courses

Course description

Bank Valuation Techniques

This training course in London will offer financial banking participants a chance to improve their knowledge of how the financial modelling of any large bank works and how to use this data to create predictions and models which can help obtain a bank's value. 

Participants will take part in four sessions made up of lectures and case studies which look at four main topics:

  • Investigation of a bank’s financial statements which contain loans, financial instruments and derivatives
  • Fundamentals of regulatory capital and risk weighted assets
  • Best practice to forecast and model banks
  • the process of  valuing banks using Dividend Discount Model (DDM) and trading multiples.

At the end of the training, participants will be able to take the historical of any bank, develop projections and obtain its value based on the main methods used, namely DDM and Trading multiples.

About the Trainer:

Joanna has 10 years of experience in the Financial Institutions Group (FIG) of Deutsche Bank in New York. She began her career in Investment Banking at Deutsche Bank in New York where she worked in Mergers and Acquisitions. As an associate, she moved to FIG where she was involved in large public bank takeovers. She completed more than 50 transactions for a combined value of around US$100 billion. More recently Joanna decided to focus her career on training and teaching. She is a visiting professor at the Wharton MBA programme and trains in the US and Europe on bank-related issues.

She has a Bachelor of Science from the University of Pennsylvania and an MBA in Finance from Wharton. She also holds Series 7 and Series 63 US licenses.

Suitability - Who should attend?

This course is designed for participants who are:

  • Junior FIG professionals in investment banks
  • Lateral hires FIG professionals
  • Equity Research specialised on banks
  • Junior investment managers covering banks
  • All other interested Finance professionals

Training Course Content

The content of this course is split into four sessions:

Session 1 Financial Statement Analysis for Banks

  • Banks’ financial statements overview
  • Accounting for loans: 
    - Expected realisable value
    - Credit Issues and collateral
    - Non-performing loans
    - Understanding impairments vs. write-offs
  • Accounting for financial instruments
    - Held to maturity, available for sale and trading financial instruments
    - Fair value and amortised cost accounting
    - Level 1, 2 and 3 valuations
    - Impairments of financial instruments
  • Accounting for derivatives
    - Hedge accounting: fair value, cash flow and net investment
    - Netting derivative assets and liabilities

Session 2 Fundamentals of Regulatory Capital

  • Overview of regulatory framework
  • Overview of Basel I, II and III
  • Overview of calculating available and required capital
    - Common Equity Tier 1 (CET1), Tier 1, Tier 2 and Total capital
    - Key reconciliation items from IFRS Book Equity to CET1: minority interests, deferred tax, changes to investment portfolio.
  • Overview of calculating risk weighted assets (RWAs)
    - Credit risk RWAs
    - Counterparty risk RWAs
    - Market risk RWAs
    - Operating risk RWAs
  • Overview of calculating regulatory liquidity and funding ratios
    - Liquidity risk
  • Key capital ratios
    - Tier 1 and total capital ratios
    - Leverage ratios
    - Liquidity coverage ratios (LCR)
    - Net stable funding ratios (NSFR)

Session 3 Forecasting and Modelling for Banks

  • Modelling banking activities
    - Modelling and forecasting the balance sheet: deposit or loan-driven bank?The loan book
    - The trading book
    - Funding requirements and mix: deposit vs. wholesale funding
    - Growth in funds under management
    - Modelling and forecasting the income statement
    - Understanding the income statement drivers
    - Net interest income and margin
    - Non-interest income
    - Forecasting loan impairment through the credit cycle
    - Operating costs
    - Tax
    - Modelling and forecasting regulatory capital
  • - Risk weighted assets
    - Required capital under Basel I, II or III
    - Available capital under Basel I, II or III
    - Liquidity requirements and stable funding requirements
    - Forecasting dividends using a payout ratio and / or minimum capital requirements
  • Ratio analysis
    - Key performance ratios

Session 4 Bank Valuation

  • Free cash flow to equity model
    - Present value of future dividends
    - Cost of equity for banks
    - Terminal value: review of potential approaches (normalising key parameters or long-term RoE), limits and benefits
    - Sensitivity analysis
  • Banking trading multiples
    - P/BV and adjustment to BV explained
    - P/E, dividend yield

Why choose City Training UK

100% specialised on Corporate Finance with more than 20 different topics

Hundreds of participants trained from heads of departments to recent graduates

10 specialised trainers at minimum VP-level in leading financial institutions

About provider

City Training UK

City Training is a highly-distinguished supplier of premium public courses, in-house training, and courses for universities and schools. The company focuses solely on financial training and covers the areas of financial accounting, corporate finance, valuation, credit analysis, regulatory capital, mergers and...

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Contact info

City Training UK

100 Pall Mall, Saint James
SW1Y 5NQ London

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Average rating 4.8

Based on 10 reviews.

Very nice and useful training experience. The trainer was very helpful answering my questions and guiding me through details of each exercise, with rational explanations for each. I highly recommend City Training as a good source of learning and keeping your skills fresh.
Catherine A. - Analyst, Private Equity
This course had good detail and ensure we could follow the bank models we were building
Sofiane - FIG, BNP Paribas
Good level of debate, instructor has excellent experience of FIG M&A to draw from and tell the class about
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