Credit Analysis for Bank Loan Decision Making

Teaching Hours and Credit Allocation: 30 Hours, 6 Credits
Course Assessment: Coursework  + Exam
 

Aims

The aim of this course is to learn how financial and cash flow analysis tools can aid in credit decisions and in applying credit analysis techniques/models (e.g., logistic regression) to determine the firm´s probability of default and thus evaluate the firm’s riskiness.

Learning outcomes

  • To learn how financial and cash flow analysis tools can aid you in credit decisions
  • To be able to apply credit analysis techniques/models (e.g., logistic regression) to determine the firm´s probability of default and thus evaluate the firm’s riskiness
  • To learn how to tie risk management, credit and financial analysis to the Basel Accord
  • To understand how daily actions can reduce or mitigate credit risk, market risk and operational risk
  • To understand need, usefulness and major components of the Basel II & III Accord
  • To learn how to tie credit analysis to the software applied by financial institutions for credit analysis purposes (Moodys Credit Scoring Model).

Content

  • Mission and learning objectives of risk management
  • Risk management and value creation via the Strategic Success Framework (SSF)
  • Credit analysis and bankruptcy prediction
  • Designing  credit scoring models using real data
  • Credit analysis and credit rating agencies
  • What actions should be taken by banks to mitigate credit risk?
  • The risk adjusted return on capital approach (RAROC)
  • Basel accord, credit analysis and governance
  • Bank’s capital (in)adequacy and credit analysis
  • Credit risk management and liquidity risk