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Training Course Summary:

Introduction to FI Valuation
Valuation and pricing techniques - perspective
Risk and the pricing of risk
Differences between financial institution and corporate valuation
techniques
Income volatility for banks, insurance companies, asset managers,
other FI's
Return on equity and Price/BV
The relevance of cost of capital
Limitations of accounting-based data
Problems associated with using traditional DCF techniques for valuing
FI's

Understanding Financial Structure and Risks of Financial Institutions
Asset and liability structure of a financial institution
Retail banks, investment banks, asset managers and insurance
companies
Profitability and diversity of income source
Structure and management of risks
Case study example of European bank illustrating risk profile

Advanced Discounted Cash Flow Techniques
Loan portfolio default rates and provisioning policy
Concentration and position risks
Discounted cashflow value of loan portfolio
Discounted cashflow value of on-balance sheet instruments
Market risk of derivative positions and impact on value
Case study example of valuing a bank's asset base

Evaluating the FI Revenue Base
Diversity of revenue base
Margin spread and the effects of yield curve movements
Transfer pricing impact
Shareholder value added measurement
Strategic value management
Case study example of adding value through strategic value
management

Further Pricing Techniques
Comparatives - determination, adjustments and multiples
The influence of banking issues
Case studies using comparatives to value FI's
Problematic issues in valuation including risk profiles, goodwill
The relevance of equity in financial institutions (including CAD and
Basel II)
Economic Value Added
CFROI Valuation Model and the Future

Who Should Attend:

This seminar will be useful for executives who work with and need to place a valuation on banks and other financial institutions . It considers in depth the financial structure and risk associated with financial institutions and explains how the different traditional valuation methodologies may be varied to suit the individual circumstances in each case. The seminar also includes the application of EVA and CFROI as evaluation techniques and applies them specifically to financial institutions . The course is also useful to those who are involved in any type of corporate transaction for financial institutions from an advisory perspective.