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.

Delegates will be required to bring a laptop running Microsoft Office with CD-Rom or USB Port to this course.

 Course Content

 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