Strategic Management for Banks

Banks: Strategies for Maximising Value

Face-to-faceTwo days

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Course Modules

  • 1. introduction

    • What is equity?
    • The impact of accounting conventions
    • The influence of regulation
  • 2. bank valuation – market approach

    • The attraction of gearing: macro-economic gearing; stock market gearing; and balance sheet gearing
    • Dividend discount models
    • Earnings growth and Price:Earnings Ratios
    • Return on Equity, Return on Tangible Equity and Price:Book multiples
    • The drivers of Return on Equity
    • Cost of Equity – brief introduction
    • Economic profit
    • Long term growth rates
    • The significance of Net Asset Value (NAV) growth
  • 3. market approach – case study

    • Comparison of banks’ forecasts
    • Comparative valuations
    • Macro-economic stress–testing
    • Review and discussion
  • 4. bank valuation – internal approach

    • Equity Cash Flow – definition and approach
    • The relevance of “Cash-Flow” in banking
    • Cost of Equity – Capital Asset Pricing Model (CAPM)
    • Terminal Value – relevance and calculation
    • Establishing Value Drivers
    • Portfolio review
  • 5. internal approach – case study

    • Commercial bank valuation
    • Valuing a diversified bank’s portfolio
    • Review and discussion
  • 6. valuation impact of regulation

    • Review of key regulatory developments
    • Capital
    • Liquidity
    • Pro-cyclicality and Equity Cash Flow valuation
    • Product portfolio valuation under Basel III
  • 7. managing for value

    • Business model evolution following the Global Financial Crisis
    • Investment Banking models and profitability
    • The franchise value of deposits and the impact of low interest rates
    • Market Based Finance – from out of the shadows
    • The ‘unbundling’ of banking
    • FinTechs – the valuation impact of digital disruption
  • 8. managing for value - case study

    • Analysis of recent banks’ restructuring
    • Assessment of the value impact

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