With events like the global financial crisis in mind, it is essential to be able to perform a credit analysis on banks to ensure they are as safe as they should be. This pathway, delivered by a variety of experts, will outline how to approach the analysis of a bank. Beginning with looking through their annual report is a good start, however this should be supplemented with a thorough understanding of their balance sheet and income statement.
Watch all the videos and pass the test to obtain a certificate showing your completion of this Pathway. Certificates can be shared directly to your LinkedIn profile and social media accounts.
5 video modules • 48 minutes
In this video, Ted outlines the 5 key things to look for in a bank’s annual report. These include: how a bank funds its loan book; the relationship between the amount of equity and the total assets of the bank; the relationship between net interest income and other income; the amount being spent on costs as a proportion of total income; and whether it is adequately providing for non-performing loans.
Ted Wainman • 09:01
In this video, Rob walks us through Lloyds Banking Group's balance sheet. He explains the components of the financial statement and explains where they sit within the bank's assets and liabilities. He delves more deeply into the concepts discussed in 'What is a bank?' and puts some real-world figures around them.
Robert Ellison • 20:13
Analysing a bank is not the same as a corporate. Leverage, capitalisation and profitability measures are incomparable between the two. In this video, January explores what makes banks unique and some important ratios to consider when determining the overall health of a bank.
January Carmalt • 08:50
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