Bank (FIG) Modeling

Banks don't look like other companies. Learn how
to model, analyze, and value them, step-by-step.

  • Gain an understanding of the bank industry's unique drivers and challenges
  • Build advanced bank valuation models, using an actual, current case study
  • Developed by experienced investment bankers with an expertise in financial institutions
  • Use as a reference to get ahead in your career

What You Will Get

  • Bank Industry Primer
  • Bank Modeling and Bank Valuation Step By Step Guide
  • The Bank Model Template
  • Supporting SEC Documents, Analyst Research
  • Free 24-month online support upon enrollment
  • This program is eligible for 35 PD credit hours as granted by CFA Institute

Who is this for?

  • IB analysts & associates
  • Private equity associates
  • Corporate finance and business development associates
  • Consultants
  • MBAs and professionals pursuing careers above

Key Highlights

Section One
Building a bank forecast model:

  • Build an advanced bank forecast model, projecting asset and liability balances, interest rates and spreads for key assets and liabilities, using industry best practices
  • Learn to effectively forecast the loan portfolio, investment securities, and deposits
  • Understand the modeling and forecasting of allowances for loan losses and net charge offs (NCOs)
  • Forecast net interest income (NII), asset yields, funding costs and interest earning assets (IEA) and liabilities (IBL) using an approach that takes into account typical disclosure gaps, is internally consistent, and avoids common modeling pitfalls
  • Learn common forecast approaches for the non-interest income and expenses such as fees, and compensation
  • Identify the most appropriate "plugs" in a bank model to ensure the model balances, and address circular reference issues in the model
  • Model regulatory constraints and analyze effects on leverage, capital ratios, and profitability

Section Two
Building a bank valuation model:

  • Using the results derived from the forecast model, build a residual (excess returns) income model
  • Develop assumptions about return on equity (ROE), risk weight assets (RWA), cost of equity, and minimal capital ratio that are internally consistent for a multiple stage model
  • Build an adjusted dividend discount model using the prevailing beset practices for banks (not the same as non-banks)
  • Compare the other valuation approaches such as comps and DCF and identify strengths and limitations of each approach
  • Analyze how regulatory capital constraints effect valuation

Prerequisites

The course is self-paced and anyone is welcome to enroll. This program does not assume a prior background in banks or financial institutions. However, those that select this course should possess:

  • Accounting (intermediate level)
  • Excel (intermediate level)
  • Prior background in basic financial modeling
Not sure if you meet a requirement? Consider taking: