Financial Statement Analysis- Banking Sector 

Bombay Stock Exchange Limited
In Mumbai

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Important information

  • Training
  • Mumbai
  • Duration:
    1 Day

Important information

Where and when

Starts Location
On request
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Course programme

Financial statements for banks present a different analytical problem than manufacturing and service companies. As a result, analysis of a bank's financial statements requires a distinct approach that recognizes a bank's somewhat unique risks.Financial Statements speak in a nutshell about the financial affairs of a business organization. The Course is intended to familiarize you with the basic concepts, elements, form, necessity & the importance of financial statements pertaining to banking sector.PROGRAMME CONTENTS:Structure of Banking Balance Sheet and P & L AccountThe Banking sector financial statements are completely different from other regular manufacturing or trading companies. Banks can and do borrow much more than the equity and are allowed by both RBI and Basel norms to do so. Capital adequacy is an important issue. These areas will be covered in some detail.Price to Book, Price to Adjusted Book Concepts, Price to EarningsPricing of banking sector shares is well correlated with the underlying book value per share after adjustment for NPAs not provided and has little correlation with earnings. This session will seek to understand why that is so and why between banks, these ratios may tend to differ quite significantly.Profitability Ratios - NIM, Provisioning - Gross and NetProfitability in banking sector is related to the interest that the bank is able to charge its borrowers vis-a-vis the interest that it pays out on its deposits. The variety of loans granted and deposits enjoyed leads to variation in interest margins. The factors that drive this margin is of great interest to analysts who track this sector.Risk Related Parameters - Value at Risk, SensitivityRisk management is important in banking as the entire balance sheet revolves around probability of non-payment by borrowers. What risk measures banks typically adopt and what is disclosed in banking annual reports is the focus of this session.Case study

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