KPME Bank Modeling & Valuation

What does the Bank Modeling program cover?

Analyzing and valuing banks is a completely different ball game when compared to a regular company. The analysis operates on unique methodologies that differ vastly from traditional approaches.

Watch our expert financial modeler and trainer Rahul Sonthalia, CFA, CMA provides a short snippet on the key components of a bank model and how our 3-day program can help you develop a robust bank valuation from scratch.

Learning Objectives

Forecast and develop an integrated bank financial model starting from a blank excel

Analyze a bank’s financial statements and interaction between its key assets and liabilities

Discover the impact of IFRS 9 & Basel III on a bank's financial health

Value a bank using cash flows and multiples-based valuation tools

Learn and apply advanced excel tools and functions

Understand why bank's are regulated

Program Agenda

Introduction to Bank Model

Key Excel tools used in Bank Financial Modeling
(Logical & Date functions, Data Tables, Index & Match, Choose)

Introduction to the Case Study

Model design and structure for the case study bank
Know the key model outputs and their drivers
Understand the requisite inputs
Developing cell styles for model transparency and review

Introduction to the Bank’s Financial Statements

Understanding a bank’s balance sheet – Key assets and liabilities
Understanding a bank’s income statement and different sources of income
Understanding a bank’s risk evaluation metrics

Extracting, cleaning and normalizing historical financial statements of a bank from annual reports
Building error checks in the model

Balance Sheets

Loan portfolio – overall and segmental breakdown
NPL and credit loss provisions
Trading assets and investments
Other non – core assets: PP&E, etc.
Deposits portfolio – overall and segmental breakdown
Central Bank, Interbank and other liabilities
Funding requirement – Debt and Equity
Regulatory Tier 1 and Tier 2 capital requirement for a bank
The Model Balancer of the bank’s balance sheet

Income Statement

Net Interest Income
Interest Income – Overall and segmental breakdown
Interest Expense – Overall and segmental breakdown
Net Fee & Commission Income
Trading Income
Credit loss provisions
Other operating costs and taxes
Dividend Pay-out Ratio:
Using historical or a target pay-out ratio
Linking dividends pay-out to target capital requirements (surplus capital method)

Ratios

Profitability Ratios
NIM, ROA, ROE
Cost to income and Cost to asset
Capital Ratios:
Tier 1 and Tier 2 capital ratios
Gross and Net leverage ratios
Asset quality ratios:
Gross and Net NPL ratios
Coverage ratio and more

Bank Valuation – Discounted Cash Flows & Trading Comps

Calculating a bank’s Cost of Equity and understanding the right selection for different CAPM inputs
Estimating terminal value – growth rate and multiple methods
Valuation using DDM and FCFE methods
Performing scenario and sensitivity analysis to DCF valuation outputs
Selecting the right set of comps to the subjected comps
Normalizing the financial metrics of peer groups
Using P/E and P/B multiples to value the subject banks

Presenting the model outputs

Using high-quality, flexible charts and developing a management dashboard

Combo charts, Football Field Chart, etc.
Camera tools
Dashboard with scenario manager switch

Our Expert Trainers

Rahul Sonthalia

AFM, CFA, CMA

Rahul Sonthalia

AFM, CFA, CMA

Rahul has more than 13 years of experience in the area of investment banking, equity research, macro-economic research, and training. He has been teaching financial modeling and investment banking courses in UK, Singapore, and the MENA region.

He has delivered advanced financial modeling related programs for Sovereign wealth funds and banks in the GCC and for large asset management companies in the UK and Singapore. He was a guest speaker on “Best Practices in Financial Modeling” at the Modeloff Global World Financial Modeling championship in London.

Shanin Thomas

CFA

Shanin Thomas

CFA

Shanin has over 10 years of work experience in equity research, portfolio management, investment banking, and financial modeling. He was a partner at Esta Capital, a boutique investment research and advisory firm. He also previously worked in JPMorgan’s Investment Banking Division in Mumbai and New York offices covering North American banks and asset management companies.

He has over 6 years of experience in CFA training and corporate training on programs such as Financial modeling, finance for non-finance, business valuation, equity research, value investing, and derivatives.

What Our Students Say

See All

43 months ago

Financial Modelling (2019) – Nikhil Kapoor

Rahul is a fantastic trainer who is very coherent and gets his ideas across perfectly. He takes his time to answer all questions in-depth and ensures we learn the concepts thoroughly. I would 100% recommend Kaplan Professional ME to everyone.

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41 months ago

Financial Modelling (2019) – Eva Reinerova

The trainers at Kaplan Professional ME are very understanding, knowledgeable, and patient. I have studied for the CMA and CFA courses, therefore I know the quality of the training team. They are very experienced in terms of industry and course expertise.

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60 months ago

Financial Modelling (2019) – Tichaona Maviyo

Rahul was exceptional! He ensured that he explained the concepts really well and I truly felt like I got more value than I paid for. I received financial modeling manuals, case studies, and beyond classroom support that has helped me develop models efficiently.

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60 months ago

Financial Modelling (2019) – Umar Masood

The course has been really detailed right from the steps to follow to the outcomes to expect. I would highly recommend the course to anyone that would like to learn about the practical application of financial models.

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Upcoming Dates

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