Banking and Treasury
How banks earn money and manage risk, credit analysis, and corporate treasury. Examples are educational, not bank-specific rules.
7 lessons · 22 exercises · about 2 hours · 2 free lessons
You will be able to
- Explain how a bank earns net interest income, fees and absorbs credit losses
- Calculate net interest margin, cost of funds and the core bank performance ratios from a balance sheet
- Price a loan from funding cost, operating cost, expected loss and a capital charge
- Assess a corporate borrower and estimate expected loss from PD, LGD and EAD
Designed for: Analysts, credit officers, corporate bankers, treasury staff and students who want to understand banks from the inside.
Banking and Treasury Core
Module 1 · Bank economics
- How a bank makes moneyNet interest income, fees and the cost of risk — read through the income statement of a fictional bank.15 minFree
- Net interest marginCalculate NIM from average earning assets and split it into the spread and the benefit of free funds.18 minMembers
- Cost of fundsCalculate a balance-weighted cost of funds from deposits and borrowings, and see what a shift in deposit mix costs.17 minMembers
- Loan pricingBuild a minimum loan rate from funding cost, operating cost, expected loss and a charge for the capital the loan ties up.20 minMembers
- Bank performance ratiosCost-to-income, ROA, ROE, cost of risk and the loan-to-deposit ratio — calculated and read together.18 minMembers
Module 2 · Credit
- Corporate credit analysisAssess a corporate borrower with the 5 Cs and credit ratios — Rawdah Home Retail Co. asks Najd for a term loan.22 minFree
- Expected loss: PD, LGD and EADEstimate expected loss for a loan book from probability of default, loss given default and exposure at default, and size the provision.18 minMembers