Run by Bangor Business School

20.000 Credits or 10.000 ECTS Credits

Semester 1 & 2

Organiser: Prof John Ashton

This double module examines the main theoretical and practical issues concerning banking business. In particular, the modules covers the theory of the banking firm by considering all aspects of the bank’s balance sheet in addition to regulation, structural and environmental issues that affect the bank’s strategic decision-making and risk behaviour. After completing the module, students should be familiar with how to measure, manage and maximise the bank’s value and have developed understanding of management strategies.

The content may include but will not be limited to the following topics.

• Introduction to the banking firm
• Business models and forces of change
• The regulation of banks and bank capital regulatory requirements
• Analysing bank performance
• Business and consumer lending
• Diversification and managing non-interest income and non-interest expense
• Managing value at risk
• Asset Liabilities Management (ALM)
• Essentials of credit risk analysis
• Credit risk management
• Liquidity management
• Capital theory
• Capital management
• Managing the investment portfolio

C- to C+

C- to C+ Demonstration of the required knowledge and techniques but with mistakes and little development of the subject beyond lecture material.

excellent

A- to A+ Excellent grasp of the concepts and techniques together with significant evidence of engagement and understanding of the research papers in this area.

threshold

D- to D+ Demonstration of the required knowledge and techniques but with significant mistakes and little development of the subject beyond lecture material.

good

B- to B+ Clear understanding of the subject, together with evidence of investigation and understanding of the research literature, but with some theoretical or practical minor errors.

1. Evaluate the asset-liability management (ALM) process in modern banking firms.

2. Discuss the main theories and practices underlying modern bank capital management.

3. Appraise the main theoretical and practical issues concerning banking business.

4. Evaluate the processes and techniques in credit risk and liquidity management methods that banking firms use.

5. Understand how to measure, manage and maximise the bank’s value.

6. Develop a critical understanding of the forces that are shaping management strategies in banks.

7. Evaluate the market forces, competitive conditions and regulatory requirements that are shaping bank business models as well as the banking and wider financial industry.

8. Analyse bank performance and evaluate the contribution of interest and non-interest activities to profit.

Type	Name	Description	Weight
	Examination (Semester 1)		30.00
	Examination (Semester 2)		30.00
	S1 Group Assignment		20.00
	S2 Assignment		20.00

		Hours
Practical classes and workshops	Practical classes and workshops delivered through Blackboard.	28
Lecture	One 2-hour lecture per week.	20
Private study	To review lectures, read supporting materials, and reflect upon each topic.	152

• Literacy - Proficiency in reading and writing through a variety of media
• Numeracy - Proficiency in using numbers at appropriate levels of accuracy
• Computer Literacy - Proficiency in using a varied range of computer software
• Self-Management - Able to work unsupervised in an efficient, punctual and structured manner. To examine the outcomes of tasks and events, and judge levels of quality and importance
• Exploring - Able to investigate, research and consider alternatives
• Information retrieval - Able to access different and multiple sources of information
• Inter-personal - Able to question, actively listen, examine given answers and interact sentistevely with others
• Critical analysis & Problem Solving - Able to deconstruct and analyse problems or complex situations. To find solutions to problems through analyses and exploration of all possibilities using appropriate methods, rescources and creativity.
• Presentation - Able to clearly present information and explanations to an audience. Through the written or oral mode of communication accurately and concisely.
• Teamwork - Able to constructively cooperate with others on a common task, and/or be part of a day-to-day working team
• Argument - Able to put forward, debate and justify an opinion or a course of action, with an individual or in a wider group setting
• Self-awareness & Reflectivity - Having an awareness of your own strengths, weaknesses, aims and objectives. Able to regularly review, evaluate and reflect upon the performance of yourself and others

• skills in recording and summarising transactions and other economic events; preparation of financial statements; analysis of the operations of business (for example, decision analysis, performance measurement and management control); financial analysis and projections (for example, analysis of financial ratios, discounted cash flow analysis, budgeting, financial risks)
• knowledge of theories and empirical evidence concerning financial management, risk and the operation of capital markets (in cases of degrees with significant finance content).
• A knowledge of the major theoretical tools and theories of finance, and their relevance and application to theoretical and practical problems (e.g. concept of arbitrage and examples of its use; financial mathematics and capital budgeting criteria; informational efficiency; optimal risk sharing; portfolio theory; asset pricing models and the valuation of securities; cost of capital; derivative pricing; risk management; information asymmetry; principal agency relationships; signalling; Fisher separation and capital budgeting criteria; behavioural finance; term structure and the movement of interest rates; determination of exchange rates and financial intermediation).
• An understanding of the factors influencing the investment behaviour and opportunities of private individuals (bonds, equities, and derivatives; risk aversion; risk/return trade-offs; portfolio management and performance measurement; pensions and long term savings; the tax treatment of savings and investments; international diversification; forex risk; objectives of and constraints on institutional investors and advisors).
• Problem solving and critical analysis: analysing facts and circumstances to determine the cause of a problem and identifying and selecting appropriate solutions.
• Commercial acumen: based on an awareness of the key drivers for business success, causes of failure and the importance of providing customer satisfaction and building customer loyalty.
• Numeracy: the use of quantitative skills to manipulate data, evaluate, estimate and model business problems, functions and phenomena.
• Conceptual and critical thinking, analysis, synthesis and evaluation.

Resource implications for students

Students may want to purchase supporting text book.

Talis Reading list

http://readinglists.bangor.ac.uk/modules/etb-3525.html

Reading list

Bank Management, 8th ed. by Timothy W. Koch and S. Scott MacDonald. Published by Cengage Learning.

Introduction to Banking, 2nd ed. by Barbara Casu, Claudia Girardone and Philip Molyneux (2015). Published by Pearson.

Compulsory in courses:

• N34M: BSc Banking and Finance (Franchised) year 3 (BSC/PBF)