Key Benefits
- Gain a deeper understanding of the advanced topics for the financial statements of banks, including hedge accounting, and income statements
- Strengthen your ability to apply IFRS 9, expected loss and financial instrument analysis when reviewing bank accounts
- Improve your confidence in assessing derivatives, liabilities, and capital measures such as CET1 through practical case studies and Excel work
Do You Need to Attend This Course?
This advanced bank analysis course is suitable for:
Investment bank FIG analysts and junior associates
M&A advisory boutiques specialised in FIG
Corporate Development professionals in banks
Junior equity research for banks
Risk analysts in banks
Finance professionals in banking institutions
Technical Content
Session 1: Introduction to Financial Statement Analysis of Banks
Balance sheet
Bank income statement
Cash flow statement
Bank analysis training explores the statement of change in shareholders' equity/comprehensive income
Case Study: participants will review Barclays’ bank financial statements
Session 2: The Banking Book
Types of banking books: Mortgages
Credit cards
Personal loans
SME (small-to-medium enterprise) loans
Corporate loans
Syndicated loans
On a balance sheet or securitised
Amortised cost methodology
Credit issues and collateral
Non-performing loans
Session 3: Loan Loss Impairment
Incurred losses (IAS 39) have been replaced by expected losses (IFRS 9)
Three-stage process to determine loan loss impairments: Stage 1: “12-month expected credit losses” with an effective interest rate on the gross carrying amount
Stage 2: “lifetime expected credit losses” with an effective interest rate on the gross carrying amount
Stage 3: “lifetime expected credit losses” with effective interest rate on gross on amortised costs
Case Study: Assess the credit deterioration of a loan
Session 4: Financial Instruments
Amortised Costs
Fair value through Profit & Loss (FVTPL)
Fair value through Other Comprehensive Income (FVTOCI)
Accounting treatment is determined by (i) the business model, (ii) the nature of cash flows
A decision tree to decide on the classification of bank financial instruments
Case Study: participants will be presented with a few classifications of financial instruments and will classify them into their relevant categories.
Balance sheet and P&L (Profit and Loss) calculation of a bond at amortised cost: Based on the Internal Rate of Return (IRR) of future cash flows
Treatment of fees in the IRR calculation
Balance sheet and P&L calculation of a bond at FVTPL and FVTOCI:
Effective interest rate method for interests (same as amortised costs)
Unrealised gain based on NPV (net present value) at a current yield of future cash flows
Fair value assessment:
Level 1 based on the unadjusted quoted price
Level 2 based on quoted price in inactive markets or observable model input
Level 3 based on unobservable but significant inputs to the overall value
Case Study: Using Excel, participants will compute the impact on the balance sheet and P&L of a bond under amortised costs and FVTPL
Session 5: Bank Derivatives
This section of the advanced financial statement analysis course explores:
Trading and hedging
Hedge accounting: fair value, cash flow and net investment
Netting derivative assets and liabilities
Qualification for hedge accounting: Cash flow hedge
Fair value hedge
Net investment hedge for foreign subsidiaries
Case Study: participants will classify a few hedging transactions in their relevant categories Case Study: participants will value an interest rate swap accounted for as a cash flow hedge
IFRS 9 hedge accounting more closely aligned with bank risk management policy: Removal of hedge effectiveness criteria (80% to 125%)
Extends the eligibility of the risk component to include non-financial items
Permits aggregate exposure that includes a derivative to be an eligible hedged item
Group of items and a net position (e.g., assets & liabilities or forecast sales & purchases) hedged collectively as a group
Accounting treatment for the time value of money for options: a two-step process through OCI (Other Comprehensive Income)
Accounting treatment for foreign currency forward points in OCI
Case Study: Review and assess different hedge scenarios, including risk component hedging, aggregate exposures and net position
Session 6: Financing (Debt and Equity)
Financial liabilities at amortised cost or FVTPL: Own credit deterioration reduces institutions’ liabilities
Liability reduction due to rating downgrade is now classified in OCI
IFRS shareholders’ equity and treasury shares
Common Equity Tier 1 (CET1), Tier 1, Tier 2, and Total capital:
Key reconciliation items from IFRS Book Equity to CET1: minority interests, deferred tax, changes to an investment portfolio, etc.
Advanced bank financial statement analysis concludes with an overview of calculating risk-weighted assets (RWAs): credit risk RWA, counterparty risk, market risk and operating risk
Case study: Review Barclays’ Shareholders' Equity to Tier I reconciliation
Training Objectives
This advanced bank financial statement analysis course at Redcliffe will help you build a structured approach to analysing a bank's financial statements. Through a mix of specific lectures, case studies, and Excel modelling, the workshop will equip participants to:
Review the accounting and valuation of the bank's financial statements.
Understand the banking book and the new IFRS 9 treatment for loan loss impairment using financial statement analysis of the expected loss methodology.
Analyse the accounting treatment of bank financial instruments, including: Amortised costs
FVTPL (Fair Value through Profit & Loss
FVTOCI (Fair Value through Other Comprehensive Income)
Review trading and hedging of bank derivatives under the new IFRS 9 rules
Analysis of bank financial statement liabilities at amortised cost and FVTPL, including fair value for own credit
Understand IFRS shareholders’ equity and the reconciliation to CET 1 (Common Equity Tier I), Tier I, and Total Capital
Training Course Summary
Advanced financial statement analysis training will help participants build a structured and advanced approach to analysing bank financial statements, including balance sheets, income statements, cash flow statements, and shareholder equity.
Participants will understand key IFRS 9 concepts, the expected credit loss methodology, loan loss impairments, and the classification of financial instruments under amortised cost, FVTPL, and FVTOCI.
Also, we cover analysis of the banking book, credit deterioration, non-performing loans, and the valuation of financial assets and liabilities using practical case studies and Excel modelling.
Participants will gain practical knowledge of bank derivatives, hedge accounting, fair value hierarchy levels, and the treatment of trading and hedging activities under IFRS 9. The programme will further explore how to assess regulatory capital metrics, including CET1, Tier 1, Tier 2, and Total Capital, and understand the reconciliation from IFRS equity to regulatory capital.
Interactive case studies based on real bank financial statements enable participants to strengthen analytical, valuation, and risk assessment skills in a banking environment.
Your trainer
Course Trainer · 20 yrs experience
- Banking Training Courses
Redcliffe's bank analysis training specialist has over 20 years of experience in accounting and investment banking and is an experienced financial trainer. He began his career as a Credit Analyst at Banque Continentale in Luxembourg. Here, he conducted credit analyses for short and long-term credits and participated in loan syndications.
He then worked as a Senior Auditor for Deloitte & Touche in Luxembourg. He audited and prepared financial statements for a variety of banks, insurance companies, investment funds, venture capital, and commercial companies.
He continued his career in Investment Banking at Citigroup (ex-Salomon Smith Barney) in London and New York. He worked on M&A, LBO, and debt offerings for financial services clients. His involvement in the €20 billion public offer of Crédit Lyonnais by Crédit Agricole was one of the largest European banking transactions.
Our trainer then became Vice-President in the internal M&A department of Barclays Bank in London. His experience included the acquisition of ABSA for $5 billion, one of the leading South African banks, the purchase of ING Private Banking in France, and the failed acquisition of Banco Atlantico in Spain.
Recently, he was a Director in the Investment Banking department of Commercial International Bank (CIB), the largest non-government bank in Egypt, where he completed several transactions. This included two sell-side M&A deals, one follow-on equity offering, and a delisting. He has worked with leading sovereign wealth funds, private equity firms, and prominent families in the UAE, Qatar, Kuwait, and Saudi Arabia.
He is currently a senior advisor to an M&A practice based in Paris. They focus on buy-side and sell-side transactions in the technology sector. Our trainer has an MBA in Finance from the Kellogg School of Management in Chicago and a Bachelor of Science in Finance from Groupe INSEEC (“International Management Institute of Paris”). He also holds « Series 7 » and « Series 63 » US licences.
Our bank analysis course lead has delivered courses both in English and French for leading financial institutions and central banks in the City of London, Wall Street and around the world in the areas of:
Corporate Finance Analysis
Valuation (Industrials and Banks)
Advanced Financial Modelling
M&A (Mergers and Acquisitions)
LBO (Leveraged Buyouts)
Financial Accounting
Capital Markets
Bank Regulatory Capital and Financial Risks
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