Measuring and Evaluating Banks Performance Egyptian Banking Institute

This course examines the different analytical tools applied to bank’s financial statements in order to measure its performance, helping the management and analysts in identifying the most critical problems inside each bank and develop ways to deal with those problems. Finally, it will provide attendees with practical approaches to improve bank performance.

Course Description:

This course examines the different analytical tools applied to bank’s financial statements in order to measure its performance, helping the management and analysts in identifying the most critical problems inside each bank and develop ways to deal with those problems. Finally, it will provide attendees with practical approaches to improve bank performance.

Course Objectives:

  • Define bank objectives and analyze bank’s financial statements
  • Introduce the different traditional tools used in measuring bank performance
  • Introduce alternative (advanced) approaches for measuring performance
  • Explain the relationship between performance and risks
  • Propose practical approaches to improve bank performance

Course Outline:

Module 1: Introduction to Bank Objectives and Performance

  • The bank’s long range objectives
  • Maximizing bank’s value (maximizing value/markets share)
  • Quick review to bank’s financial statements:
  • An overview of balance sheets: measuring bank’s wealth
  • Mathematical components of income statement

Module 2: Evaluating Bank Performance

  • Key profitability ratios :
  • Return on Equity (ROE)
  • Return on Assets ( ROA)
  • Net Interest Margin (NIM)
  • Net Noninterest Margin
  • Net Operating Margin
  • DuPont Model : Breaking Down Equity Returns
  • Breakdown analysis of bank’s Return on Assets
  • Other ratios
  • Worked examples and exercises

Module 3: Alternative Methods for Measuring Performance

  • The Efficiency Ratio
  • Valuation Ratios
  • Using Economic Value Added (EVA) in measuring bank performance
  • An alternative ROE Equation:
  • Return on Invested Funds (ROIF)
  • Return on Financial Leverage( ROFL)

Module 4: The Relationships between Performance and Risks

  • Fundamental risks related to bank operations:
  • Credit risk
  • Liquidity risk
  • Market risk
  • Operational risk
  • Capital or solvency risk
  • Legal risk
  • Reputational risk
  • How above risks affect performance
  • Module 5: Improving Bank Performance
  • Financial structure and capital structure
  • Improve performance and maximizing shareholders value:
  • Asset Allocation
  • ALM Strategies
  • Case studies

Assessment Strategy:

Participants will be informally assessed on their interaction during sessions and their participation in exercises.

A specialized and unique service provided by EBI's Research and Awareness Department. At the Egyptian Banking Institute, we produce publications every year about the EBI’s business performance, our charitable giving, our efforts to reduce the impact of our businesses on the environment, and other measures of our sustainability.

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