Nonfinancial Credit and Asset Analysis
Financial services professionals, consultants, and sales professionals interested in providing or selling products and services to retail banks, and anyone interested in understanding the how bank branches operate
Please contact us for information about prerequisites.
Making credit decisions requires proficiency in both quantitative and qualitative analysis. Qualitative analysis is a nonfinancial credit analysis that complements the quantitative analysis and is regularly used by banks and other financial institutions that lend money to businesses. In addition to other information about the entity, the analysis also reveals important information such as whether the business being analyzed has competent management and whether it is likely to produce enough cash flow to service any credit that may be extended. After credit decisions have been made, credit analysts must constantly monitor the quality of the loan portfolio to ensure that the bank does not take on any unnecessary risk. This involves ranking loans according to their quality, as well as ensuring that enough cash reserves are put aside to protect the bank from possible defaults.
This course introduces nonfinancial credit analysis and includes the Five Cs used to assess credit risk, as well as Porter’s Five Forces that assess the competitiveness of a business. It then looks at a framework for evaluating the management of the business to determine its competence in performing its duties. Finally, the course briefly examines the process for analyzing asset quality in a bank’s lending portfolio and classifying assets according to their level of credit risk.
- identify characteristics of nonfinancial credit analysis
- select the components of the Five Cs credit framework
- identify components of Porter’s Five Forces
- identify corporate governance and management traits
- recognize characteristics of nonfinancial credit
- select the steps required to maintain a high quality of loan assets
- identify the loan classification
- recognize characteristics of asset analysis