The Banking Fundamentals Academy is made up of 3 individually bookable modules and you can read the full course agendas by clicking on the invidual modules on the Oveview tab or below. 

The Banking Fundamentals Academy is made up of 3 individually bookable modules

Banking Fundamentals Academy: 1 - Banking Products and Services

Banking Fundamentals Academy: 2 - Corporate Banking

Banking Fundamentals Academy: 3 - Transaction Banking

MODULE  1:

DAY ONE

Understanding the financial system and the role of a bank

• Defining the structure, role, and linkages of the global financial system

• A brief history of banking and answering the question what is a bank?

• Exploring the distinct types of banks

  • Retail, commercial, investment, private, and universal banks

• The organisational structure of a commercial bank

  • Structure of a bank and the role of each division
  • The role of the front, middle and back-office functions

• Traditional banking services vs. modern services

• Reputational risk and corporate governance

Understanding the deposit base and funding of a bank

• Show the account opening process - introductions, references & documentation

• Examine the role of compliance, KYC, AML, CFT and treat of conduct risk

• Examine client confidentiality, the bank’s duty of secrecy and data protection
• Understand contractual life vs behavioural life, ‘sticky deposits’
• Differentiate between retail deposits & business deposits

Case study: Review of selected pages from the bank’s annual report

How a bank generates income

• Outline the process of maturity transformation

• Understand how banks generate income and the different income streams including - net interest income, non-interest income, trading income and other income

• Ways to analyse a bank’s profitability including income diversity

• What is net interest margin (NIM)?
• Examining a bank’s income statement

• Key performance indicators (KPI’s)

Case study: Review of selected pages from a bank’s annual report

Defining risk in banking and banking regulation

• Define the key role and functions of a central bank

• Understand the key risk types facing banks, why and how banks are regulated

• Types of bank risk: credit risk, market risk, operational risk, reputational risk, other risks

• Understand the Basel capital requirements placed on Banks and defining CET 1

• Defining the restrictions placed on a bank regarding leverage, stable funding, and liquidity.

• Regulatory need to maintain high-quality liquid assets (HQLA) for the liquidity coverage ratio
• Capital requirements and Basel III

Key bank performance indicators

• Examine return on assets, return on total equity, loan to deposit ratio, cost income ratio, non-performing loan (NPL) ratio and the capital adequacy ration

DAY TWO

Retail banking overview

• Recognise why individuals come to a bank?
• The concepts of fairness and transparency in banking transactions

• The importance of Know Your Customer (KYC) and Anti-Money Laundering (AML) regulation

• Outline the basic services offered by retail banking

  • Accounts, lending, insurance, mortgages, and money transmission services

• Define the life cycle of a personal customer and product matching during the cycle
• Understand customer interaction- physical branch, sky branch and digital banking 

Retail lending products

• Describe the process of credit assessment, qualification, and affordability

• Explore mortgage loans

  • What is property
  • Mortgage types, mortgage pricing and approval process
  • Mortgage documentation, appraisals, and security registration
  • Construction loans and the mechanics of construction loans

• Outline of additional consumer loan products

  • Types and structure of consumer loans – secured vs. unsecured
  • Understanding annual percentage rate and interest payments
  • Auto financing – loans vs. leasing

• Outline of credit card services

  • Types of cards, credit card terminology and what the numbers on a credit card mean

  • Mechanics of credit card transactions

  • Analytics of credit card risk

Additional retail banking services

• Identify other personal banking activities that generate non-interest income

  • Foreign exchange services
  • Share dealing and brokerage service
  • Insurance services – life, vehicle, and home

  • Money transmission services

Private banking services

• Defining private banking, who are the clients and how are they engaged?

• Understand the fundamentals of investing

  • Why invest?

  • The investment mandate, and investment policy statement (IPS)

  • Selecting asset classes

  • Characteristics of an investment portfolio

DAY THREE

Corporate banking overview

• Why does a corporate customer come to a bank?

• Understanding the distinct types of corporate customers and market segmentation
• Defining the customer relationship – Transactional, cross selling, advisory or first call

• The life cycle of a corporate – start-up, growth, maturity, and decline

• What is the role of a corporate treasurer?

• How can a bank and the relationship manager add value to the corporate treasurer?

• What needs financing and how can the bank help?

Corporate credit risk

• Understand how credit risk differs between retail and corporate customers

• Understand how to assess a corporate credit proposal

• Measuring cash flow
• Debt a firm can sustain while maintaining acceptable credit standards
• Drivers of debt capacity and key constraints

Corporate lending products

• Working capital and why it matters – working capital ratios, receivable days, payable days and inventory days, DSO, DIO, and DPO

• Working capital products – RCF’s, invoice discounting/ factoring, and supply chain finance

• Secured, unsecured term lending, club, and syndicated loans

• Repayment and collateral protection

• What are covenants, why use them

  • Good design -Conventional and financial
  • Setting covenants - seasonality, information, and general

• Actions upon breach

Global markets

• Role of capital markets
• Overview of key segment and roles in an investment bank e.g., DCM/ECM, syndicate, sales & trading, corporate finance, and research

• Brief overview of debt and equity markets

• FX markets

• Understanding investors and their differing requirements

Interactive case study: Corporate exposure to FX risk

DAY FOUR

Correspondent banking services

• Outline the need for correspondent banking and the role of correspondent banks
• Identify the benefits to a bank of offering clearing services

Cash management services

• Why cash management services are attractive to a bank
• Risks to a bank, KYC - anti-money laundering
• Clearing services
• Correspondent banking – cross-selling opportunities
• Examining what cash management means to a corporate treasury team

Payment and collection services

• Examine the nature of payment operations
• Outline multiple collection types, multi delivery channels, and geographical challenges
• Examine the nature of collection operations
• Identify the issues with domestic vs. cross-border collections
• Define the use of virtual accounts and lock-box services
• Listing potential clients for payment and collection services

Trade finance services

• Risk issues for a corporate conducting a trade finance transaction

  • Country risk, currency risk, commercial risk, and bank risk
• International trade documentation (commercial, official, shipping, insurance)
• Delivery terms, the use and impact of Incoterms 2020

• How a bank provides trade finance solutions to corporate customers through documentary collections (DP and DA), and letter of credit

• Letters of credit – issuing, confirming, and discounting

Treasury and risk management solutions

• Defining market risk and how corporate customers are exposed to market risk

• Outlining the corporate solutions offered by Riyad Bank to mitigate these market risks

• Forward rates and how they provide certainty of a rate or price

• Interest rate swaps (IRS) – mechanics and cash flow, features and uses in funding

• Use of options and how they can be used to create certainty

• Interest rate options - caps, floors, and collars

Documentation ISDA Master Agreement and the CSA

DAY FIVE

Putting it All Together and Communications

Exploring the bank’s balance sheet

• Introduction to the balance sheet of a bank, the main components of a bank balance sheet

• How bank financial statement are different to other companies

• What are bank assets

  • • Secured vs unsecured lending, interest rate, diversification, concentration, and correlation risk
    • Exploring the regulatory need to maintain high-quality liquid assets (HQLA) for the liquidity coverage ratio

• What are bank liabilities

  • • Exploring how banks are funded and the need for stable funding – loan to deposit ratio

Overview of economics

• Components of demand, how GDP growth is reported
• Function of fiscal and monetary policy
• Understand what is meant by inflation and the central bank’s use of interest rates in inflation control
• Defining unemployment

• What are economic indicators?

Interactive case study: Impact on financial markets of a central bank rate rise

Understanding the financial press

• Understanding the financial press - Financial Times (FT) review
• What to read if you only have 30 seconds, 5 minutes, and 15 minutes 

Interactive case study: Review FT for economic data, key market, industry, and regulatory news

Communicating

• Recognise the importance of communication skills in all client contacts

• Building trust and benefits of client trust

• Perception – what do you see, and creating the first impressions

• Objective of the client contact

• Are you listening?

• Answering questions

MODULE  2:

Day ONE - Defininf a Corporate, Strategic, and Reputational Risk Including ESG Considerations

Defining a Corporate

• Sole traders, partnerships, and limited liability companies

• What is equity, types of shares and shareholders rights

• Objectives of a company and business model

• How a company is structured and the roles within a company

• Understanding the distinct types of corporate customers and market segmentation

• The life cycle of a corporate – start-up, growth, maturity, and decline

Strategic and Reputational Risk

• What is strategy, defining strategy and strategic thinking

• Strategic models

• Defining corporate ESG considerations

• What is reputational risk, and corporate governance

• Risk management decisions

Corporate banking overview

• Why does a corporate customer come to a bank?

• Positioning the bank, the correct mix of interest vs. non-interest income

• Understanding the distinct types of corporate customers and market segmentation
• Defining the customer relationship – transactional, cross selling, advisory or first call
• The concepts of fairness and transparency in banking transactions

• The life cycle of a corporate – start-up, growth, maturity, and decline

• What is the role of a corporate treasurer?

• How can a bank and the relationship manager add value to the corporate treasurer?

• What needs financing and how can the bank help?

DAY TWO - Fundamentals of Accounting

Introduction to Accounting and Accounting Concepts

• What is accounting?

• Keys accounting concepts; prudence, going concern, matching, materiality, and consistency

• Who are IFRS and what are IFRS standards?

•  What are corporate assets, liabilities, and equity and how do these definitions differ from those used in a bank

• Accounting terms - Cash vs. accruals, accruals, and prepayments, accrued income and deferred income, depreciation and amortisation, goodwill, impairments, costs – types, opex and capex

Introduction to Financial Statements

• Users of the financial statements

• The Income Statement

  • Revenue, cost of goods sold, gross profit, operating profit, net profit, and margin

  • Profitability – gross, operating, and net margins

  • EBIT, EBITDA, and analysis of each

  • Understanding depreciation and inventory valuation

  • Examining both a corporate and bank income statement

More on Financial Statements

• The Balance Sheet

  • Understanding capital employed, capital – sources and uses, balance sheet structure for distinct types of companies, the relationship between the balance sheet and the income statement

  • Goodwill, intangibles, provisions, and treasury stock

• The Cash Flow Statement

  • Profit vs. cash

  • The relationship between the balance sheet, income statement and cash flow statement, operating cash flow, investment cash flow and financing cash flow

• The Statement of Change in Equity

  • Review of a corporate statement

• Building a set of simple financial statements

DAY THREE - Methods of Financing a Corporate Customer

Financing the Balance Sheet

• Funding current and non-current assets

• Cost of debt and the cost of equity

• Dividend capitalisation model, CAPM and WACC

Working Capital and Working Capital Funding Solutions

• Working capital and why it matters – working capital ratios, receivable days, payable days and inventory days, DSO, DIO, and DPO

• Working capital products – RCF’s, invoice discounting/ factoring, and supply chain finance

Long-term Financing

• Secured, unsecured term lending, club, and syndicated loans

• Repayment and collateral protection

• What are covenants, why use them

  • Good design -Conventional and financial
  • Setting covenants - seasonality, information, and general

• Actions upon breach

• Debt and equity capital markets

• Expected loss and the mechanics of credit ratings

• Ratio analysis, credit ratios

• Return ratios including gearing, interest coverage, liquidity, quick ratio, and current ratio, 

Project Finance and Other Forms of Finance

• The nature of project finance

• Understanding the key players in a project finance transaction

• The mechanics of hire purchase and leasing

Corporate credit risk

• Country risk – PESTEL analysis, lessons from history, industries at greater exposure to sovereign credit risk

• Industry risk analysis – maturity cycle, cyclicality, profitability, dependence, regulatory environment, and Porters 5 forces

• Corporate credit risk – using internal and external credit ratings

• Measuring cash flow
• Debt a firm can sustain while maintaining acceptable credit standards

DAY Four - Correspendent Banking and Cash Management Solutions

Correspondent banking services

• Outline the need for correspondent banking and the role of correspondent banks
• Identify the benefits to a bank of offering clearing services

Cash management services

• Why cash management services are attractive to a bank
• Risks to a bank, KYC - anti-money laundering
• Clearing services
• Correspondent banking – cross-selling opportunities
• Examining what cash management means to a corporate treasury team

Payment and collection services

• Examine the nature of payment operations
• Outline multiple collection types, multi delivery channels, and geographical challenges
• Examine the nature of collection operations
• Identify the issues with domestic vs. cross-border collections
• Define the use of virtual accounts and lock-box services
• Listing potential clients for payment and collection services

Trade finance services

• Risk issues for a corporate conducting a trade finance transaction

  • Country risk, currency risk, commercial risk, and bank risk
• International trade documentation (commercial, official, shipping, insurance)
• Delivery terms, the use and impact of Incoterms 2020

• How a bank provides trade finance solutions to corporate customers through documentary collections (DP and DA), and letter of credit

• Letters of credit – issuing, confirming, and discounting

DAY Five – Corporate Risk Management and Corporate Valuation

Treasury and risk management solutions

• Defining market risk and how corporate customers are exposed to market risk

• Outlining the corporate solutions offered by a bank to mitigate these market risks

• Forward rates and how they provide certainty of a rate or price

• Interest rate swaps (IRS) – mechanics and cash flow, features and uses in funding

• Use of options and how they can be used to create certainty

• Interest rate options - caps, floors, and collars

• Documentation ISDA Master Agreement and the CSA

Corporate Valuation Approaches

• Fundamentals of corporate valuation - intrinsic vs market value

• Relative vs. absolute value analysis

• Examine return on capital employed (RoCE), return on invested capital (RoIC) return on assets (RoA) and return on equity (RoE)

• Relative value and the use of ratios, including earnings per share (EPS), price/earnings ratio (PE ratio), and price/earnings to growth (PEG ratio)

• Discounted cash flow analysis

• Mechanics of discounting – PV of both free cash flow and terminal value

Real Estate Valuation Techniques

• What is real estate?

• Examining a real estate project feasibility study

• Real estate appraisal techniques

• Cost approach

• Market approach - physical comparison and gross income multiplier (GIM)

• Income approach – net operating income and capitalisation rate

MODULE  3:

DAY One -  Introduction to Cash Management, Working Capital, and Financing Working Capital

Introduction to cash management

• Define what the treasury function and the treasurer are responsible for
• Outline the corporate objectives of cash management
• Identify why cash management is attractive to the bank
• Name the benefits of good cash management to both the corporate and the bank
• Examine the business and corporate operating cycle

Interactive exercise: Review of the objectives of cash management

Interactive exercise: Review of the benefits to a bank of cash management services

Importance of working capital

• Describe working capital needs, working capital vs. operating working capital
• Recognising why working capital matters
• Outline positive and negative working capital and the implications of both
• Define the cash conversion cycle (CCC)
• Outline the use of working capital metrics
• Recognise how a corporate might improve the efficiency of working capital
• Show the dangers of overtrading

Interactive case study: Exploring working capital metrics

Working capital financing

• Identifying the methods of financing working capital
• Describe receivables management, use of trade discounts
• Examine payable management and advantages of improving payables
• Show the use of bank overdrafts, revolving credit facilities and commercial paper
• Recognise alternative methods of working capital finance

• Outline the mechanics and use of: Confidential invoice discounting, receivables financing, factoring and supply chain financing (SCF)

Interactive case study: Structural differences between confidential invoice financing and factoring

Liquidity management

• Define the role and benefits for liquidity management
• State the aims of cash sweeping, cash pooling
• Define the mechanics, benefits and risks of cash sweeping and cash pooling
• Define the mechanics, benefits, and risks of notional pooling
• Outline the mechanics of interest optimisation and aggregation
• Show the options available for investing a cash surplus
• State the risks vs. returns on investing a cash surplus

Interactive exercise: Benefits of cash sweeping

Day Two – Accounts, Correspondent Banking, Payments and Collections, Card, and SWIFT Services

Account services

• Describe corporate accounts and accounts services
• Recognize the need for “Know Your Customer” (KYC) and Anti-Money Laundering (AML)
• Examine the role and nature of Basel III changes on a bank’s capital and funding structure
• Define “sticky deposits, Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR)
• Identify operational and non-operational corporate relationships

• Electronic Banking – IBAN and Bank Identifier Code (BIC)

Interactive exercise: KYC screening and check list

Correspondent banking services

• Outline the need for correspondent banking and the role of correspondent banks
• Explain the use of Nostro and Vostro accounts
• Identify the benefits to a bank of offering clearing services
• Examine the central bank’s role in the international payment system

• Define the fundamentals of: Real Time Gross Settlement (RTGS), Net Settlement Systems (NSS) and Single European Payment Area (SEPA)

Payment and collection services

• Examine the nature of payment operations
• Outline multiple collection types, multi delivery channels and geographical challenges
• Examine the nature of collection operations
• Identify the issues with domestic vs. cross-border collections
• Define the use of virtual accounts and lockbox services
• Listing potential clients for payment and collection services

Interactive exercise: Examining the benefits of efficient payment and collection mechanics on working capital needs

Card services

• Define the types of card services available through a bank – charge, debit, and credit
• Show the mechanics of credit card transactions
• Describe individual and corporate card services
• Corporate linking and card association
• Outline the risks associated with cards and card risk management
• Define card acquiring services

Interactive exercise: drawing the mechanics of the card payment process

Interactive exercise: Risks associated with card acquiring

SWIFT services

• Introduction to SWIFT and SWIFT message standards
• Define the need for and the use of SWIFT messages
• Outline the message types and formats, standardisation of messages
• Describe the SWIFT for corporates services
• Objective of ISO messages

Interactive exercise: Review of standard SWIFT messages

Day Three  – Client Access, Introduction to Securities Services, Safekeeping and Fund Services

Client access

• Describe developments in client access
• Examine individual and corporate electronic banking services
• Outline innovations in electronic banking
• Reporting, data management and data enrichment services
• Define treasury to bank communications

Interactive exercise: Review of innovations in electronic banking

Overview of trading and a trade

• Define a trade, the process of trade creation and the market participants
• Show forms of trade execution – OTC and exchange traded
• List pre-trade checks – legal and compliance

Operational overview

• Define the Straight Through Processing (STP)
• Recording static data, what it is and why is it important?
• Describe trade capture, identification, validation, enrichment, and conformation
• Recognise trade reporting – MiFID and OTC reporting practical considerations

Clearing, settlement process and safekeeping

• Define clearing, settlement and safekeeping and timeline for each activity
• Outline both the Delivery vs. Payment (DVP) and Delivery free of Payment (DFoP)
• Describe the process of central clearing and what are the advantages

• Examine settlement instructions and Standard Settlement Instructions (SSI)

  • Outline the roles of fund services including Accounting & administration, compliance monitoring & reporting, and performance measurement & risk analytics

Inventory management

• Recognise the need for and process of Stock Borrow and Lending (SBL) and Sale & Repurchase Agreement (Repo)

Corporate actions

• Describe the nature of corporate action, voluntary and involuntary

• Examine each of:

  • Dividend and coupon payments
  • Stock splits and consolidations
  • Stock buybacks

Operational risk

• Understanding the nature of operational risk

Day Four  – Introduction to International Trade and Trade Finance

What is trade finance?

• Describe the origins and background to international trade
• Define the objectives of trade finance for the perspective of a bank
• State the bank’s view on risk mitigation, financing, settlement, and balance sheet management
• Outline which countries are the top 10 exporters and importers and the products traded
• Examine the participants connected to a trade finance transaction

Understanding the risks associated with trade finance

• Outline the potential dangers with international trade
• Defining the risk issues with international trade for the exporter and importer
• Examine how to mitigate potential risks

Interactive exercise: Review of the potential risks for both an exporter and an importer.

International trade documents

• Recognise that international trade means the flow of each of goods, documents, and cash
• State why documents are important
• Define the essential trade related documents
• Examine of trade documents -
• Commercial documents - Sales contract, invoice (commercial, tax, customs and consular)
• Transportation documents - Bill of Lading, air waybills, packing lists
• Insurance and financial documents - Insurance policy, bill of exchange, promissory note
• Official documents - Certificates of origin, certificates of inspection, analysis certificate and health certificate

Interactive case study: Examining a sample of above documents and what do they tell you?

Terms of delivery

• Define the role of the International Chamber of Commerce
• Describe the use and scope of Incoterms 2020?
• Examine underlying methods of delivery

Interactive exercises: Review of the Incoterms 2020 and cost comparisons of different Incoterms

Methods of payment

• Define the fundamental problems with international trade

• Identify the risk ladder

• Examine trade payment terms

• State the role of a bank in the payment process

• Describe the process of clean payments - open account vs. payment in advance

• Show the risks associated with both payment methods

Interactive exercise: “mapping out” cash flows and the flow of goods and documents

Day Five  – Documentary Collection, Letters of credit, and Bond and Guarantees

Documentary collections

• Outline the relationship between the parties in a documentary collection
• Define and review the structure of documentary collections
• Delivery against acceptance, delivery against payment and avalisation

• List the risks and benefits of documentary collections

• Examining the duties of the banks involved with documentary collections

• Define the conditions for release of documents

• Introduction to The Uniform Rules for Collections published by ICC - URC 522

Interactive exercise: Participants in teams will “map out” the cash and document flows for documentary collections.

Bank financing associated with documentary collections

• Define a Bill of Exchange

• Outline the use of post shipment financing - export bills under collection & discounting, import bills under collection & avalisation and bill discounting against buyer risk (BDBR)

• Recognize the risks to a bank with financing under documentary collection

Interactive case study: Comparing Bills of exchange and promissory notes

Letters of credit

• Examine the bank – customer relationship and how it differs from documentary collections
• Define and review the structure of a letter of credit

• Describe common forms of lets of credit

  • Irrevocable, irrevocable confirmed and transferable

• Recognise the “Golden rules of a letter of credit”

• Examine the duties of the banks involved with a letter of credit

• List the risks and benefits to the exporter and importer of a letter of credit

• Outline the risks to the bank associated with issuing, advising, and confirming a letter of credit
• Show the advantages of confirmation of a letter of credit to the beneficiary
• Introduction to the International Chamber of Commerce UCP 600 Rules

Interactive exercise: Participants in teams will “map out” the cash and document flows for different letters of credit products.

Standby letters of credit and bonds and guarantees

• Outline the structure and potential use of a standby letter of credit
• Examine the mechanics of standby letters of credit

• Describe the use of guarantees and bonds including Tender/bid bonds, performance bonds, retention bonds/guarantees and warranty bonds/ guarantees (maintenance bonds)

• Introduction to International Standby Practice 98 (ISP 98) and The ICC Uniform Rules for Demand Guarantees 758 (URDG 758)

Interactive exercise: Participants in teams will “map out” a timeline for the use of guarantee and bond products.

Our Tailored Learning Offering

Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company’s exact requirements? If you’d like to do either of these, we can bring this course to your company’s office. You could even save up to 50% on the cost of sending delegates to a public course and dramatically increase your ROI.

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