Course dates
A comprehensive 4-day course for banking experts that will help you to:
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Understand the principles of value creation in wholesale-retail banking and asset management
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Use different valuation methods to value a financial institution
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Compare enterprise valuation with equity valuation
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Differentiate between quantitative and qualitative factors affecting the value of banks
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Apply correctly valuations derived from the stock market, IPOs and M& A transaction
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Identify and value synergies in acquisitions
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Conduct successfully a due diligence process
- Understand why some bank acquisitions succeed and so many fail
Course background
Surging emerging and capital markets, the introduction of new products and a world- wide consolidation process in the banking industry have driven the value of banks in recent years. On the one side, the industry faces declining margins, fierce international competition and the entrance of new market participants which are threatening traditional business models. Today, for executives and managers of financial institutions it is more important than ever to understand how the valuation of their institution is influencing the strategic decisions of management, shareholders, investors and competitors.
This programme helps you to identify the different value drivers in wholesale- and retail banking and asset management. The different business segments of your banking business will be evaluated and your institution will be seen with the eye of shareholders, investors, capital markets and private equity funds.
Emphasis is given to all aspects of external valuation driven by performance ratios, financial ratios from capital markets- and transaction comparables. In addition, the course explains in detail how to value a bank from the inside by using DCF, FCF and forecasting methodologies. You will conduct a due diligence process, identify and value synergies and calculate the value contribution of the different business segments of a financial institution.
Finally, the you will plan and execute a bank acquisition and understand the importance of the integration process.
Programme features
This programme draws on the knowledge and practical experience of an internationally experienced executive who has worked for some of the largest institutions in the world. In these responsibilities, the course director has executed and advised on numerous bank acquisitions, divestitures and IPOs.
The course applies to executives and general managers in developed and emerging markets being responsible for the strategy and value creation of their financial institution. In addition, analysts, corporate finance and capital markets experts are introduced to the latest developments in valuing financial institutions and they will learn what factors are driving the value of banks.
The training will use teaching methods based around lectures, case studies, practical exercises and class room discussions. The course will use real life case studies and examples to develop your understanding of all aspects of wholesale-retail-banking and asset management valuation. You will learn to apply various methodologies of valuing banks, understand their different results and their successful application to real life situations.
Who should attend?
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Executives and General managers
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Investment and corporate bankers
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Experts in investment banking and corporate finance
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Analysts in banks, investment funds or private equity houses
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Managers in M&A departments
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Experts responsible for corporate strategy and planning
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Banking and strategy consultants
- Human resources and training
DAY 1
Understanding the bank’s strategic position
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Welcome and introduction
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Programme overview
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Delegates’ expectations
Understanding bank strategies
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The Banking industry after the financial crisis
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An updated outlook of the word economy
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Recent developments in mature and emerging markets
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Assessing the strategic position of a financial institution
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Understanding the value drivers in
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Corporate banking
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Retail banking
- Investment Banking
Exercise
Analysing the financial statement of banks
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Definitions
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Analysing the asset side under IFRS and US- GAAP
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Analysing the liability side under IFRS and US- GAAP
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Fair value of long- term liabilities
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Analysing shareholder’s equity
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Regulatory equity
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BIS- ratios
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Treatment of goodwill
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Treatment of excess capital and equity shortfalls
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Derivatives accounting
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Analysing the income statement
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The spread model
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Gap analysis
- Assessing key expense items
Exercise
DAY 2
The value of banks
Equity cash flow valuation
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Difference between equity and enterprise valuation
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Introduction to the DCF methodology
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Understanding the equity cash flow methodology
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The direct method
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The indirect method
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Calculating equity cash flow
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Understanding the key value drivers
- Decomposition of ROE
Case study
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Introduction to the Capital Asset Pricing Model (CAPM)
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Calculating the cost of equity
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Determining the market risk premium
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Understanding beta (ß)
- The cost of equity of private banks
Exercise
Introduction to the dividend discount model
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Advantages of the dividend discount model
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The Gordon Growth Model
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Understanding financial ratios
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Identifying over- and under valuations of traded banking stocks
Case study
DAY 3
Valuing banks from the outside
Valuing banks from the outside
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Valuation by multiples
- Using performance ratios to estimate the value of banks
Exercise
The acquisition of a financial institution
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Charting the bank market
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Identifying attractive markets
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Understanding market premiums
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Defining market entry strategies
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Forms of acquisitions and payment
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Organic growth vs acquisitions
Understanding synergies
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Understanding success factors in mergers& acquisitions
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Avoiding the most common mistakes
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Identifying synergies
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Cost synergies
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Revenue synergies
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New growth opportunities
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Valuing synergies in domestic and international acquisitions
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Getting synergies after the merger
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The domestic branch network
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The international branch network
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Overlapping activities
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Calculating restructuring charges
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IT implementation
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Economies of scale and scope
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Other synergies
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Time table for implementation
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Personal decision
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Business decision
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Divestitures
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Investments
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First results
- Why do some acquisition work and so many fail?
Case study
DAY 4
Executing an IPO mandate
Executing an acquisition
Case study
Post merger integration
Exercise
Valuing banks for an IPO
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Understanding recent trends in equity markets
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The market for bank IPOs
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Rationale for an IPO
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The “beauty contest”: form and contents
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Different forms of underwriting
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IPO valuation techniques
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How to choose the peer group
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How to select valuation multiples
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Estimating earnings growth
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The pricing of IPO’s in a book-building process
- Post IPO performance
Exercise
Course summary and close
Prague Hotel, Prague, Czech Republic
This programme takes place on a non-residential basis at a local hotel in Prague. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation.
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Ralf. H. Fiedler
Former member of the Executive Board, ING Europe, BHF - Bank and Bayerische Vereinsbank in New York
Ralf. H. Fiedler is an executive with over 25 years experience in banking and consultancy; he is a former member of the executive boards of ING Europe, BHF- BANK and Bayerische Vereinsbank in New York. Ralf was responsible for managing large banking networks, corporate finance and investment banking activities geared towards small and medium sized companies.
In addition, he was frequently involved in restructuring projects to increase the efficiency and profitability of bank organisations, credit processes and risk management functions. Based on his assignments, he has substantial experience in developed and emerging markets.
Prior to joining the banking industry, Ralf worked for almost 10 years for BASF, the world largest chemical company. In this capacity, he was involved in the external funding programme of the company, strategic planning and the analysis and execution of numerous acquisition projects all over the world.
Today, Ralf is specialising in working with leading banks and financial institutions to design their strategies, to enhance profitability by seeking growth opportunities and product innovation, to address risk adjusted pricing and to streamline credit policies and procedures. In addition, he teaches Bachelor and Master courses in Banking and Finance at different universities.
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
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Course dates