A comprehensive 4-day strategic management course for banking experts that will help you to:

• Implement a successful SME strategy
• Build a SME focussed sales force and increase the cross- selling rate
• Introduce innovative products and "product bundles"
• Calculate risk adjusted pricing
• Apply standard risk cost, RAROC , economic capital and EVA
• Apply modern credit scoring systems
• Improve the credit decision process
• Implement an effective risk limit system

The 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. The course applies to general managers, regional managers and experts in the field of SME lending from developed and emerging markets. 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 delegates' understanding of all aspects of SME banking, client management and credit risk issues. Participants will learn to apply the key principles of successful SME banking to different real life situations and adopt an action plan for their own institutions.

Who should attend

• General managers and regional managers
• Heads of regional businesses and branches
• Managers in branches responsible for SME banking
• Experts responsible for sales and distribution
• Managers from credit departments and risk management
• Experts responsible for corporate strategy and planning
• Banking and strategy consultants
• Human resources and training
  

Course Level

Lending to SME customers presents one of the greatest opportunities for commercial banks to pursue growth and profitability; at the same time it ties up a large amount of economic capital and represents substantial credit risk.

Taught by an internationally experienced banking executive, this course is designed to give delegates a comprehensive overview of how to build a successful SME banking strategy and how to raise the performance of their institution. It applies to banks in developed and emerging markets. The course will teach how to use the planning process to set goals, to control costs and to increase the profitability of clients. The course focuses on the needs of SME customers, defines their product requirements and discusses efficient client relationship management. In addition, it trains on successful sales channel management, cross selling approaches and the introduction of new products and service. The concept of risk adjusted pricing and minimum pricing based on the usage of standard risk costs, economic capital, RAROC and EVA will be discussed in case studies and workshops.

The course will give hands-on examples of how to create value by implementing efficient credit decisions and creating up to date rating and scoring systems. Through examples the programme shows how qualitative and quantitative ratios are applied to examine the creditworthiness of clients and transactions. Finally, participants will assess the main risk factors in SME banking; they will learn how to mitigate these risk factors and to use an effective portfolio management.

Day 1

Welcome and introduction

Programme overview

Delegates’ expectations

Strategies in corporate banking

• An update of the banking crisis: lessons to be learned
• The competitive landscape in developed and emerging markets
• Different strategies in corporate banking

Workshop: Products and services required by customers

• Corporate banking
• SME banking
• Retail banking

 

• The profitability of different banking product
• The key success factors in
  • Corporate banking
  • SME banking
  • Retail banking

Workshop: The customers’ view of banks: How to position your bank in the eyes of your corporate clients

The importance of the planning process for SME banking

• Mission & vision statements
• Setting SMART objectives for
  • The SME banking portfolio
  • A region or branch
  • SME- account officers
• Defining financial and performance goals
  • Profit goals
  • Market goals
  • Product goals
  • Cost targets
    • Portfolio targets
• The execution of the planning process
• Review of performance goals

Workshop: Setting individual goals for a SME division, a branch or account officers responsible for SME banking

• Building an efficient SME sales network
• Defining strategic business units
• Market research and relevant data
• Successful client segmentation
• Designing the national branch network
• Delivering through different sales channels
  • Branch network
  • Internet banking
  • Direct sales forces
  • Others
• Delivering corporate finance and capital markets products
• Executing a market penetration strategy
• The role and responsibility of the regional and branch manager

Day 2

Effective client management

• Client relationship management
• Defining the client’s needs and your banks “share of wallet”
• Improving cross selling
• Dealing with loss leaders
• Calculating the client’s profitability
• Tracking sales channel efficiency

Case study: Delegates will analyse the performance of a medium sized corporate client, assess its requirements and develop a marketing strategy

Building a competitive product range

• Defining core SME products
  • Lending based products
  • Transaction based products and services
• Introducing innovative products
  • Risk management products
  • Corporate Finance products and services
  • Leasing
  • Factoring
  • Securitisation
  • Others

Workshop: Delegates will “standardise” different product offerings and apply them to the SME market

• Does bank assurance work?
• Sharing revenues and expenses
• How to build a portfolio of structured products

Case study: Identifying a corporate client’s needs and increasing the “share of wallet” for your institution.

 

Day 3

Measuring product and client profitability in SME banking

• Different concepts of measuring profitability in SME banking
  • Revenues/volume/risk-weighted assets
  • Regulatory capital
  • RAROC and RORAC
  • EVA
• Applying risk adjusted pricing in SME banking
  • Standard risk cost and expected loss expectation
  • Unexpected losses
  • Economic capital versus regulatory capital
• Establishing the minimum price for banking products
• Factors influencing the price of banking products
• Understanding the pricing practice in SME banking

Workshop: How to price a product in a competitive banking environment?

Mastering credit risk in SME banking

• Introduction to risk in corporate banking
• Developed markets
• Emerging markets
• How Basel II has changed the perception of risk
• Defining ratings for corporations
• Qualitative assessment
• Quantitative ratios
• Defining an efficient scoring system for SME customers
• Quantitative factors
• Qualitative factors
• The weighting of the factors
• What are the differences to a consumer lending scoring model?
• Defining ratios for structured lending products

Workshop: Analysing the different rating models for corporate lenders and SME clients

Case study: The effectiveness of financial ratios and qualitative factors in rating and scoring systems. How to apply them to the SME sector

Day 4

A streamlined credit decision process for SME customers

• Segregation of duties in the loan underwriting process
• Defining the appropriate approval level for loans
• Manual interference in the scoring process
• The governance of credit committees/ decisions
• Alternative route: credit decision by an expert system
• Joint portfolio responsibility

Case study: Improving the cooperation between the sales organisation and the credit department

Understanding operational risk in SME banking

• Level of operational risk
• Risk indicators
• Assessing operational risk
• How to avoid operational risk

Workshop: Calculating the potential losses from operational risk

Introduction to portfolio management

• Role and responsibility of the risk management department
• Establishing risk- limit systems
  • For portfolios
  • Regions and branches
  • Clients
• Introducing a loan transfer system
• Applying risk mitigating factors to a SME portfolio
• Establishing a value creating management information system

Action plan for your bank or area of responsibilities: What steps to be taken next!

Course summary and close

• Former member of the Executive Board, ING Europe, BHF - Bank and Bayerische Vereinsbank in New York

  The Course Director 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. He 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, he 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, he 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

  • Mezzanine Finance
  • SME Banking Masterclass: How to build a modern SME business
  • Strategic Bank Management
  • Successful Branch Network Management

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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