Module Title: Credit and Lending
Module Director: Mr Ian Roberts
Chartered Banker MBA - Full, Accelerated and Super-Accelerated (MBA) Routes
This module explores the key areas surrounding Credit and Lending, starting with the relationship between the banker & customer, through business lending procedures and ends with credit risk practices for each type of bank (retail, business and commercial). Students studying the module will develop a detailed and critical knowledge and understanding of credit and lending in the banking industry and will also develop a range of banking skills, techniques and practices at a professional level.
Module Aims & Objectives:
On completing this module, students will be able to:
- Demonstrate an extensive, detailed and critical knowledge of the legal aspects of the banker – customer relationship
- Describe in detail the principles of lending and the main lending and credit products
- Demonstrate detailed knowledge and understanding of the procedures for taking a range of securities for advances
- Exercise a range of business banking lending skills, techniques and practices and interpret and assess business accounts, including identifying, formulating and solving business problems and assessing and managing risk in a business banking context
- Demonstrate detailed knowledge and understanding of diligence and bankruptcy
- Demonstrate an extensive, detailed and critical understanding of how the credit risk functions, and how it plays its part in managing risk for a banking business.
Means of Assessment:
This module is assessed by means of an individual assignment (40%) and examination (60%)
Unit 1 covers:
The aim of Unit 1 is to introduce Credit and Lending and to explain the main themes that run throughout the module. The structure of the module is outlined, and the main text introduced. An overview is provided of Credit Risk Management and its role in the modern financial services industry. The imperative is on a structured and practical approach to maximise profitability within the Lending portfolio. These issues are explored as important themes in modern Credit Risk Management. A fundamental approach of this module is that Credit and Lending is a central element of practical bank financial management. Indeed, a high percentage of most Commercial Banks assets are employed in the Lending portfolio. The module recommended textbook adopts the same practical approach. This approach enables Credit and Lending to be explored within its most appropriate bank strategic and managerial function, bank financial management.
Unit 2 covers:
The aim of Unit 2 Part 1 is to introduce Retail Credit- Small Business Lending and to explain a number of tools and techniques to assist the Lender in the evaluation of Credit risk. We will review the economic setting and importance of the SME sector. Theimperative is again on a structured and practical approach to maximize profitability within the Lending portfolio.
The aim of Unit 2 Part 2 is to introduce Large Company analysis and valuation; together with Stock Market performance indicators and also the use of Financial
models to predict Corporate distress. The imperative is again on a structured and practical approach to maximize profitability within the Lending portfolio. These issues are explored as important themes in modern Credit risk management. A fundamental approach of this module is that Credit and Lending is a central
element of practical bank financial management.
Unit 3 covers:
The aim of Unit 3 is to examine in Part 1 of this unit the specialised lending topic of structured finance and project finance. In part 2, to examine the specialised lending topic of Object Finance and also to understand how financial engineering techniques can reduce the cost of capital in these complex financing projects.
The imperative is again on a structured and practical approach to maximise profitability within the Lending portfolio. These issues are explored as important themes in modern Credit risk management.
Checkley, K., & Dickinson, K. (2018). Credit Masterclass (1st ed., Vol. 1). Credit Skills Academy.