Ian McIsaac

Financial Training and Consultancy

























Credit Skills in Private Banking


This course will provide an understanding of the principles and practice of credit analysis in the private banking sector together with a comprehensive methodology to assess the key risk factors.

Course Dates

Course Programme:

  • The need for credit skills
  • The nature of credit risk in private banking
  • Credit culture
  • Introduction to the risk appraisal framework
Credit Policy
  • What should an effective credit policy seek to achieve?
  • Asset classes and volatility
  • Security, leverage and loan to value ratios
  • Types of transactions
  • Exposure limits
Pricing and the Bank's Capital
  • Risk and reward: to what risks does this type of lending activity expose the lender?
  • Types of capital - an examination of a bank's balance sheet, and the factors behind availability of capital.
  • Cost of capital - how the blended cost is achieved
  • The risk-adjusted return on capital (RAROC)
  • Internal risk ratings, and how much reliance may be placed upon them
Lending Principles
  • The framework of analysis
  • The Three Cs: character, capital and capacity
  • Other frameworks: CAMPARI and IPARTS
Know Your Customer
  • Character
  • Information gathering
  • Checklist and aides memoires
  • Personal interviews
  • Case studies/role play, which may be recorded for subsequent review
  • Borrower, purpose, amount, repayment and terms
  • Purpose of security as safety net
  • Categories of security and their volatilities
  • Some leading indicators on the likely trend of security valuations
  • Legal terms: charge, lien, pledge etc, and their significance to a lender
  • Guarantees and comfort letters
  • Case exercises: security issues
  • Contents of loan agreements
  • Covenants
  • Security documentation
  • Enforceability and other legal issues