COURSE OUTLINE FOR BANKING AND INVESTMENT ANALYSIS

COURSE INSTRUCTORS: GLADYS A. A. NABIEU (Mrs.)                LEVEL: 400                          CODE: PBBF 405

COURSE TITLE: BANKING AND INVESTMENT ANALYSIS

COURSE DESCRIPTION:

The design of this course provides a broader overview to the subject matter of banking and investment. This course aims to provide students an insight into the functioning of the Banks and FIs (Financial Intermediaries). With financialization of the Global Economy, Banks and other FIs (Financial Intermediaries) have played an increasingly dominant role in the creation of credit and new financial services that have had far-reaching implications in every walk of our lives. Therefore an understanding of how banks and other financial intermediaries are managed; is extremely important for insights into the workings of the Global Economy.

Banking and Investment Analysis is a two-tier course. The first leg of this course provides the students with an opportunity to gain a better understanding of banking concepts. It will introduce students to the world of banking by looking at the industry both from a historical and present day perspective. The course will help the students to examine, how the focus in banking has shifted from a historical product-driven focus to a customer-driven focus and the ways in which banking is using multiple channels to service customers rather than relying solely on banking offices. It will also provide insight into electronic banking channels being employed by the banks to communicate with their customers and how the banking globally has transformed from traditional branch banking to E-banking based on internet, using computers and smart phones. Moreover it introduces them to the international regulations and its developments throughout the last decade and enables them to assess the compliance issues banks should keep.

Further, the course aims to introduce students the financial services industry; mainly the unique nature of its financial statements and the risks that are faced by banks. Considering the effects of poor risk management on the failure of banks. The importance of risk management in banks is becoming the most important function in bank financial management. This course enables the students to indentify the different risks faced by banks and how to calculate them then how to manage those risks. The course will ensure that the students are able to understand the core and the most important theoretical and practical banking concepts and functions in deposits mobilization.

The second leg of this course discusses how the deposits mobilized from the bank is put into prudent investments ventures to yield the maximize the firm and shareholders' value.  The course basically entails key topics including: types of banking, banking operations, bank regulations, some aspect of investment management and securities analysis. This course applies the tools of investment in financial decision making. Emphasis is placed on developing a framework for understanding the economic nature of banking and investment, current trend in banking and investment, the concerns coming up and their resolution.

PRE-REQUISITES

This course is designed for degree course in banking and finance. It assumes the reader has completed a first course in elements of banking, financial statements analysis, introduction to business finance as well as quantitative methods. There is the need for students to update themselves on topics such as: types of securities available to businesses, the risk and return relationship in investment, the financial markets in an economy etc. so that students understand how decisions in the banking sectors are made. etc. The breadth of the material covered during the course can be extensive but the contents are not excessively technical in nature.

COURSE OUTCOMES  

Upon successful completion of this course, students will have developed an understanding of an economy’s banking and investment environment, the types of securities traded in an economy, the appraisal of good banking investment activities as they relate to the financial management of the firm and its interactions with the financial markets. Specifically students will:

• Examine the special role, structure and performance of banking and investments in an economy.
• Demonstrate knowledge and understanding of banking and risk management in the banks through analytical studies
• Demonstrate a range of skills acquired in banking & investment relevant for financial decision-making and problem solving
• Acquire the skills necessary to undertake a higher research degree and/or for employment in a higher capacity in industry or area of professional practice relating to banking and investments.

·         Have a broad understanding of the investment banking industry and its interdependence with other parts of the financial world

·         Recognize the key services and products provided by the a bank and what these services and products mean to end-users

·         Develop independent thinking, by analyzing news items from a banker’s standpoint: how and why the deals are done, how the products are sold and risk managed, how the money is made

·         Broaden and deepen their understanding of banking by utilizing tools and methods learned from other courses such as: quantitative methods, risk management, securities markets and derivative products and applying them in the banking industry.

·         Develop effective communication in oral and written English through group presentations, assignments, quizzes as well as sharing and appraising each other’s works.

·         Discuss the ethical and professional responsibility of  bankers, identify  the importance of personal and organization integrity in this industry.

·         Learn teamwork skills and become more effective team members and leaders

·         Assess whether a career in a bank is what they would like to pursue and have a reasonable amount of knowledge about the industry which will be helpful for their application for internships and positions

COURSE OBJECTIVES                                                                                                                                                                                

This course is designed to provide students with a deeper understanding of how banks mobilize and manage its business activities in the `real world'. The primary objective is to provide the student with the tools to understand and solve the basic banking and investment decisions confronting both individuals and businesses today. Specifically, the objectives of this course are to:

·         Enable students to recognize the basic tools used by depository financial institutions for financial and investments decisions making under all conditions.

·         Expose students to the various ways by which firms may raise and invest funds from the financial markets.

·         Aid figure out the reason for bank regulation and its implication on the financial system of an economy

·         Appreciate the nature of legal relationships between the banker and the customer.

·         Improve students’ understanding of contractual terms and their importance in business and financial services.

·         Acquire  the language for describing the banking financial institutions and its performance

·         Enhance the ability to understand and discuss banking news and trends as presented in the media.

·         Enable the students to be able to write various report papers and correspondence on specialized banking topics

·         Study the various products and services offered by the modern bank.

·         Grasp the credit appraisal mechanism and appreciate the bank profitability in greater detail.

·         Develop the basic understanding of e-banking specially in relation to banks.

·         Provide the necessary skill set to work in e banking environment and foster understanding of future vision and of e-banking.

·         Understand the process of financial intermediation and dis- intermediation.

·         Have a thorough knowledge of expanding financial services industry.

·         Provide students with a good understanding of the basic principles of the  banking business in Ghana.

·         Develop a perspective regarding the new opportunities emerging for banks in the financial sector.

·         Help students analyze a firms securities using fundamental and technical scrutiny for both personal and business investment decision making.

COURSE OUTLINE IN A WEEKLY FORMAT   

WELCOME TO THE CLASS OF BANKING AND INVESTMENT ANALYSIS

First Week:                GETTING STARTED: COURSE EXPECTATIONS AND INTRODUCTION

You are all welcome to the Class of banking and investment analysis where every individual would be given the opportunity to get involved in all discussions through participation. It is our hope that you would take advantage of the opportunities offered by this learning environment to achieve the objectives you have set for yourself. Good Luck.

Week 1:  Overview of Banking – What are Banks

Introduction

The Meaning of a Bank and Banking Business

Types of Banks

The Banking Structure in Ghana

Banks and the Principal Agent Problem

The Economic Functions and the Role of Banks in a Modern Economy

Conclusion

Week 2: Banking Operations – What do banks do

                        Introduction

                        The Banker and Customer & Banker-Customer Relationship

                        Opening and Operating Bank Accounts

                        Cheques

Standard Banking Services

                        Types of Banking

                        Conclusion

Week 3: Central Banking

                        Introduction

                        The objectives of the central bank

                        The main functions of Central Banking

                        Policies of the Central Bank

                        How does central bank Monetary Policies work

                        Conclusion

Week 4: Global Regulation of Banks

                        Introduction

                        Meaning of Bank Regulation

The Rationale for Regulation

                        The General Principles and Requirements of Bank Regulations

                        Types of Bank Regulation

                        International Regulations

                        Drawbacks of Regulation

                        Conclusion

Week 5: Managing Banks

                        Introduction

                        Banking Business Operation Replica

                        The Bank Balance Sheet and Income Structure

                        Bank Performance and Financial Ratio Analysis

Managing Banks

Asset Management

                                    Liability Management

                                    Liquidity Management

                                    Capital Adequacy Management

                                    Off-Balance Sheet Management

                                    Loans Securitization              

                                    Conclusion

Week 6: Risks and Management of Risks in Banking

                        Introduction

                        Categories of Fundamental Risks in Banks

                                    Credit Risk

                                    Interest Rate Risk

                                    Liquidity risk

                                    Market Risk (Trading Risks)

                                    Operational Risk

                                    Capital Adequacy Risks

                                    Other Categories of Risks

                        Conclusion

Week 7: Overview of Investment Management

                        Introduction

                        Meaning of Investment and Investment Analysis

                        Nature of Investment

                        Investment Environment

                        Conclusion

Week 8: The Investment Process

                        Introduction

                        The Investment Process

                        Participants of the Investment Process

                        Regulatory Bodies

                        Conclusion

Week 9: Financial Market Analysis

                        Introduction

                        Meaning of Financial Market and Types of Financial Markets

                        How Companies Raise Capital in Financial Markets

                        Analysis of Financial Markets

                        Conclusion

Week 10: Securities Analysis

                                   Introduction

                                   Fundamental Analysis

Economic Analysis

Industry Analysis

Company Analysis

                                    Technical Analysis

                                    Conclusion

Application Pedagogy:

Lecture format will include discussions, group work, presentations, as necessary. Student will be expected to participate actively in all teaching and learning activities. Students will be expected to read the text or other assigned recommended readings.

Guide to Final Examination and Assessments

There shall be assignments, unannounced quizzes and mid-semester exams from various topics in the Course Outline. The final examinations shall be a two and half hour paper with a compulsory section. Allocation of Marks shall be as follows;

Final Exams                                                                                                                70%

Assignments / Mid-Semester Exams / Group Work / Interim Assessment                 30%

 Total                                                                                                                          100%