Credit Risk Analysis for Corporate Bankers


This course provides an intensive applied workshop for participants who are seeking to develop a strong command of financial statement analysis and who are looking to decipher the concepts behind the financials. At the end of this course, the participant will be able to identify the trends in the financial ‘story’ and fully analyse the financial strength of the company based on the links between the income statement, balance sheet and cash flow statement.

In addition to corporate bankers this course is also useful also for new banking risk team members who need to understand financial risk as part of their risk analysis.

  • Financial statement analysis including the detailed analysis of the content of the main financial statements and how they are interlinked
  • A review and application of the key banking and financial ratios that are used as part of corporate credit analysis of companies
  • Interpreting information contained in the financial statements from a holistic perspective in order to understand the financial performance and strength of the client company
  • Detailed cash flow analysis and the importance of the client company generating sustainable cash flows into the future.

JBS provides a wide range of comprehensive, intensive credit risk analysis courses to its banking and finance clients which focus on assessing credit risk analysis from a holistic, quantitative and qualitative perspective. These courses are tailored to the specific needs of the banking client and can be tailored to a range of delegate expertise, from introductory and graduate level, up to senior management. JBS also works with senior banking executives and board members in designing executive credit programmes for senior banking staff seeking to refresh their credit analysis skills.

During the training programme design stage, JBS’s professional credit trainer will work with the client’s Banking team as well as their Learning and Development team to design a course that is specifically tailored to those areas where the bank’s analysts, relationship managers and corporate credit officers need specific training. The aim is to provide practical, applied workshop sessions in credit analysis that can be applied directly to the banker’s everyday banking tasks and improve their overall credit risk performance once they return to their desks after the course.

Heavily based on real world case study project work and analysis, delegates in their project teams, will be required to analyse a number of corporate credit case studies and provide debt structuring solutions for their financing requirements.

The main of the emphasis of the workshop is to train delegates in the tools required to move beyond simple financial risk and financial statement analysis, to a holistic review of the company’s overall credit risk status. The course will use a tool kit of techniques that the credit analyst can use in assessing strategic and external risk factors, management risk and other market and industry risks that can affect the company’s ability to generate cash flows into the future.

  • Review and application of quantitative analysis to understand the prevailing credit risk of the client company
  • Business analysis of the strategic development of the company and its impact on the client’s credit risk
  • A full qualitative analysis on the company’s operations, products and services and its successful creation of business opportunities through the creation of critical success factors
  • Techniques in detailed management due diligence and risk analysis
  • An introduction to formalised credit risk management in order to identify risk mitigants as part of the debt structuring process
  • The application of risk sensitivities to cash flow forecasting to understand the impact of risk crystallisation on cash flow generation.

A modular course designed for corporate lenders who want to develop a holistic understanding of business analysis and diagnostics. This two day course Is useful for intermediate level and senior bankers who are looking to enhance their credit analysis skills by assessing potential clients from a detailed, business perspective. This is essential for all bankers investing in businesses or lending to corporate clients based on cash flow forecasting.

  • Review of the key business analytical tools required to assess the full business case for lending to a client company, organised as the four Ms of Business Diagnostics.
  • Detailed analysis of the potential client company from a strategic perspective
  • Application of tools used to undertake detailed market and industrial analysis
  • Management due diligence and the importance of anticipating and mitigating management risk
  • Application of an internationally used risk management framework used in identifying, assessing and managing credit risks.
  • Using cash flow analysis and forecast cash flow modelling to sensitise the principal risks affecting the company and assessing the company’s ability to generate cash flow.

In the wake of the global financial crisis the international banking regulators in Basel have increasingly emphasised the need for corporate bankers to focus principally on the future cash flows generated by their corporate clients, as their principal source of debt repayment.

This greater move toward a reliance on future cash flows and away from the securitisation of loans by the fixed assets of the client to protect the bank’s exposure, has meant that bankers need to develop a detailed knowledge of the future cash flow forecasting and cash flow sensitivities as a central part of their credit risk analysis and debt structuring.

This applied workshop is designed for all corporate bankers, lending to major corporates or SMEs on a cash flow basis. The course provides a comprehensive insight into the creation of financial models and cash flow forecasts, in order to allow delegates to run sensitivity analyses for corporate clients. Using the cash flow forecasting sensitivity techniques during the course, the delegates will used case study scenarios to structure debt facilities for their client companies.

  • Importance of cash flow analysis in debt financing
  • Why profit and EBITDA does not spell cash flow
  • Using cash flow analysis to identify key financial and credit risks
  • Assessment of working capital management on cash flow projections
  • Using financial modelling and cash flow forecasting in structuring the debt facility

This credit writing skills course has been designed for corporate bankers, relationship managers and investment officers who are responsible for the drafting and submission of credit and funding applications to their respective institutions’ credit and investment committees.

The course focuses on both the content as well as the style required to present a comprehensive overview of the credit or investment proposal to senior management at financial institutions with the aim of providing an holistic overview of the strengths and risk mitigants of formal funding proposals. The emphasis is on presenting sufficiently detailed information and fully analysed recommendations to assist senior delegates to take credit and investment decisions.

During the course workshops, participants will draft sections of a credit or investment proposal and review the credit writing style and content with the course director and the other participants.

  • Introduction to the principles of effective credit writing skills and the need to instil confidence in the reader.
  • Review of the typical content that must be included in credit and investment presentation
  • Importance of strategic, market, industrial and managerial analysis and review
  • Workshops covering the style and detail of the credit business writing, including methods in conveying the message clearly.
  • Detailed review of the depth and content of the financial analysis of the credit or investment proposal, providing a holistic analysis of the future financial performance of the company, avoiding ‘elevator’ analysis and supported by the other strategic and market forecasts presented in the credit proposal
  • Review of the risk management and proposed risk mitigation that will be integral to the credit or investment proposal.

This course provides the delegate with a comprehensive overview ofdebt structuring techniques used for both medium-term loans and well as for working capital facilities. The aim of the course is to ensure that credit risk mitigants are included in the debt structure and the loan documentation accompanying the bank’s exposure.

The second part of the course deals with credit enhancement, which can be used to obtain better terms for an outstanding debt facility either from the borrower or the lender. Through credit enhancement, the lender is provided reassurance that the corporate borrower will honour its obligation through additional collateral, insurance or a third-party guarantee, while the borrower might use credit enhancement techniques to reduce its overall costs of financing the debt.

Credit enhancement reduces the default risk of a debt facility, thereby increasing the overall credit rating and lowering interest rates.

  • The importance of risk mitigation through the loan structure
  • Devising the risk table, assessing and mitigating principle risks
  • Mirroring the risk mitigants in the loan document;
  • Analysis of the different types of credit structure, repayment scenarios and maturity;
  • Review of the key components of the term sheet and loan document;
  • Assessment of different conditions precedent, covenants and affirmative and negative; pledges to be included in the loan document as part of debt structuring;
  • Overview of the process of credit enhancement in terms of securitisation of debt;
  • Important factors to take into consideration when assessing credit enhancement methods;
  • How to evaluate the costs and benefits of credit enhancement;
  • Understanding when purchasing credit enhancement makes sense for the client;
  • Review of some of the principal types of credit enhancement.

JBS provides a large range of different courses in Early warning signal identification tailored to the level of seniority and also to the different industrial sectors in which its banking clients operate.

In meeting its overall objectives, an EWS workshop will address specific areas of risk identification in order to identify potential problems with corporate clients before they materialise and translate into a potential default scenario.

During these programmes, the class reviewsa wide range of holistic Early Warning Signals that can arise and look for red flags that can indicate potential problems. The initial part of the course will cover ‘red flags’ that can arise from the financial ratios, before moving on to leading EWS. A central theme of these programmeslies in assessing and identifying defects and mistakes being made by client companies before they are translated into symptoms of decline, as expressed by the lagging EWS of the financial statements. Macro, external, strategic and management risk analyses including management behavioural patterns will therefore play a central component of this analysis of leading rather than lagging EWS.

Having identified EWS the course and its work-shops will focus on remedies for problem loans that the banking team can seek to implement in order to avoid a further deterioration in the client company’s position and to avoid an eventual default. This programme can act as an introduction to the debt restructuring and problem loan workout courses that we also can tailor for our client companies.

  • Understanding the core areas that bankers need to analyse in identifying Early Warning Signals in assessing and monitoring the credit risks of a corporate client;
  • Identifying reasons why businesses typically face problems and mitigating potential risks through credit structuring;
  • Using the company accounts and financial statements as a means for assessing financial EWS of a corporate client;
  • Quantitative analysis of the corporate company through the use of company accounts;
  • Understanding why the defects and mistakes that companies make can be effective leading EWS;
  • Reviewing models that can assist the banker in identifying major external risks that can impact the client company
  • Qualitative analysis of a corporate client as part of the credit analysis process;
  • Management risk and identifying management behavioural patterns as effective leading EWS;
  • EWS that can arisein family run private corporate clients;
  • An analysis of potential solutions to issues arising from problem loan clients;
  • International solutions to managing problem loans;
  • Review of financial covenants and other key commercial issues to be included in the loan documentation for a corporate client that can act as EWS and risk mitigants.

These three to five dayproblem loan tailored workshopsfocuse on different remedies that can be effectively applied in trying to maximise the recovery of the bank’s Non Performing Loans. The aim of these programmes is to review, understand and apply methods of loan workout that can be achieved through the continued cash flow generation of the client as a going concern, rather than via the routes of corporate recovery or liquidation.

A central focus of these programmes is to provide the delegate with the understanding and professional tool kit in handling problem business loans at their root, and therefore avoiding the temptation of simply consenting to borrower proposals for “Extend and Pretend” financial restructuring. The programme introduces a disciplined approach to analysis and decision-making for the resolution of problem loans in a high-pressure environment. Tailored courses will also take into consideration cultural sensitivities that need to be observed in developing work out programmes for clients, across different jurisdictions.

At all times we will assess the best, practical route to NPL recovery and as a consequence, these programmes will also introduce delegates to effective business turnaround for distressed companies.

These problem loan resolution programmesare designed for relationship managers and banking executives working in corporate credit lending as well as banking executives in a bank’s corporate recovery departments.

  • Identifying the best potential recovery routes for problem loans given a range of diverse and challenging circumstances;
  • Using cash flow forecasting to understand whether the client recovery business plan can feasibly honour its debt service;
  • Understanding the need for pragmatic decision making and rapid reaction to problem loans with the view to avoiding “Extend and Pretend” restructurings;
  • Understanding key legal mechanisms across a wide range of jurisdictions available to the lender in seeking an orderly recovery of NPLs;
  • Being able to state what is meant by a “Standstill” and list the key items that are commonly found within Standstill Agreements;
  • Appreciating and understanding the central role of the Independent Business Review in understanding which recovery route to take and know how to structure a Terms of Reference for the appointment of an IBR consultant;
  • Understanding and applying practical steps and advice in undertaking a detailed restructuring, particularly in dealing with the client;
  • Being aware of the urgent need to take tight control of cash, including the development of detailed forecasts;
  • Being aware of the components of a successful turnaround plan;
  • Identifying “Exit Points” and to develop the financial restructuring around these;
  • Being aware of the need for constant monitoring and control;
  • Being able to identify how the business can exit from “crisis mode” and when this takes place;
  • Understanding the impact of financial distress upon the bank’s risk adjusted return and be able to explain how this can be improved;
  • Understanding how ‘Debt for Equity’swaps and ‘Debt For Asset’swaps can form part of the solution in problem loan cases.

During this course you will explore the various risk exposures that may directly affect your organization. You will gain a clear understanding of up to the minute theories and systems for risk management and develop your own set of tools and techniques for combating risk within your own organization. This is an innovative course that has been specifically designed to highlight the importance of accurate risk assessment and risk mitigation.

During this course you will explore the various risk exposures that may directly affect your organisation and understand how you can mitigate those risks. You will gain a clear understanding of the latest theories and systems of risk management that are considered international best practise. You will develop your own set of tools and techniques for combating risk within your organisation which you will be able to implement directly in your working life as soon as you return to your desk. This is an innovative course that has been specifically designed to highlight the importance of accurate risk assessment and risk mitigation in the context of modern business practices.


In attending this course, the delegate will:

  • Understand the importance of risk management and mitigation as well as in using risk analysis as a key business driver;
  • Apply an internationally used risk management framework and a risk register to practical case studies in mitigating risk;
  • Develop an integrated strategy for the identification, analysis, prioritization, quantification and mitigation of different types of risk including operating risk, market risk, strategic risk and management risk;
  • Review the principles of Corporate Governance internationally and their role in compliance and management risk mitigation;
  • Assess, quantify and mitigate different types of financial risk including foreign exchange risk, interest rate risk and market risk using hedging through financial instruments;
  • Understand the impact and the methods available to mitigate major strategic, operating and external business risks in a changing global environment;
  • Understand the importance of internal control, the role of internal audit and the use of internal reporting for corporate risk management and control;
  • Review and apply Risk Based Decision Making (RBDM) to the management process.