| Semester 2, 2020 On-campus Springfield | |
| Short Description: | Credit Analysis & Lending Mgt |
| Units : | 1 |
| Faculty or Section : | Faculty of Business, Education, Law and Arts |
| School or Department : | School of Commerce |
| Student contribution band : | Band 3 |
| ASCED code : | 081101 - Banking and Finance |
| Grading basis : | Graded |
Staffing
Examiner:
Requisites
Pre-requisite: FIN1101
Other requisites
Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at .
Rationale
Lending constitutes one of the most important functions of any financial institution. In a typical bank, around 70% of funds are invested in loans and advances. As we have seen with the global financial crisis, if the lending function is not managed properly, it can lead to serious credit quality issues that can have a destabilising effect on individual lenders and ultimately on the financial system. To manage the lending function properly, and to mitigate credit quality problems, adequately trained staff are required. The goal of this course is to equip students with requisite skills toward this end.
Synopsis
Business firms extend credit, banks extend loans. The focus of this course is credit analysis and lending. It provides an overview of lending principles, covers analytical aspects such as the financial analysis of a firm to determine credit worthiness, provides an overview of policy and legal issues, and looks at special types of credits like consumer loans, real estate loans, corporate loans and international loans. It also covers related topics such as securitisation, portfolio management and problem loan management.
Objectives
On successful completion of this course, students should be able to:
- synthesise credit assessment and lending knowledge, concepts, regulations, theories, principles and processes relevant to bank loans officers across a range of banking activities and loan types;
- think critically, constructively and logically about lending issues, ethical issues, theories and problems arising from asymmetric information and strategies that banks use to lessen the negative impacts of such problems;
- apply the tools of credit analysis and lending management to solve problems faced by banks in assessing loans and managing loan portfolios;
- confidently and coherently communicate insights gleaned through financial statement analysis and credit assessment of borrowers to an appropriate audience;
- demonstrate the information literacy skills required of a financial services professional through reading and interpreting financial statement information and other relevant financial metrics and discussing loan products and facilities and other banking services.
Topics
| Description | Weighting(%) | |
|---|---|---|
| 1. | The principles of lending and lending basics | 8.00 |
| 2. | Financial statements analysis | 10.00 |
| 3. | Credit scoring techniques | 8.00 |
| 4. | Credit risk 1 | 9.00 |
| 5. | Credit risk 2 | 9.00 |
| 6. | Consumer lending | 8.00 |
| 7. | Real estate lending | 8.00 |
| 8. | Security, consumer credit legislation and legal aspects of lending | 8.00 |
| 9. | Corporate lending | 8.00 |
| 10. | Small business lending | 8.00 |
| 11. | International lending | 8.00 |
| 12. | Problem loan management | 8.00 |
Text and materials required to be purchased or accessed
ALL textbooks and materials available to be purchased can be sourced from (unless otherwise stated). (https://omnia.usq.edu.au/textbooks/?year=2020&sem=02&subject1=FIN2108)
Please for alternative purchase options from USQ Bookshop. (https://omnia.usq.edu.au/info/contact/)
Koch, T & MacDonald, S 2015, Bank Management, 8th edn, Cengage Learning, Australia.
(etext available from: www.cengagebrain.com.au.)
(etext available from: www.cengagebrain.com.au.)
Sathye, M, Bartle, J & Boffey, R 2017, Credit analysis and lending management, 4th edn, Mirabel Publishing, Prahran, Victoria.
The text by Koch and MacDonald is also used in FIN3109 Managing Financial Institutions.
Reference materials
Reference materials are materials that, if accessed by students, may improve their knowledge and understanding of the material in the course and enrich their learning experience.
Hull, JC 2018, Risk management and financial institutions, 5th edn, Pearson Prentice Hall, Boston, Massachusetts.
Hunt, B & Terry, C 2018, Financial institutions and markets, 8th edn, Cengage Learning, South Melbourne, Victoria.
Martin, RD 2008, Banking and finance: in principle, Lawbook Co, Pyrmont, New South Wales.
Tyree, AL 2018, Banking law in Australia, 9th edn, LexisNexis Butterworths, Chatswood, New South Wales.
Student workload expectations
| Activity | Hours |
|---|---|
| Directed 精东传媒app | 36.00 |
| Independent 精东传媒app | 129.00 |
Assessment details
| Description | Marks out of | Wtg (%) | Due Date | Notes |
|---|---|---|---|---|
| ASSIGNMENT | 25 | 25 | 21 Aug 2020 | (see note 1) |
| QUIZZES | 15 | 15 | 23 Oct 2020 | (see note 2) |
| ONLINE EXAMINATION | 60 | 60 | End S2 | (see note 3) |
Notes
- Your assignment includes assessing the credit worthiness of a business by applying financial techniques including ratio analysis and summarising your results.
- Three online quizzes will be conducted during the semester. Further details will be provided on the course 精东传媒app Desk.
- This will be an online exam. Students will be provided further instruction regarding the exam by their examiner via 精东传媒appDesk.
Important assessment information
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Attendance requirements:
Online: There are no attendance requirements for this course. However, it is the students' responsibility to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.
On-campus: It is the students' responsibility to attend and participate appropriately in all activities (such as lectures, tutorials, laboratories and practical work) scheduled for them, and to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration. -
Requirements for students to complete each assessment item satisfactorily:
Due to COVID-19 the requirements for S2 2020 are: To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks for that item.
Requirements after S2, 2020:
To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.) -
Penalties for late submission of required work:
Students should refer to the Assessment Procedure (point 4.2.4) -
Requirements for student to be awarded a passing grade in the course:
Due to COVID-19 the requirements for S2 2020 are: To be assured of receiving a passing grade a student must achieve at least 50% of the total weighted marks available for the course.
Requirements after S2, 2020:
To be assured of receiving a passing grade a student must obtain at least 50% of the total weighted marks available for the course (i.e. the Primary Hurdle), and have satisfied the Secondary Hurdle (Supervised), i.e. the end of semester examination by achieving at least 40% of the weighted marks available for that assessment item.
Supplementary assessment may be offered where a student has undertaken all of the required summative assessment items and has passed the Primary Hurdle but failed to satisfy the Secondary Hurdle (Supervised), or has satisfied the Secondary Hurdle (Supervised) but failed to achieve a passing Final Grade by 5% or less of the total weighted Marks.
To be awarded a passing grade for a supplementary assessment item (if applicable), a student must achieve at least 50% of the available marks for the supplementary assessment item as per the Assessment Procedure (point 4.4.2). -
Method used to combine assessment results to attain final grade:
The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course. -
Examination information:
Due to COVID-19 the requirements for S2 2020 are: An Open Examination is one in which candidates may have access to any printed or written material and a calculator during the examination.
Requirements after S2, 2020:
This is a restricted examination. Candidates are allowed access to specific materials during the examination. The only materials that candidates may use in the examination for this course are:- writing materials (non-electronic and free from material which could give the student an unfair advantage in the examination)
- calculators which cannot hold textual information (students must indicate on their examination paper the make and model of any calculator(s) they use during the examination).
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Examination period when Deferred/Supplementary examinations will be held:
Due to COVID-19 the requirements for S2 2020 are: The details regarding deferred/supplementary examinations will be communicated at a later date.
Requirements after S2, 2020:
Any Deferred or Supplementary examinations for this course will be held during the next examination period. -
精东传媒app Student Policies:
Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene 精东传媒app policies and practices. These policies can be found at .
Assessment notes
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Referencing in assignments:
Harvard (AGPS) is the referencing system required in this course. Students should use Harvard (AGPS) style in their assignments to format details of the information sources they have cited in their work. The Harvard (AGPS) style to be used is defined by the USQ Library's referencing guide at .