Units

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Sample subject outline - Semester 1 2013

Note: Subject outlines often change before the semester begins. Below is a sample outline.

Rationale

Financial institution (FI) lending is one of the foundations of the international financial system. The unit will provide you with relevant knowledge and understanding to the level required to select, plan, execute and manage a loan as lender (FI officer), borrower (corporate treasurer), or legal/financial adviser. This training will enable you to oversee lending activity as an FI manager or regulator; or undertake further academic work in the field.

The key aims of this unit are to introduce you to:
1. frameworks for credit risk analysis,
2. risk assessment for different categories of loans,
3. mechanisms for predicting financial distress and credit rating,
4. principles of risk management in banks,
5. bank profitability analysis,
6. international banking perspectives, and
7. measuring bank productivity

Aims

The unit will provide you with (i) a comprehensive description of current instruments and practices in financial institutions as lenders and the international loan markets in which they compete, and (ii) a detailed exploration of the major structural and historical factors that are reflected in them. More generally, the unit will deepen your understanding of firm capital structure and capital markets.

Objectives

Course Learning Goals (Undergraduate)
The QUT Business School has established the Assurance of Learning (AOL) Goals to meet contemporary industry needs and standards. Achieving these learning outcomes will assist you to meet the desired graduate outcomes set at QUT - aligned with other internationally renowned business schools. Students will develop the following capabilities relevant to a contemporary global and sustainable business environment:

Have knowledge and skills pertinent to a particular discipline (KS)
1.1 Integrate and apply disciplinary theory and skills to practical situations
1.2 Incorporate the use of technology appropriate to the discipline and context

Be critical thinkers and effective problem solvers (CTA)
2.1 Identify, research and critically analyse information relevant to a business problem or issue, be able to synthesise that information in order to evaluate potential solutions, make recommendations or otherwise effectively address the problem or issue

Be professional communicators in an intercultural context (PC)
3.1 Communicate effectively through written tasks appropriate to varied contexts and audiences
3.2 Communicate effectively through professional oral presentations appropriate to varied contexts and audiences

Be able to work effectively in a Team Environment (TW)
4.1 Demonstrate effective team skills in order to contribute appropriately to the production of a group output

Have a Social and Ethical Understanding (SEU)
5.1 Apply ethical reasoning, standards or codes of practice relevant to the discipline and make decisions that are informed by social and cultural understanding

Unit Objectives
Upon completion of this unit, students should:

1. Understand the structure of the international standard loan agreement and the way this reflects the nature of its FI providers and the market in which it is offered; and
2. Be able to describe the structure and operation of the international loan markets, their history, regulation and competitive environment; and
3. Be able to identify the different purposes for which FI loans are applied, variations in the standard structure to reflect these, and distinguish them from alternate forms of financing; and
4. Be capable of planning, originating and executing a corporate bank loan facility in the hypothetical role of bank loan officer.

The specific course learning goals and unit objectives that apply to this unit are shown in the assessment section of this unit outline.

After successfully completing this course you should be able to:

1. Apply a decision-making framework to credit analysis and forecast financials;
2. Assess the risk in lending to consumers;
3. Assess the risk in lending for real estate;
4. Assess the risk in lending for large projects;
5. Interpret debt ratings, understand the rating process and apply discriminant analysis;
6. Recognise indicators of financial distress and predict financial distress;
7. Understand the principles of asset-liability management in banks;
8. Understand securitisation and its role in risk management;
9. Understand the role of funds transfer pricing in bank profitability analysis;
10. Understand the key concepts behind Islamic banking practices
11. Design a model of relative bank efficiency and interpret test results;
12. Contribute positively to discussions in group settings;
13. Evaluate case studies that are either complex or provide limited data/information

Content

This unit will cover the following general topics:

1. Financial institutions as lenders
2. Loan structure
3. Loan purpose
4. Costs of lending
5. Credit risk
6. Lender compensation
7. Default and loan loss
8. Loan markets

Approaches to Teaching and Learning

The unit will be taught by one two hour lecture a week. The class time will combine lecture, discussion, and problem solving (individually and in group). Class time will also be dedicated specifically to preparing students to undertake and execute the assessments.

Assessment

Students will receive feedback in various forms throughout the semester which may include:

Informal: worked examples, such as verbal feedback in class, personal consultation

Formal: in writing, such as checklists (e.g. criteria sheets), written commentary

Direct: to individual students, either in written form or in consultation

Indirect: to the whole class

Assessment name: Mid-Semester Examination
Description: Mid-semester exam. A number of short essay questions.
Relates to objectives: Objectives 1,2,3 and 4 and AoL Goals: KS (1.1), CTA (2) and PC (3.1)
Weight: 50%
Internal or external: Internal
Group or individual: Individual
Due date: Week 7

Assessment name: End of Semester Examination
Description: Take-home exam. You will be provided with two essay titles that you must research and answer. These will be given to you in Week 11, and due in Week 14 (dates to be finalised). Long answer problems.
Relates to objectives: Objectives 1, 2 and 3 and AoL Goals: KS (1.1), CTA (2).
Weight: 50%
Internal or external: Internal
Group or individual: Individual
Due date: Week 14

Academic Honesty

QUT is committed to maintaining high academic standards to protect the value of its qualifications. To assist you in assuring the academic integrity of your assessment you are encouraged to make use of the support materials and services available to help you consider and check your assessment items. Important information about the university's approach to academic integrity of assessment is on your unit Blackboard site.

A breach of academic integrity is regarded as Student Misconduct and can lead to the imposition of penalties.

Resource materials

Prescribed text:

Koch TW, MacDonald S (2010) Bank Management, 7th Edition.

Other readings:

Full details will be provided in the Week 1 document, but they will include:

1. The Loan Market Association (LMA) Form of Facility Agreement;
2. Basel II Revised international capital framework (www.bis.org/publ/bcbs128.htm);
3. Unit Workbook (Wild, QUT).

Feel free to find your own additional readings.

Risk assessment statement

There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit. You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to
view the Emergency video.

Disclaimer - Offer of some units is subject to viability, and information in these Unit Outlines is subject to change prior to commencement of semester.

Last modified: 21-Nov-2012