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Certified Credit Management (CCM) 2018)

Accredited By:

Certified

Credit

Management

2018Website: www.kibs.edu.kw

BS E-learning website: link through IBS website

Email: [email protected]

[email protected]

Tel: 22901102

mailto:[email protected]

Certified Credit Management (CCM) 2018

Contents

Program Overview

Eligibility for Admission

Program Administration

Program Schedule

Individual Module Outline

Credit Committee Presentation

E-learning


Program Overview


Program Overview

Purpose

To develop the credit department staff in the banking sector, through offering a series of

training modules, under the title “Certified Credit Management”, These modules seek to

develop staff who are new to a credit department with no previous credit analysis

experience, into competent credit staff.

Objectives

To familiarize the participants with the fundamental concepts of accounting, the

recording of financial information, preparation of trial balance and final accounts, and

the effects of accounting policies and methods of financial information provided.

To understand the structure of financial statements, the concepts, tools and techniques

of financial analysis of business firms.

To prepare participants for presenting Credit Appraisals in a Credit Committee

environment.

To develop an understanding of the various types of bank credits and their

characteristics.

To develop an ability of using the concepts, tools and techniques of appraising and

monitoring credit proposals.

To develop a thorough understanding of cash flows, funds flow and proforma

statements used in business.

To enhance the ability of the participant to assess the validity of cash flow projections

and proforma statements often submitted by clients.

To develop the ability to use the concepts, models, tools and techniques of non-

financial aspects of credit analysis.

To assist participants to prepare accurate, informative, well-structured and concise

reports on all aspects of credit.

To practice the ‘art’ of lending and making sound business decisions.

To assist participants in the administration of their customer portfolio.


To appreciate the dynamic interplay of trading relationships, payments, financial

methods and terms of sale.

To comprehend the techniques of covering the risks of foreign exchange exposure.

To understand the importance of the documents those form the legal and commercial

foundation for international business.

To analyze the mechanics of self-liquidating acceptance finance.

To appreciate those legal issues, this will impact on day to day dealings with

customers.

To appreciate the fundamental concepts of the Money Markets and related Treasury

Products.

To provide an insight of best practices in selling bank services to existing and

potential customers.



Education

University Graduates (minimum requirement).

Working Experience

New recruits who are expected to work in the Credit area of a bank or Credit Department

staff with maximum of one year experience.

Language

Fluency in both, Arabic and English, written and oral communication.

Nominations

The Bank should recommend the candidates for the CCM.


Program Administration


Quantitative Test

All Accepted applicants will have to undertake a short Quantitative Test before starting

the Program, it will be scheduled on November 20th

, 2016.

Duration and timing

♣ the program duration is for 6 months.

♣ The Program will be conducted at the Institute of Banking Studies. The Modules will

be held from 8:00 am to 3.00 pm, Sunday through Thursday. Evening modules from 5:00

pm- 8:15 pm and/or Saturdays in Specific modules will be scheduled whenever

necessary. Please refer to the schedule attached (any further changes will be announced).

Program Booklet

A detailed program Booklet, incorporating all the Program outlines, Administration

details, etc. will be provided to all the participants at the commencement of the program.

Language

All the modules will be conducted in English except “Legal Aspects of Lending” which

will be conducted in Arabic

General

Final Decisions making in all matters related to the Program will lie with the Institute of

Banking Studies.

Graduation Requirements

To qualify for the program certificate, participants have to meet the following:

1. Exams

Each Module will be subject to examinations (Including Credit Committee

Presentation)

2. Progress – Modules

The following conditions will apply:


•Progress to each new level is dependent upon passing the exam by achieving a

minimum score of 70% in each module (Including Credit Committee

Presentation), and meeting all other Criteria.

•In Certain areas: performance will be assessed by reviewing Exam results over

more than Module; where a minimum average of 70% as an overall average grade

should be achieved in the following group of Modules:

a. Legal Aspects of Lending

b. Credit Aspects of International Trade Finance

c. Credit Aspects in the Treasury function

d. Working with Customers

•E-learning courses must be completed on time.

3. Attendance

Attendance at every session of the in-class training courses is required

4. Punctuality

Time is essential

•At its discretion, the IBS may allow absence, ONLY for reason beyond the

control of participants, with a maximum of 3 non-consecutive days in the whole

program.

•3 late arrivals will be classed as one day absent or, 3 absences during the entire

program, the participant will be required to leave the program.

All the above are at all discretion of the IBS.

5. Reports

Punctuality, participation, quality of input, initiative and teamwork will, where

appropriate, be reported


Program Schedule


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Start

Date

Nov

5 - 6

Nov

12-26

Dec

3-17

Jan

7- 17

Jan

21 -24

Jan 28-

Feb 11

Feb

13-15

Mar

4-6

Mar

11-14

Mar

18-21

Mar

25-28

Apr

1-4

Apr

24-25

Total

Hours

12

60

60

48

24

60

18

18

24

12

24

24

384

Exam

Nov 7

MID: Nov 19

FINAL:

Nov 27

MID:

Dec 10

FINAL:

Dec 18

MID:

Jan 11

FINAL:

Jan 18

Jan 25

MID:

Feb 4

FINAL:

Feb 12

Feb 18

Mar 7

Mar

15

Mar

22

Mar

29

Apr

5


Program Outlines


CCM 2018 - MODULE 1 - PRESENTATION SKILLS

OBJECTIVE:

To prepare participants for presenting Credit Appraisals in a Credit Committee

environment

CONTENTS:

Presentational communication concepts

Effective communication

Organizing a presentation

Use of presentation aids

Delivering the presentation

Matching the presentation to the Credit Appraisal

Handling questions

Obtaining a decision

Writing Credit Proposal

Writing Call Reports

Managing a meeting with a prospective clients

DURATION:

12 training hours


CCM 2018 - MODULE 2 - FINANCIAL ACCOUNTING

OBJECTIVE:

To familiarize the participants with the fundamental concepts of accounting, the recording

of financial information, preparation of trial balance and final accounts, and the effects of

accounting policies and methods of financial information provided

CONTENTS:

An introduction to financial statements

The accounting equation

The income statement

The ledger account

The rules of debit and credit

The general ledger

The journal and journal entries

Measuring net income

Revenue and expense items

The accounting cycle

Analysis and recording of transactions

Posting to general ledger

Trial balance

Adjusting entries

Work sheets

Recording of adjusting journal entries

Gross profit

Accounting for sales

Accounting for purchases

Classified financial statements

Internal control

Accounting for cash

Bank reconciliation

Accounting for fixed assets

Depreciation accounting

Inventory valuation methods

Accounting for receivables

Accounting for Long-term borrowings

Accounting for owner’s equity

Accounting for investments

DURATION:

60 training hours


CCM 2018 - MODULE 3 - FINANCIAL ANALYSIS

OBJECTIVE:

To understand the structure of financial statements, the concepts, tools and techniques of

financial analysis of business firms

CONTENTS:

Structure of financial statements

Income statement, balance sheet, and funds flow statement

Tools and techniques of financial analysis

Ratio analysis, ROI framework, funds flow concept, break even concept, trend

analysis, comparative analysis, sensitivity analysis, operating cycle and working

capital analysis, time value of money, and capital budgeting techniques

Financial analysis using case studies

Presenting the results – Reports and Presentations

Practical applications of financial analysis and ratios

Spread sheet - MS Excel workshop

Introduction to modeling

Business and Financial Risk in various business sectors, e.g.

Investment

Real Estate

Retail

Manufacturing

Business and Financial Risk in various categories of business, e.g.

SME

Mid Cap

Corporates

Geographical – International business

DURATION

60 training hours


CCM 2018 - MODULE 4 - CASH FLOW ANALYSIS

OBJECTIVES:

To develop a thorough understanding of cash flows, funds flow and proforma statements

used in business

To enhance the ability of the participant to assess the validity of cash flow projections

and proforma statements often submitted by clients

CONTENTS:

Review of the concepts of cash and accrual accounting

Review the essential cost concepts to understand cash flow and operating budgets

Review of the basic concepts of cash flow, funds flow and working capital

Cash cycle for trading

Cash cycle for manufacturing

Cash cycle for new projects

Concept and uses of profit-cost volume analysis

Forecasting methods of sales and expenses

Preparation of cash budgets

Net Present Values

Discounted Cash Flow

Proforma financial statements:

Income and expense statement

Balance sheet

Funds flow statement

Evaluation of proforma statements from the lender’s point of view

Validity of assumptions and use of sensitivity analysis on key variables

Assessment of the future earning power and the ability to service debt

Structuring the support - Cash and non- cash lines of finance

Presentation of Findings - Reports and Presentations

Practical Applications

DURATION:

48 training hours


CCM 2018- MODULE 5 - NON FINANCIAL ANALYSIS

IN CREDIT RISK ASSESSMENT

OBJECTIVES:

To develop the ability to use the concepts, models, tools and techniques of non-financial

aspects of credit analysis

To develop an understanding of the various types of bank credits and their

characteristics

To develop an ability of using the concepts, tools and techniques of appraising and

monitoring credit proposals

CONTENTS:

Models used in Non-Financial Analysis:

General principles

CAMPARI

The C’s of credit

SWOT…etc.

Evaluation of the company’s management

Ansoff

Industry and competitive position analysis

Porter

Boston Consulting Group

Market Matrix…etc.

The Market place

PESTER…etc.

Canons of lending

Personal lending

Business lending

Legal consideration

Rights and obligations

Cash and Non – cash lines of finance

Practical considerations

Security for advances

Types

Protecting

Releasing

Marketing of Lending Products

DURATION

24 training hours


CCM 2018 - MODULE 6 - THE PRACTICALITIES OF

CREDIT ANALYSIS

OBJECTIVES:

To assist participants to prepare accurate, informative, well-structured and concise reports

on all aspects of credit

To practice the ‘art’ of lending and making sound business decisions

To assist participants in the administration of their customer portfolio

CONTENTS:

Credit Analysis

Financial statements and ratio analysis - recap

Cash flow analysis and repayment ability – recap

Operating cycle and working capital financing

Non-Financial Analysis - recap

Loan risk analysis and loan classification

Loan pricing

Loan types and purpose - an overview

Loan structuring, covenants, documentation and legal aspects

Structuring of Facilities, cash and non- cash - recap

Security / Collaterals - recap

Legal considerations

Regulatory issues

Marketing of Credit Products

Presenting Reports – Written and Oral

Credit Reports

Characteristics of report writing

Structure of the report

Use of graphs, figures, charts, etc. within reports

Getting the message across

Persuasive conclusions

Presenting Reports to a Credit Committee

Credit Administration

Scheduling of interviews/meetings with customers

Maximizing potential for building relationships and sales through effective and efficient

management of the customer portfolio and prospective customer contact process

Legal considerations

Regulatory issues

Monitoring and the control of lending

Problem Loans

Early Warning Signs

Follow up

Money Laundering

How credit facilities may be used

How an assessment of lending risk complements an understanding of Banking Risk

Credit

Liquidity

Market and

Operation

Basel II and Basel III

Stress Testing


Alternative Sources of Finance

Capital markets

Crowd sourcing or crowd funding

DURATION

60 training hours


CCM 2018 - MODULE 7 – PROBLEM LOANS

OBJECTIVES:

Identify the early warning signals for Loans/credit facilities

Understand the different stages of loan workout processes

How to ensure the appropriate Risk-reward

CONTENTS:

Warning Signals

Orange flags

Red flags

Overview of loan workouts and restructuring

Lessons from experience

Introduction to the loan workout process

Initial analysis; use of liquidation models to assess each stakeholders’ economic

interest

Restructuring the balance sheet of a highly leveraged company

Companies in distress:

What were the early warning signals? How could the lender have acted upon these

in the absence of covenant breaches?

What were the causes of the problem? Are there any creative accounting issues?

How can the issues be addressed?

Who has the economic interest?

Should the lender give time? Take new collateral, adjust pricing terms etc...

Who are the other key stakeholders and what will be their negotiating position?

What liabilities crystallize on a gone concern basis?

Assessing viability

How to structure the pricing (including kickers) to ensure the right return?

The negotiating positions of stakeholders

Ensuring the appropriate risk-reward

Including the use of: – Increased interest rates

Part cash pay interest/ part PIK

Restructuring fees

Success fees and how to tie this to company’s ability to pay

Warrants

Convertible term loans

Debt-equity swaps

Basel II & Basel III considerations

IFRS 9 (IAS39)

Multi-creditor workouts

Valuing the distressed company’s assets

DURATION:

18 training hours


CCM 2018 - MODULE 8 – ISLAMIC BANKING

SERVICES

OBJECTIVE:

To assist participants understand the different tools applied by Islamic Banks to

finance corporate needs, and will be able to clearly differentiate between Islamic

products compared to conventional products.

CONTENTS:

Introduction to Islamic Banking

Why Islamic Banking?

Understanding of Share ’a rules of commercial law

Theory of contracts – Nominated contracts

Key differences to conventional finance

Introduction to Islamic Bank–Liability Structure

Key concepts of depositing.

Deposit and Savings accounts.

o Mudaraba Deposits

o Wakala Deposits

How are these instruments different from conventional deposits?

o Guarantee pre-determined return…

Islamic current accounts:

o Qard.

o Wadia

How are these instruments different from conventional deposits

Islamic Bank Asset Structures

Asset portfolio of Islamic banks:

o Financing products

o Investment Instruments

Managing the mismatching maturity gap between assets and liabilities in Islamic

Banks

Overview of Islamic Finance

Key concepts of Islamic Finance- Ethical approach, added value, balance etc.

Sale based modes of finance:

o Murabaha: goods, commodity

o Salam.

o Istisn’a.

Lease based modes of finance:

o Ijara: Operating lease.

o Ijara Muntahiya Bi Tamleek: Lease to own

o Ijara Mawsofa: Forward lease.

Equity based modes of finance:

o Mudaraba.

o Musharaka.


o Wakala.

How are these instruments different from conventional finance?

o Fixed or floating rate, Collateral, early settlement, late payment, Default

and Restructuring?

What are kind of risks associated with Islamic financial products?

Overview of Islamic Banking services:

Trade Finance - Contingent liabilities.

o Letter of Credit- LC Murabaha

o Letter of Guarantee –Shipping Guarantee

How are these instruments different from conventional finance?

How Islamic banks make profit?

DURATION:

18 training hours


CCM 2018 - MODULE 9 – CREDIT ASPECTS OF

INTERNATIONAL TRADE FINANCE

OBJECTIVES:

To appreciate the dynamic interplay of trading relationships, payments, financial methods

and terms of sale

To comprehend the techniques of covering the risks of foreign exchange exposure

To understand the importance of the documents that form the legal and commercial

foundation for international business

To analyze the mechanics of self-liquidating acceptance finance

CONTENTS:

Banks – their role in International Finance-Controls

Bank relationships – customer and bank credit risks

Foreign exchange – the markets and uses of foreign currencies in spot, forward and pure

currency areas of trading

Methods of settlement including SWIFT

NOSTRO/VOSTRO Accounts

Documents used in international trade-their use and purpose

Documentary collections – as a means of settlement or finance

Letters of Credit and guarantees in outline-export agencies

Sundry financing arrangement

Money Laundering and Fraud Risks

DURATION:

24 training hours


CCM 2018 - MODULE 10 - LEGAL ASPECTS OF

LENDING

OBJECTIVE:

To appreciate those legal issues which will impact on day to day dealings with customers

CONTENTS:

Banker-customer relationship

Confidentiality

Credit collaterals

Letters of Guarantee

Commercial companies and Mutual Funds

Legal documentation required/used in the Credit Department

DURATION:

12 training hours, evening


CCM 2018 - MODULE 11 – CREDIT ASPECTS IN

TREASURY FUNCTIONS

OBJECTIVE:

To appreciate the fundamental concepts of the Money Markets and related Treasury

Products

CONTENTS:

Macroeconomic overview

The Money Market

Wholesale

Retail

Participants

Treasury Operations

Interest Rates

Foreign Exchange

Stock Market

Derivatives

Forwards and Futures

Options

Swaps

Hedging

Leverage

Secondary Markets

Bourse Game/Simulation

DURATION:

24 training hours


CCM 2018 - MODULE 12 – WORKING WITH

CUSTOMERS

OBJECTIVE:

To provide an insight of best practices in selling bank services to existing and potential

customers

CONTENTS:

Relationship banking as a marketing strategy

Knowing your bank’s products and services

Prospecting-particularly credit products

Identifying the customer’s needs

Planning the sale

Building the relationship

Influencing the customer’s decision making

Dealing with customer queries

Handling objections

Negotiating

Making the sale

Follow up and success indicators

Cross selling techniques

Telephone selling skills

Prioritization

Customer service

Customer Relationship Building

DURATION:

24 training hours



CCM-2018 - Certified Committee Presentation

At the end of the Certified Credit Management Program, in June, case studies based

on Kuwait Stock Exchange listed companies are required to be prepared.

A thorough Credit Analysis of the cases, based on the information made available

without reference to the business or information within their banks, is undertaken.

A ‘Credit Report’ is submitted to the IBS and is individually presented to a (mock up)

Credit Committee made up of the Banks’ Credit Administration and Management

Training Committee Members.

During the presentation the trainee is questioned as she/he would be in real life. The

Committee Members note their comments on each Report/Presentation.

NOTE: Credit Committee presentation will be graded and requires Pass

Mark 70%


E-Learning Courses


CCM-2018 - E-learning Courses

The e-learning courses will be assigned during the Certification Program and should be

completed prior to the end of the Program

To Be Advised Later