COURSE INFORMATION Course Title: LOAN MANAGEMENT AND CREDIT ANALYSIS

Code	Course Type	Regular Semester	Theory	Practice	Lab	Credits	ECTS
BAF 322	B	6	3	0	0	3	6

Academic staff member responsible for the design of the course syllabus (name, surname, academic title/scientific degree, email address and signature)	NA
Main Course Lecturer (name, surname, academic title/scientific degree, email address and signature) and Office Hours:	Dr. Chrysanthi Balomenou cbalomenou@epoka.edu.al , Wednesday 11:00-12:00
Second Course Lecturer(s) (name, surname, academic title/scientific degree, email address and signature) and Office Hours:	NA
Teaching Assistant(s) and Office Hours:	NA
Language:	English
Compulsory/Elective:	Compulsory
Study program: (the study for which this course is offered)	Bachelor in Banking and Finance (3 years)
Classroom and Meeting Time:	E/212 13:45-16:30
Code of Ethics:	Code of Ethics of EPOKA University Regulation of EPOKA University "On Student Discipline"
Attendance Requirement:	A minimum rate of 60% is required for the student to enter the final examination.
Course Description:	BAF 322- Loan Management and Credit Analysis: The aim of this course is to establish the conceptual foundations of corporate bank lending and to apply its principles to corporate lending decisions in financial institutions. The loan portfolio is generally the major asset category on a commercial bank’s balance sheet. The establishment and management of this asset require the understanding and application of appropriate techniques to achieve good loan quality, control, monitoring and management of risk factors to achieve loan repayment. This course prepares you in making sound lending decisions in your career to help your financial institutions achieve its corporate objectives as well as providing you with an insight into the credit analytical decision making process and the internal psyche of a corporate bank lender.
Course Objectives:	Identify the basic principles governing bank lending and explain their importance.Explain the importance of analysis of financial statements in lending decisions. Describe the various methods of analysis where project finance is involved.Explain the practical use for a credit scorecard. Explain the growth in consumer credit. Define credit risk. Analyse various approaches to credit risk analysis. Explain expert systems.Outline the major types of consumer loans. Explain how different types of consumer loan applications are evaluated. Explain the pricing aspect of consumer loans. Apply the principles of corporate lending. Explain the application of lending criteria. Explain the theory underlying small business finance, using the concepts of asymmetric information, credit rationing, adverse selection and moral hazard. Understand the issues of credit risk from the perspective of the regulators. Relate capital adequacy to credit risk considerations. Express the issues of large exposures. Explain why the business cycle is important for problematic loans. Define problematic loans, provisions and regulatory issues. Discuss the capital issues of problematic loans.

BASIC CONCEPTS OF THE COURSE

1	Lending, Principles of lending
2	Lending basics
3	Financial statements analysis
4	Basel Capital Accords (Basel I, II, III)
5	Liquidity
6	Small Business Lending
7	Problematic Loans and their effective management
8	Capital Adequacy
9	Credit Risk Analysis

COURSE OUTLINE

Week	Topics
1	Introduction of the syllabus, academic writing rules (a refreshment of the already taught in the first-year key elements of the academic writing well-adjusted to the needs of the comparative banking course) and discussion on the indicative project topics. More specifically we are going to analyze the key parts of the syllabus and afterwards we will be based on the way that we are going to proceed with the elaboration of the team working projects. In order the students to be facilitated more, during this introductory lecture it will be presented some indicative topics or in a broader way reliable scientific areas of the examining field, which could be chosen purely by the students or they can be based on them in order to form their own topic.
2	The Principles of Lending – In this chapter we are presenting and explaining the following: The principles of good lending, the methods of Credit analysis (Traditional and Modern methods) (pg. 3-19).
3	Lending Basics – Here we are figuring out: the factors affecting lending procedures, the lending process, types of advance (traditional and modern), type and ownership pf accounts (customer and business) (pg. 19-40).
4	Financial Statement Analysis (1st part) – The objectives of this chapter are to: explain the key financial statements, the importance of the analysis of each of them, describing various methods of analysis where project finance is involved and highlighting the special techniques accordingly (pg. 45-71).
5	Financial Statement Analysis (2nd part) – In this lecture we are going to analyze the different techniques of analysis where project finance is involved such as: payback period, NPV and the Accounting Rate of Return. Break-even analysis will also be explained, including step-by-step approach to financial statement analysis (pg.71-90).
6	Revision. We are recapping all the already taught subjects, by pinpointing the highlights of them concentrating on those that are needing, due to their nature, more attention in terms of critical analysis and combination of different reliable topics.
7	Midterm Exam
8	Presentation of group projects. The students divided into groups composed of 3-5 members are presenting, using power point system, their teamworking projects, that have been previously submitted to their professor. Each team member is presenting his/hers's own contribution part of the project presentation.
9	The different phases of the Basel Capital framework – In this chapter the three Basel Capital Accords will be examined thoroughly by pinpointing the key elements of their structure. We are going to crystallize furthermore especially during and after the period of the global financial crisis, the main weaknesses and reliable novelties of Basel Capital Accord II (Bis.org. 2022. The Basel Committee - overview. Available at: https://www.bis.org/bcbs/).
10	Liquidity (1st part) – In this chapter we are going to focus on the huge importance of domain of liquidity. More specifically, we are going to be concentrated on liquidity limits and liquidity risk management (Bis.org. 2022. The Basel Committee - overview. Available at: https://www.bis.org/bcbs/).
11	Liquidity (2nd part) – In this part the following will be presented: scenarios, methodologies, utilization. In addition, we are going to interfere into Macroprudential supervision scientific area, focusing on its main dimensions and objectives. Moreover, we are going to analyze the main characteristics of the systemic risk and procyclicality problem. Finally, a huge importance is going to be paid to the novelties of Basel Capital Accord III as a response to the previously taught chapter of the Basel Capital Accords II weak domains (Bis.org. 2022. The Basel Committee - overview. Available at: https://www.bis.org/bcbs/).
12	Small Business Lending – In this lecture our main objectives are about: defining small business, explaining the theory underlying small business finance, using the concepts of asymmetric information, credit rationing, adverse selection and moral hazard, describing the distinctive risk of lending to small business and outlining the main characteristics of a relationship managed approach to small business lending (pg. 288-330).
13	Revision. We are summing up all the already taught subjects, by pinpointing the highlights of them concentrating on those that are needing, due to their nature, more attention in terms of critical analysis and combination of different reliable topics.
14	Final Exam

Prerequisite(s):	NA
Textbook(s):	-Credit analysis and lending management, 3rd edition, Milind Sathye, James Bartle, Raymond Boffey-International Economics: Theory and Policy, 11th Edition, Paul R. Krugman,Maurice Obstfeld, Marc J. Melitz, 2018-Finance, Banking and Money, V.2.0, 2012
Additional Literature:	-Principles of banking law, 3rd edition, Ross Cranston, Emilios Avgouleas, Kristin van Zwieten, Christopher Hare, Theodor van Sante. -Credit Analysis, Walter S. Foster, 2017 and -Teaching Notes and Power Points, prepared by the Lecturer of the Course Dr. Chrysanthi Balomenou
Laboratory Work:	NA
Computer Usage:	NA
Others:	No

COURSE LEARNING OUTCOMES

1	Distinguish different types of borrowers and the special considerations that apply to them when giving loans
2	Describe the special techniques of analysis where project finance is involved.
3	Outline the process of building a credit application scorecard.
4	Explain expert systems. Ascertain credit risk from market-based spreads.
5	Describe how different types of consumer loan applications are evaluated. Explain the pricing aspect of consumer loans.
6	List the contents of the loan structuring proposal.
7	Analyze the importance of managing the loan portfolio.
8	State the main characteristics of a relationship managed approach to small business lending.
9	Identify credit derivative issues for regulators. Describe the credit rating process
10	Define problematic loans, provisions and regulatory issues. Discuss the capital issues of problematic loans.

COURSE CONTRIBUTION TO... PROGRAM COMPETENCIES (Blank : no contribution, 1: least contribution ... 5: highest contribution)

No	Program Competencies	Cont.
Bachelor in Banking and Finance (3 years) Program
1	The students gain the ability to look at the problems of daily life from a broader perspective with an increased awareness of the importance of moral/ethical considerations and professional integrity in the workplace.	5
2	They develop their knowledge and understanding of banking and finance including concepts, theories, and analytical tools that serve both in national and international markets.	5
3	They gain an understanding of the role of financial management in business firms and the essentials of corporate finance and further develop their knowledge in the field.	4
4	They are able to apply valuation models to estimate the price of different financial assets, measure risk and describe the risk-return tradeoff.	4
5	They are provided with the knowledge and understanding of the regulatory framework and functioning of banking system and central banking as well as international banking system.	5
6	They are able to understand and use fundamental economic theories and tools to solve economic problems in banking and financial services industry.	5
7	They have the ability to develop and utilize accounting, financial and economic data as well as other information to solve different business problems by making use of basic mathematical and statistical models.	4
8	They are expected to develop their numerical and IT skills as well as knowledge of databases in order to address the significant development in the delivery and use of financial services known as FinTech.	4
9	They develop their ability to think critically, do research, analyze, interpret, draw independent conclusions, and communicate effectively, both individually and as part of a team.	5
10	They are provided with opportunities to acquire the necessary skills and competencies to develop professionalism in the banking and financial services industry or to move on to further study within the discipline.	4

COURSE EVALUATION METHOD

Method	Quantity	Percentage
Midterm Exam(s)	1	30
Term Paper	1	20
Final Exam	1	40
Attendance		10
	Total Percent:	100%

ECTS (ALLOCATED BASED ON STUDENT WORKLOAD)

Activities	Quantity	Duration(Hours)	Total Workload(Hours)
Course Duration (Including the exam week: 16x Total course hours)	16	3	48
Hours for off-the-classroom study (Pre-study, practice)	16	3	48
Mid-terms	1	16	16
Assignments	1	12	12
Final examination	1	16	16
Other	1	10	10
Total Work Load:			150
Total Work Load/25(h):			6
ECTS Credit of the Course:			6

CONCLUDING REMARKS BY THE COURSE LECTURER

They are going to be updated through the semester.