BANKING

MBA 1


SPRING 2013

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Course Title: Banking
Program: MBA 1
Semester: Spring 2013
Course Instructor: Dr. Ayesha Afzal
Instructors Email: ayeshaa@lahoreschool.edu.pk
Office: H3-39
Office Hours: By appointment only.
Extension: 261
Pre Requisites: Advanced level Courses in Economics & Financial Accounting.
Please communicate only through email. I will not reply to calls on my cell phone or SMS.

COURSE DESCRIPTION

The main objective of this course is to provide students an understanding of
fundamentals and advanced elements of structure, business operations and management of
commercial banks in a deregulated environment. The emphasis, however, is on principles
and practices underlying banking operations at an institutional level. This has to be done in
the context of the structure of the banking system generically as well as it prevails in Pakistan
in current times.
The course is a hybrid of basic and advanced elements of both theoretical and applied
aspects, though at the start, more emphasis is given to basic concepts and analytical
methodologies concerning banking institutions, their structure and business operations. The
focus is on the mainstream of modern banking business as practiced worldwide as well as in
Pakistan.

TEACHING METHODOLOGY

The course will focus on understanding the banking business as a whole and on the
evaluation of the financial statements of the banks. Class lectures will include the
fundamentals and applied side concepts that will be covered from the text book and State
Bank Publications that will be distributed during the semester. As the course is analytical in
nature, active participation of students will be required. A major part of the course relies on
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application of concepts learned during the lecture sessions to real world scenarios. This will
be achieved through extensive use of case studies on risks, returns and solvency of financial
institutions pertaining to the recent changes in the financial structures globally.

COURSE CONTENTS
Banking business as a whole will be discussed at two levels:
Basic
o Organization & structure of banks
o Financial statements & evaluation.
o Funding
o Bank lending
o Structure of interest rates
o Banking risk
Advanced
o Management of core banking business
o Management of loan portfolio
o Analysis and Evaluation of bank Performance
o Role of Supervision



TERM PROJECT
A group of 6 students (there will be no exception) will be allocated a Pakistani
Financial Institution for detailed analysis. Students will apply tools and techniques learned
during the course on the last 4 published financials and will evaluate the performance of the
entity accordingly. This will be the practical application of the concepts learned during the
course. Every group has to present a final report incorporating the main findings of the
analysis. Sample annual reports will be discussed during the course.





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ASSESSMENT CRITERIA

End Term Test 40%
Mid Term Test 25%
Assignment & Cases 10%
Term Project 10%
Quizzes 10%
Article Presentation 5%

Note: There will be no allocated marks for the attendance, however according to Lahore School Regulations,
a student having an attendance of less than 80% will not be allowed to take the end term test and
consequently will not be eligible for a pass grade. There will be no makeup quizzes either.


SUGGESTED READINGS
Main Text
Bank Management and Financial Services, Peter S. Rose and Sylvia C. Hudgins. 8
th

Edition. (2010).
Financial System and Economic Development-Pakistan, Shakil Faruqi, vol 1, (2011)

Supplementary Readings
State Bank Publications.
Basle Committee publications

Course Pack is available with the photocopier.



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Detailed Lectures and Discussion Sessions

Lecture No Lecture Session Discussion Session

1
An overview of banks and the financial
services sector
An Introduction to the Business of
Banking

2
Managing Deposit services Assignment 1: Problem Set
3 Pricing Deposit Services Assignment 2: Problem Set
4 Lending Policies Quiz 1
5 Lending Policies and Money Markets Assignment 3: Problem Set
6 Lending Procedures Assignment 4: Problem Set
7 Lending Procedures and instruments Assignment 5: Problem Set
8 Lending to Business Firms Assignment 5: Problem Set
9
Financial ratio Analysis of a customers
financial Statements
Quiz 2
10 Pricing Business Loans Assignment 6: Problem Set
11 Classification of Banks
Quiz 3
12 Case Discussions Assignment 7: Problem Set
13 Case Discussions Case Discussions
14 MID TERM MID TERM
15
State Bank Prudential Regulation for
Corporate Lending
Mid Term Discussions
16
State Bank Prudential Regulation for
Corporate/Commercial Lending
Article discussion
17 Financial Statements of Banks Quiz 5
18 Financial Statements of Banks Assignment 8: Problem Set
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19
Measuring and evaluating the
performance of Banks
Assignment 9: Problem Set
20
Measuring and evaluating the
performance of Banks
Assignment 10: Problem Set
21 Basel Committee on Banking Supervision Assignment 11: Problem Set
22 Internal Rating Based Approach Assignment 12: Problem Set
23 Project Discussion Quiz 6
24 Special Topics of Banking Assignment 13: Problem Set
25 Revision Quiz 7
26 Project Presentations Project Presentations
27 Project Presentations Project Presentations
28 END TERM END TERM