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4 - AAU - Accounting and Financial Auditing

AAU 176 - Performance Analysis Using CAMELS

Code Start Date Duration Venue
AAU 176 20 November 2023 5 Days Istanbul Registration Form Link
AAU 176 11 December 2023 5 Days Istanbul Registration Form Link
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Course Description

This product assesses different aspects of commercial banks operations to determine the soundness of its condition. The courses describe the methodology used by examiners to assess these factors and the criteria for assigning ratings to a bank. With the help of a case study, the courses demonstrate the method of identifying risks in internal processes, the evaluation of these risks, monitoring procedures and internal controls. The case study guides us on how component ratings and composite ratings are assigned by examiners to a bank.

Course Objectives

  • Understand the concept of CAMELS
  • Understand the importance of earnings to a bank’s financial condition
  • Discuss the concept of asset quality
  • Be familiar with evaluation factors and ratings
  • Identifying areas sensitive to market risk

Who Should Attend?

  • Supervisory Agencies Workers
  • Central Banks Staff
  • Financial Institutions Staff
  • Commercial Banks Staff
  • Investment Banks Staff
  • Housing Societies/Thrifts Workers

Course Details/Schedule

Day 1

  • Introduction to CAMELS
  • CAMELS (description of each component)
  • Purpose of a rating system
  • Earnings Ability
  • Different components of earnings
  • Case study

Day 2

  • Importance of earnings to a bank’s financial condition
  • Different earnings ratios on a UBPR
  • Capital Adequacy
  • The purpose of capital
  • Factors for evaluating capital adequacy
  • The measurement of capital
  • Prompt Corrective Action

Day 3

  • Concept of asset quality
  • Impact of asset quality on bank’s financial statements.
  • Concepts of past-due and non-accrual loans
  • Analyzing asset quality ratios
  • Asset classification and types of asset classification
  • Rating of asset quality
  • Adequacy of allowance for loans and leases losses (ALLL)

Day 4

  • Management organization and function
  • Assessment of management
  • Evaluation factors and ratings
  • Liquidity Risk & Liquidity management
  • Factors for evaluating liquidity
  • Ratings
  • Case study for analysis

Day 5

  • Sensitivity to Market Risk
  • Components of market risk
  • Identifying areas sensitive to market risk
  • Measuring Interest rate Risk
  • Evaluating and rating sensitivity to market risk
  • Composite rating guidelines
  • Summary of component ratings
  • Assigning a composite rating to the case bank.