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The current and official versions of the course specifications are available on the web at https://www.usq.edu.au/course/specification/current.
Please consult the web for updates that may occur during the year.

FIN2108 Credit Analysis and Lending Management

Semester 2, 2021 Springfield On-campus
Short Description: Credit Analysis & Lending Mgt
Units : 1
Faculty or Section : Faculty of Business, Education, Law and Arts
School or Department : School of Business
Student contribution band : Band 4
ASCED code : 081101 - Banking and Finance
Grading basis : Graded

Staffing

Examiner: David Troedson

Requisites

Pre-requisite: FIN1101

Other Requisites

Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at http://www.usq.edu.au/current-students/support/computing/hardware.

Rationale

Lending constitutes one of the most important functions of any financial institution. In a typical bank, around 70% of funds are invested in loans and advances. As we have seen with the global financial crisis, if the lending function is not managed properly, it can lead to serious credit quality issues that can have a destabilising effect on individual lenders and ultimately on the financial system. To manage the lending function properly, and to mitigate credit quality problems, adequately trained staff are required. The goal of this course is to equip students with requisite skills toward this end.

Synopsis

Business firms extend credit, banks extend loans. The focus of this course is credit analysis and lending. It provides an overview of lending principles, covers analytical aspects such as the financial analysis of a firm to determine credit worthiness, provides an overview of policy and legal issues, and looks at special types of credits like consumer loans, real estate loans, corporate loans and international loans. It also covers related topics such as securitisation, portfolio management and problem loan management.

Objectives

On successful completion of this course, students should be able to:

  1. synthesise credit assessment and lending knowledge, concepts, regulations, theories, principles and processes relevant to bank loans officers across a range of banking activities and loan types;
  2. think critically, constructively and logically about lending issues, ethical issues, theories and problems arising from asymmetric information and strategies that banks use to lessen the negative impacts of such problems;
  3. apply the tools of credit analysis and lending management to solve problems faced by banks in assessing loans and managing loan portfolios;
  4. confidently and coherently communicate insights gleaned through financial statement analysis and credit assessment of borrowers to an appropriate audience;
  5. demonstrate the information literacy skills required of a financial services professional through reading and interpreting financial statement information and other relevant financial metrics and discussing loan products and facilities and other banking services.

Topics

Description Weighting(%)
1. The principles of lending and lending basics 8.00
2. Financial statements analysis 10.00
3. Credit scoring techniques 8.00
4. Credit risk 1 9.00
5. Credit risk 2 9.00
6. Consumer lending 8.00
7. Real estate lending 8.00
8. Security, consumer credit legislation and legal aspects of lending 8.00
9. Corporate lending 8.00
10. Small business lending 8.00
11. International lending 8.00
12. Problem loan management 8.00

Text and Materials

ALL textbooks and materials available to be purchased can be sourced from USQ's Online Bookshop (unless otherwise stated). (https://omnia.usq.edu.au/textbooks/?year=2021&sem=02&subject1=FIN2108)

Please contact us for alternative purchase options from USQ Bookshop. (https://omnia.usq.edu.au/info/contact/)

Koch, T & MacDonald, S 2015, Bank Management, 8th edn, Cengage Learning, Australia.
(etext available from: www.cengagebrain.com.au.)
Sathye, M, Bartle, J & Boffey, R 2017, Credit analysis and lending management, 4th edn, Mirabel Publishing, Prahran, Victoria.
The text by Koch and MacDonald is also used in FIN3109 Managing Financial Institutions.

Reference Materials

Reference materials are materials that, if accessed by students, may improve their knowledge and understanding of the material in the course and enrich their learning experience.
Hull, JC 2018, Risk management and financial institutions, 5th edn, Pearson Prentice Hall, Boston, Massachusetts.
Hunt, B & Terry, C 2018, Financial institutions and markets, 8th edn, Cengage Learning, South Melbourne, Victoria.
Martin, RD 2008, Banking and finance: in principle, Lawbook Co, Pyrmont, New South Wales.
Tyree, AL 2018, Banking law in Australia, 9th edn, LexisNexis Butterworths, Chatswood, New South Wales.

Student Workload Expectations

Activity Hours
Directed Study 36.00
Independent Study 129.00

Assessment Details

Description Marks out of Wtg (%) Due Date Notes
QUIZ 1 10 10 13 Aug 2021 (see note 1)
ASSIGNMENT 30 30 20 Aug 2021 (see note 2)
QUIZ 2 20 20 15 Oct 2021
QUIZ 3 40 40 22 Oct 2021 (see note 3)

Notes
  1. Online quizzes will be conducted during the semester. Further details will be provided on the course Study Desk.
  2. Your assignment includes assessing the credit worthiness of a business by applying financial techniques including ratio analysis and summarising your results.
  3. This assessment functions as an open-book final exam. All topics are covered. Total working time is 2 hours and 30 minutes. Further details will be provided on the course Study Desk

Important assessment information

  1. Attendance requirements:
    Online: There are no attendance requirements for this course. However, it is the students' responsibility to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

    On-campus: It is the students' responsibility to attend and participate appropriately in all activities (such as lectures, tutorials, laboratories and practical work) scheduled for them, and to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

  2. Requirements for students to complete each assessment item satisfactorily:
    To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.)

  3. Penalties for late submission of required work:
    Students should refer to the Assessment Procedure http://policy.usq.edu.au/documents.php?id=14749PL (point 4.2.4)

  4. Requirements for student to be awarded a passing grade in the course:
    To be assured of receiving a passing grade a student must obtain at least 50% of the total weighted marks available for the course (i.e. the Primary Hurdle), and have satisfied the Secondary Hurdle (Supervised), i.e. the end of semester examination by achieving at least 40% of the weighted marks available for that assessment item.

    Supplementary assessment may be offered where a student has undertaken all of the required summative assessment items and has passed the Primary Hurdle but failed to satisfy the Secondary Hurdle (Supervised), or has satisfied the Secondary Hurdle (Supervised) but failed to achieve a passing Final Grade by 5% or less of the total weighted Marks.

    To be awarded a passing grade for a supplementary assessment item (if applicable), a student must achieve at least 50% of the available marks for the supplementary assessment item as per the Assessment Procedure http://policy.usq.edu.au/documents/14749PL (point 4.4.2).

  5. Method used to combine assessment results to attain final grade:
    The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course.

  6. Examination information:
    There is no examination in this course.

  7. Examination period when Deferred/Supplementary examinations will be held:
    Deferred and Supplementary examinations will be held in accordance with the Assessment Procedure https://policy.usq.edu.au/documents/14749PL.

  8. University Student Policies:
    Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene University policies and practices. These policies can be found at http://policy.usq.edu.au.

Assessment Notes

  1. Referencing in assignments:
    Harvard (AGPS) is the referencing system required in this course. Students should use Harvard (AGPS) style in their assignments to format details of the information sources they have cited in their work. The Harvard (AGPS) style to be used is defined by the USQ Library's referencing guide at http://www.usq.edu.au/library/referencing.

Date printed 8 November 2021