Calculate core capital, leverage and risk-weighted asset ratios from published bank disclosures.
Finance & Banking
Analysing Bank Financial Statements Using the CAMELS Framework
Learn to read bank financial statements the way examiners do, scoring capital adequacy, asset quality, management, earnings, liquidity and market sensitivity into one composite CAMELS rating.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
A bank's published financial statements hide as much as they reveal unless the reader knows where risk concentrates on the balance sheet. This course teaches the CAMELS framework long used to structure that reading: capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk. Participants work through realistic disclosure formats to calculate common equity tier 1 and leverage ratios, classify loans by delinquency stage and compute non-performing loan and coverage ratios, decompose net interest margin into volume and rate effects, and calculate the liquidity coverage ratio and net stable funding ratio. Governance and management quality are assessed through board structure, risk appetite statements and audit findings rather than headline profit figures alone. The final module brings the five components together into a single composite rating, scored component by component and defended with evidence rather than impression. Case-based exercises use anonymised, representative disclosure extracts so participants practise the same calculations and judgement calls used in supervisory review, credit assessment and equity research, leaving with a repeatable method for scoring any bank's financial condition.
Expected Learning Outcomes
Assess loan portfolio quality using non-performing loan, coverage and provisioning metrics.
Analyse net interest margin drivers and distinguish recurring from non-recurring earnings.
Evaluate management and governance quality against risk appetite limits and audit findings.
Calculate liquidity coverage ratio, net stable funding ratio and funding concentration measures.
Interpret interest rate and market risk sensitivity disclosures for a banking institution.
Assign and justify a composite CAMELS rating supported by evidence from each component.
Who Should Attend
Bank supervisors and examiners conducting on-site or off-site institutional assessments.
Credit analysts assessing counterparty banks for correspondent or interbank exposure limits.
Equity and fixed income analysts covering listed banks and financial institutions.
Internal audit and risk staff benchmarking their bank against supervisory rating criteria.
Corporate treasury staff evaluating the financial strength of banking relationships.
Finance professionals transitioning into prudential regulation or bank supervision roles.
Course Modules
Select any module to see its sessions and points.
01Capital Adequacy and Balance Sheet Structure
2 sessions · 8 points
Session 1Reading the Bank Balance Sheet and Capital Ratios
- Identify the main components of a bank balance sheet, distinguishing earning assets from non-earning assets.
- Calculate the common equity tier 1, tier 1 and total capital ratios from a bank's regulatory disclosures.
- Reconcile risk-weighted assets against the balance sheet to understand where capital is consumed.
- Read a bank's Pillar 3 disclosure to extract capital composition and buffer requirements.
Session 2Capital Buffers, Leverage Ratio and Risk-Weighted Assets
- Distinguish the capital conservation buffer, countercyclical buffer and any systemic buffers applied to a bank.
- Calculate the leverage ratio and compare it against the risk-based capital ratios for the same institution.
- Assess how dividend policy and retained earnings affect a bank's capital trajectory over several years.
- Model the capital impact of a proposed loan book expansion using risk-weighted asset density assumptions.
02Asset Quality and Earnings Analysis
2 sessions · 8 points
Session 1Loan Portfolio Quality, Non-Performing Loans and Provisioning
- Classify loans by performing, past due and non-performing status using standard delinquency buckets.
- Calculate the non-performing loan ratio, coverage ratio and net charge-off rate from disclosure data.
- Assess loan loss provisioning under the expected credit loss model and compare stage one, two and three exposures.
- Identify concentration risk by sector, geography and single-name exposure within a loan portfolio.
Session 2Analysing the Income Statement and Net Interest Margin
- Decompose net interest income into volume and rate effects to explain a change in net interest margin.
- Calculate the cost-to-income ratio and identify the main drivers of operating expense growth.
- Distinguish recurring earnings from one-off items such as gains on disposals or litigation provisions.
- Assess fee and commission income trends against net interest income to judge revenue diversification.
03Management Assessment and Liquidity Analysis
2 sessions · 8 points
Session 1Evaluating Governance, Controls and Management Quality
- Evaluate board composition, committee structure and management experience against supervisory expectations.
- Review a bank's risk appetite statement and test whether stated limits match actual portfolio behaviour.
- Assess the independence and findings history of the internal audit and compliance functions.
- Identify red flags in related-party transactions and executive remuneration structures.
Session 2Liquidity Ratios, Coverage and Funding Concentration
- Calculate the liquidity coverage ratio and net stable funding ratio from a bank's disclosures.
- Assess deposit concentration and reliance on wholesale funding against a defined diversification target.
- Analyse the maturity mismatch between assets and liabilities using a contractual maturity ladder.
- Stress test a funding profile against a deposit outflow scenario to estimate the survival horizon.
04Sensitivity to Market Risk and Composite Rating
2 sessions · 8 points
Session 1Interest Rate and Market Risk Sensitivity Indicators
- Interpret economic value of equity and net interest income sensitivity disclosures under standard rate shocks.
- Assess trading book value-at-risk trends alongside the bank's stated risk limits.
- Identify foreign exchange and equity exposure embedded in available-for-sale and trading portfolios.
- Evaluate hedge effectiveness disclosures for interest rate and currency risk management programmes.
Session 2Assigning and Interpreting the Composite CAMELS Rating
- Score each CAMELS component individually using a defined ratings scale from strong to critically deficient.
- Combine component scores into a composite rating while weighting the components that most affect solvency.
- Draft a written rationale that links the composite rating to specific evidence from the five prior components.
- Present a CAMELS-based assessment to a credit or investment committee with a clear recommendation.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
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