North South University School of Business BBA Program

Course Title : Bank Management (FIN 464) Instructor : M. Morshed, Senior Lecturer, School o Business Office Room : N!" #6$ Office Hours : %B! Telephone : &&'())). *+t. ,#)& (o ice) E-mail : mmorshed@northsouth.edu Course Descriptions %his course has a some-hat more .ractical orientation than man/ other courses in the 0usiness .rogram, ocusing as it does on the microeconomic .ro0lems o inancial management o 0anking irms. %his does not mean, ho-e1er, that the course is de1oid o theoretical interest. %he course 0uilds on theories and models co1ered else-here in the .rogram2 .articularl/ those detailed in the course o Banking and Finance. It also raises some ne- theoretical .ro0lems or consideration, man/ o them concerned -ith the -a/ -e need to conce.tuali3e the 0anking irm. Course Objectives %his course e+amines the role and im.ortance o 0ank inancial management to the modern 0ank. It teaches the 0asic models o inancial management taught 0/ 4ni1ersit/ *conomics 5e.artments and Business Schools, -hich -ere constructed rom the e+.erience o mature ca.italist economies. %he course discusses the 1arious trends sha.ing 0anking markets, such as institutionali3ation, securiti3ation, glo0ali3ation and concentration. !mong its aims are the ollo-ing %o set the 0anking irm in the conte+t o a changing inancial ser1ices industr/ %o look at the role o the inancial manager -ithin the 0anking irm %o e+amine 0ank ca.ital and ca.ital structure, and to consider the 6uestion o the ade6uate regulation o the 0anking sector to ensure its sa et/, to .reser1e 0ank li6uidit/ and .re1ent 0ank ailures. Suggested Readings eter S! Rose " S#lvia C! Hudgins$ %an& 'anagement " (inancial Services$ )th edition$ *++)$ 'c,ra--Hill publications! %imoth/ 7och and S Scott Mac5onald, Bank Management, Fourth *dition, ())), 5r/den 8ress, ISBN))$)(44)(,. 9eorge :. :em.el ; 5onald 9. Simonson, Bank Management: %e+t ; "ases, 'th edition, 8rentice :all 8u0lication. R! .! Ho-lader " S#ed .shraf .li$ %an&ing /a- and ractice$ Revised Edition$ *++0-)$ 'o-la %rothers!

Course Outline Chapters Contents /ec! 1 Chapter !N <=*>=I*? <F B!N7S ; %:*I> S*>=I"*S: ?hat is a Bank@ %he One 234 Ser1ices 0anks o er to the .u0lic2 %rends a ecting all 0anks. 23 " *4 Chapter IM8!"% <F 9<=*>NM*N% 8<LI"A ; >*94L!%I<N <N B!N7IN9: 25 " 64 T-o 2*4 >easons 0ehind the regulations, "entral Bank ; monetar/ .olicies. Chapter %:* <>9!NIB!%I<N ; S%>4"%4>* <F B!N7S ; %:*I> IN54S%>A: 27 " 84 Three 254 5i erences 0et-een large ; small 0ankCs organi3ation charts2 4nit Banking2 Branch Banking2 Bank :olding "om.an/ <rgani3ation2 Net-orking2 >easons 0ehind the e+.ansion o interstate 0anking s/stem. Chapter *S:%!BLIS:IN9 N*? B!N7S, B>!N":*S, !%Ms, %*L*8:<N* 20 " )4 (our 264 S*>=I"*S !nd ?*B SI%*S: *sta0lishing ullDser1ice 0ranch o ices E choosing locations, designing ne- 0ranches. Ne- trends ; technolog/. Chapter %:* FIN!N"I!L S%!%*M*N% <F B!N7: Bank !ssets2 Bank Lia0ilities2 29 " 3+4 (ive 274 < DBalanceDSheet Items2 "om.onents o the Income Statement2 <ther use ul Bank Financial Statement. Chapter M*!S4>IN9 ; *=!L4!%IN9 B!N7 8*>F<>M!N"*: *1aluating a 233$ 3* " Si: 284 0ankCs .er ormance2 Measuring >isk in 0anking2 %he im.act o si3e, location 354 ; regulator/ 0ias in anal/3ing 0ank .er ormance. Chapter !SS*% LI!BILI%A M!N!9*M*N%DE5*%*>MININ9 ; M*!S4>IN9 236 " 374 Seven 204 IN%*>*S% >!%*S: !ssetDlia0ilit/ management strateg/2 Interest rate risk D actors, measurement, com.onents. Chapter %:* IN=*S%M*N% F4N"%I<N IN B!N7IN9: Functions o a 0ankCs 238$ 304 Ten 23+4 Securit/ 8ort olioD Mone/ Market Instruments2 "a.ital Market Instruments2 <ther In1estment Instruments de1elo.ed more recentl/2 Factors a ecting the 0ankerCs choice among in1estment securities2 In1estment Maturit/ Strategies. Chapter LIF4I5I%A ; >*S*>=* M!N!9*M*N% S%>!%*9I*S ; 8<LI"I*S: %he 23)4 Eleven demand or ; su..l/ o li6uidit/2 ?h/ 0anks ace signi icant li6uidit/ 2334 .ro0lems@ Strategies or li6uidit/ Managers2 *stimating a 0ankCs li6uidit/ needs2 Factors in choosing among the di erent sources o reser1e. Chapter M!N!9*M*N% <F "!8I%!L: BankCs ca.ital ; >isk2 BankCs de enses 239 " *+4 (ifteen against risk2 %/.es o 0ank ca.ital2 >elati1e im.ortance o the sources o 2374 0ank ca.ital2 Measuring the si3e o 0ank ca.ital2 :o- much ca.ital does a 0ank need@ "urrent .ressure to raise more ca.ital2 8lanning to meet a 0ankCs ca.ital needs. Chapter B!N7 L*N5IN9D 8<LI"I*S ; 8><"*54>*S: %/.es o loans made 0/ 2*3 " **4 Si:teen 0anks2 >egulation o lending2 *sta0lishing a ?ritten Loan .olic/2 Ste.s in 2384 the lending .rocess2 "redit !nal/sis: ?hat makes a good loan2 Sources o in ormation a0out loan customers2 8arts o a t/.ical loan agreement. Chapter L*N5IN9 %< B4SIN*SS FI>M: %/.es o Business loans: !nal/3ing 2*5 " *64 Seventeen 0usiness loan a..lications2 Financial ratio anal/sis o a customerCs inancial 2304 statements2 %he Financial Le1erage Factor as a Barometer o a 0usiness irmCs ca.ital structure. Important ;ote %his course outline is tentati1e and the instructor has the right to modi / it de.ending on the class schedule and the .er ormance o the class.

Tentative E:am Schedule E:am MidD%erm , MidD%erm ( Final *+am S#llabus for E:ams E:am MidD%erm , MidD%erm ( Final *+am (Tentative Syllabus)

Date %B! %B! %B!

Time %B! %B! %B! Chapters "h. E ,,(,$,4 "h. E ',6,# "h. D ,),,,,,',,6,,#

<enue %B! %B! %B!

Term aper: %erm .a.er .la/s a ke/ role or e+am .re.aration. %his must 0e su0mitted in time. Late su0mission o term .a.er -ill not 0e entertained. Students ha1e to su0mit com.uter .rintDouts. 'ar&s .llocation Class .ttendance =ui> Term aper 'idterm 3 'idterm * (inal E:am : : : : : : 'G ,)G ,)G ('G ('G ('G ,))G

,rading olic# Students -ill 0e graded as .er uni1ersit/ grading .olic/. Important Instructions Students are re6uired to 0ring te+t0ook to e1er/ class. Students are not allo-ed to s-itch sections in 0et-een. Students cannot share an/thing during the e+amsH6ui33es. %here -ill 0e no makeDu. e+amH6ui3 in this course. I an/0od/ ails to sit or an/ e+am, sHhe can sit or com.rehensi1e e+am in the ne+t e+am. Students need to kno- ho- to use -ord .rocessing .ackages and s.readsheet so t-are. 4ni1ersit/ rules -ill 0e a..lied regarding using un air and unethical means (including cheating, .lagiarism) during e+amsH6ui33es. "ell .hones must 0e s-itched o during classes and e+ams. Incom.lete (I) -ill 0e gi1en in the case -here the student misses the inal e+am due to una1oida0le circumstances. But the students should in orm the instructor 0e ore su0mitting the grade. !n/ kind o threat and .ressure -ill not 0e tolerated. Se1ere action -ill 0e taken in that case.

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