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25574 Commercial Bank Management

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2019 is available in the Archives.

UTS: Business: Finance
Credit points: 6 cp

Subject level:


Result type: Grade and marks

Requisite(s): 25556 The Financial System
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.


This subject provides a detailed examination of the fundamentals of the management, risk, regulation and operation and performance of a commercial bank. The subject examines the theoretical concepts underpinning the operation of commercial banking in the form of financial intermediation and the unique role of banks in the economy. The structure of the financial system and problems posed by managing commercial banks in today's environment are given real-time practical applications that assess the performance of financial institutions from a creditor's, investor's and regulator's viewpoint. While the focus of the course is commercial banks, that is regulator registered banking institutions, a number of the concepts covered also have suitable application to other non-bank institutions. Students get to apply their knowledge in multiple assignments that are based on the analysis of real financial institutions and their risk exposures emanating from the lending and deposit-taking operations.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:
1. explain the major activities products and services provided of commercial banks
2. discuss the management of risk related activities undertaken by commercial banks
3. illustrate the role of commercial banks in the financial services market
4. evaluate the role of commercial banks in the function of the economy.
5. apply financial management knowledge to banking practice
6. appraise action in commercial banking situation

Contribution to the development of graduate attributes

This subject contributes to the degree by exposing students to the core principles of commercial bank management. Commercial banks play an important role in the economy, and the subject explains how financial institutions fulfill that role. Students develop teamwork skills through collaborative in-class activities and group work. They also develop oral and written communication competencies via their individual and group assignments. The subject is aligned with the following graduate attributes:

  • Business knowledge and concepts
  • Critical thinking
  • Creativity and analytical skills
  • Communication and interpersonal skills
  • Business practice oriented skills

Teaching and learning strategies

This subject uses a broad range of teaching and learning strategies (including active strategies), such as lectures, guest speakers, case studies, and student discussions. Weekly activities include (1) in-class discussions, (2) lectures, and (3) tutorials. In order to get the most of the subject, you should engage in all activities every week. A detailed schedule of weekly activities, as well as all subject material, is available via UTSOnline. Communication and feedback are also encouraged via UTS Online.

In-class discussions: Current banking news will be made available to students, and will form the basis of discussions about current bank operations and prudential regulation. Case studies will also be provided for discussion.

Lectures: Students are expected to attend all lectures. Lectures introduce and describe the key concepts through a range of interactive and engaging learning experiences. There will be opportunities for collaborative student discussions in which students can share their insights. Occasionally, lectures will be complemented by guest lectures from industry practitioners. Prior to attending each lecture, students are asked to watch a summary video available via UTS Online

Tutorials: Tutorials provide an interactive opportunity to extend and apply the material taught in lectures. The tutorial for a given week is based on the lecture material from the previous week. Tutorials commence in Week 2, and students are expected to prepare for them by completing the problems independently at home.

Market relevant projects: Students will participate in two in-class projects. In the first project students will work in teams to analyse the accounts of an Australian commercial bank and make management decisions to improve the resilience of the institution under consideration of interest rate risk, liquidity risk and credit risk. Students will write a report on their findings. In the second project students will analyse meta data from real mortgage portfolios and build a risk measurement model. Furthermore, students will discuss the application of their model in the context of mortgage underwriting of commercial banks and discuss professional standards mandated by prudential regulators. Students will write a report on their findings

UTS Online: UTSOnline is used to disseminate learning resources, including the subject outline, lecture slides, tutorial exercises, assignment briefs, announcements, and any supplementary information. Students are responsible for checking UTSOnline regularly. All announcements posted on UTSOnline will also be emailed to students, to ensure that they stay informed.

Content (topics)

  • The Australian financial services market;
  • Financial intermediation, its risks and the economics of information;
  • Measurement and analysis of commercial banks;
  • Asset, liability and capital decisions;
  • Managing loans and the loan portfolio;
  • Hedging and pricing of commercial loan products;
  • International commercial banking;
  • Regulation of financial intermediation.


Assessment task 1: Project (Group)


This addresses subject learning objective(s):

1, 2, 3, 4, 5 and 6

Weight: 30%

Students write a report on their findings and these submissions are graded on the following criteria:

  • Quality of work allocation within the group based on the following mechanisms:
    • Organisational structure
    • Funds management plan
    • Industry analysis
  • Quality of comparison of bank performance over time
  • Quality of comparison of bank performance with other banks
  • Quality of group self-reflection

Assessment task 2: Assignment (Individual)


This addresses subject learning objective(s):


Weight: 20%

Students will write a report on their findings, which will be graded on the following criteria:

  • Quality of risk measurement model
  • Quality of discussion
  • Quality of individual self-reflection

Assessment task 3: Final Examination (Individual)


This addresses subject learning objective(s):

1, 2, 3, 4, 5 and 6

Weight: 50%

Grading is based on the following criteria:

  • Accuracy of solutions for quantitative questions
  • Quality of answers for qualitative questions

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.

Required texts

Peter Rose and Sylvia Hudgins, Bank Management & Financial Services, 9th edition, McGraw-Hill Australia, ISBN: 9780078034671

Other resources

Other references

  • Hunt, B. & Chris T., 2015, Financial Institutions and Markets, 7th edition, Cengage Learning
  • Viney C., 2015 Financial Institutions Instruments and Markets 7th edition, McGraw Hill
  • Koch T. & MacDonald S.,2010, Bank Management 7th edition Mason, Ohio South-Western Cengage Learning
  • Rose P.S. & Hudgins S., 2013 Bank Management & Financial Services, 9th edition, McGraw Hill
  • Basel Committee on Bank Supervision:
  • Australian Prudential Regulation Authority: