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25752 Financial Institution Lending

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:

Postgraduate

Result type: Grade and marks

Requisite(s): ((25742 Financial Management OR 25746 Financial Management: Concepts and Applications) AND 25741 Capital Markets)
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.

Description

This is a specialised subject in the risk management of the loan assets of financial institutions. It provides students with knowledge of the theory of financial intermediation, and information economics and its application in achieving the maximum shareholder return while managing the level of risk associated with loan products. Topics include: the formulation of loan policy; the managing and selection of loans; loan pricing; individual loan risk management; financial contracting; managing problem loans and specialist loan risk areas such as project and infrastructure finance; corporate loans; consumer lending; small and medium enterprise lending; and loan structuring, documentation and collateral. The subject includes a number of real case studies in major lending disciplines such as project and infrastructure financing, small and medium enterprise lending, consumer lending, corporate lending, and problem loans.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:
1. Appreciate the pivotal role of the loan markets in the real economy
2. Apply loan selection models & techniques to the borrower market
3. Design and structure loan products and contracts to meet the needs of borrower & lenders
4. Develop skills in the application of unique and specialist loan funding techniques
5. Recognize and managed the risks and rewards in the loan markets using financial contracting and other loan structuring devices
6. Identify & solve problem issues in the lending market

Contribution to the development of graduate attributes

This subject contributes to the degree by explaining to students the core principles of loan funds management. The subject begins with a discussion of general loan policy formulation and the role of the flow of funds to the real economy. Secondly, the course discusses the key issues of risk and reward in the loan funds market and the intricacies of loan selection and borrower behaviour. Next students are introduced to a range of loan products, loan structuring and specialized loan markets. The key focus of the course is the impact of lending and borrowing on the real economy and the effect of the risk reward trade-off in a lending context. Students are exposed to the theoretical concepts underpinning the lending market and a number of factual cases.

Teaching and learning strategies

The subject is taught in a flexible learning mode delivered through a combination of seminars and workshops and online resources (video, interactive workshops and self-paced assessment). The learning mode is integrative, formative and problem based. Face to face sessions are supplemented at every level with additional self-paced resources delivered via UTS Online. Significant use is made of learning via factual global case studies. Students are encouraged to share knowledge and to work in effective teams in developing solutions and progressing understanding of the material.

Content (topics)

  • The Lending Institution: Policy & Markets
  • Selecting the Loan Portfolio
  • Loan Products & Loan Structuring
  • Specialised Loan Markets

Assessment

Assessment task 1: Assignment (Group)

Objective(s):

This addresses subject learning objective(s):

1, 2, 3 and 4

Weight: 30%
Length:

Maximum 5 pages

Assessment task 2: Assignment (Individual)

Objective(s):

This addresses subject learning objective(s):

5 and 6

Weight: 30%
Length:

Maximum 5 pages.

Assessment task 3: Final Exam (Individual)

Objective(s):

This addresses subject learning objective(s):

1, 2, 3, 4, 5 and 6

Weight: 40%
Length:

2 Hours

Minimum requirements

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

Required texts

Baesens, B., Roesch, D. and Scheule, H., 2016. Credit risk analytics: Measurement techniques, applications, and examples in SAS. John Wiley & Sons, ISBN-13: 978-8126567027

Hong Kong Institute of Bankers, Bank Lending, 2012, John Wiley & Sons, ISBN-13: 978-0470827451