Mastering SME Banking Business & SME Product Development

Two Day Work Shop

Course Outline

1.Welcome and Introduction	Download
Programme overview Delegates’ expectations
2.Session 1:Strategies in corporate banking
How to build a strong and focused SME banking business Assessing the competitive landscape in developed and emerging markets Different strategies in corporate banking a.Workshop: Products and services required by customers Corporate banking SME banking Retail banking The profitability of different banking products The key success factors in: Corporate banking SME banking Retail banking b.Workshop: The customers’ view of banks: How to position your bank in the eyes of your corporate clients.
3.Session 2:The importance of the planning process for SME banking
Mission and vision statements Setting SMART objectives for The SME banking portfolio A region or branch SME- account officers Defining financial and performance goals Profit goals Market goals Product goals Cost targets Portfolio targets The execution of the planning process Review of performance goals a.Workshop: Setting individual goals for a SME division, a branch or account officers responsible for SME banking.
4.Session 3:Identifying and approaching attractive SME customers
How to screen the relevant market by Sectors Regions Products and services Customer and supply chains Identifying attractive customers Assessing their existing and future potential Matching demand and the banks product and service capabilities Successful client segmentation on the level of The bank A branch Individual customer relationship managers
5.Session 4:Identifying and approaching Designing a modern branch network
Designing the national branch network Delivering through different sales channels Branch network Direct sales Internet banking Other sales channels The pricing policy in the different sales channels The importance of the different customer segments The role and responsibility of the regional and branch manager a.Workshop:Towards an effective sales management: Understanding the product offering and the pricing policy in the different sales channels.
6.Session 5:Best practice in customer relationship management
Identifying and approaching attractive SME clients Matching the customer’s needs and the banks capabilities Defining the client’s needs and preparing the call The right segmentation of the different customers Allocation of time by the RM How to improve the profitability of a SME portfolio Improving cross selling Dealing with loss leaders How to sell non- financial products a.Case study: Delegates will analyse the performance of a medium sized corporate client, assess its requirements and develop a marketing strategy.
7.Session 1:Preparing and executing the customer call
Understanding the client’s financial needs Preparing the call Analysing the financial statement Asking operational and financial questions Understanding the competitive environment Making proactive product proposals Services and lending Transactional products Risk protection products Developing a client strategy Offering different financial solutions Learning from past successes and failures a.Case study:Workshop: Developing a questionnaire for the preparation of the call. b.Case study:Delegates will analyse the performance of a medium sized corporate client, assess its requirements, and develop a marketing strategy.
8.Session 2:Product bundling and the sale of non- financials’ productsl
Introduction to product bundling How to identify the needs of different customer groups Designing the right package What products and services to include Optional offerings What products and services to avoid The selling of non- financial products Insurances Knowledge based products and services o Sector specific solutions Finding the right value adding partners o Searching for alternative sales channels Best practice in bank assurance What did work? Why did so many ventures failed?
9.Session 3:Introducing alternative product offerings and financing the supply chain
Defining core corporate products and services Lending based products Transaction based products and services Fee based products and services The different features of a loan product Introducing alternative lending products Receivables and order financing Leasing Factoring/ bill discounting Inventory based lending The concept of supply chain financing The companies involved How to build supply chain financing Products and services involved The chances and risk aspects Why is customer financing different? a.Workshop:Delegates will ‘standardise’ different product offerings and apply them to the SME market. b.Case study:Understanding the chances and requirements of a modern supply chain arrangement.
10.Session 4:Measuring product and client profitability in SME banking
Different concepts of measuring profitability in SME banking Revenues/volume/risk-weighted assets Regulatory capital RAROC and RORAC EVA Applying risk adjusted pricing in SME banking Standard risk cost and expected loss expectation Unexpected losses Economic capital versus regulatory capital Establishing the minimum price for banking products Factors influencing the price of banking products Understanding the pricing practice in SME banking a.Workshop:How to price a product in a competitive banking environment?
11.Session 5:Mastering credit risk in SME banking
Introduction to risk in corporate banking Developed markets Emerging markets How Basel II has changed the perception of risk Defining ratings for corporations Qualitative assessment Quantitative ratios Defining an efficient scoring system for SME customers Quantitative factors Qualitative factors The weighting of the factors What are the differences to a consumer lending scoring model? Defining ratios for structured lending products a.Workshop:Analysing the different rating models for corporate lenders and SME clients. b.Case study: The effectiveness of financial ratios and qualitative factors in rating and scoring systems. How to apply them to the SME sector.
12.Session 1:Monitoring and managing problem loan
Identifying key risk factors for loans Understanding early warning signals How to escalate problem loans The role and responsibility of the sales department and the credit department How to handle the customer relationship? a.Case study: Understanding key risk factors and early warning signals in the SME sector.
13.Session 2:Managing defaulted loans
The role and responsibility of the work out department Assessing the viability of the enterprise Refinancing under the going concern assumption Assessing the viability of the enterprise and the loan exposure The different techniques of refinance Prolongation Change of terms and conditions Covenants The products used Debt- equity swaps Mezzanine loans Subordinated debt and its treatment Contributions from owners, suppliers, other sources Assessing the banks relative position in the bankruptcy case Changing management and ownership Determining the breakup value Calculating the write- off amount a.Case study: Understanding the value of loans under different stress scenarios.
14.Session 3:A streamlined credit decision process for SME customers
Segregation of duties in the loan underwriting process Defining the appropriate approval level for loans Manual interference in the scoring process The governance of credit committees/ decisions Alternative route: credit decision by an expert system Joint portfolio responsibility a.Case study:Improving the cooperation between the sales organisation and the credit department.
15. Session 4:Understanding operational risk in SME banking
Level of operational risk Risk indicators Assessing operational risk How to avoid operational risk a.Workshop: Calculating the potential losses from operational risk.
16.Session 5:Introduction to portfolio management
Role and responsibility of the risk management department Establishing risk- limit systems For portfolios Regions and branches Clients Introducing a loan transfer system Applying risk mitigating factors to a SME portfolio Establishing a value creating Management Information System a.Round table: Discussion about risk limits and performance parameters for SME banking.

Mastering SME Banking Business & SME Product Development

Two Day Work Shop

Course Outline

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