Faculty of Business: Finance and Economics
Credit points: 6 cp

Subject level: Undergraduate

Result Type: Grade and marks

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

Handbook description

This subject teaches the fundamentals of lending practice and the provision of other financial services which equips students for entry into banking and other financial institutions that provide financial services. Areas covered include: managing loans and the loan portfolio; the importance of the loan policy; commercial lending; credit analysis; agricultural finance; consumer credit and consumer credit regulation; the changing nature of financial services delivery; project finance; trade finance; international banking; merchant banking; funds management; insurance; and e-commerce.

Subject objectives/outcomes

On successful completion of this subject, students should be able to:

1. Gain appreciation of the range of lending products and delivery of services provided by financial institution
2. Evaluate the quality and the delivery of financial services products provided by financial institutions
3. Develop awareness and the skills necessary to the practice of lending and the provision of a broad range of services
4. Appreciate the ethical issues in the provision of financial services and the impact of legislations on the provision of products, services and advice.

Contribution to graduate profile

This subject provides knowledge of the products and services in financial institutions. It forms an integral part of the banking major, contributing to the objectives of the major by focusing on the development of vocationally relevant understandings of products and services provided by financial intermediation and their use in a modern economy.

Teaching and learning strategies

The course will be taught using a combination of lectures and tutorials. Both printed and electronic learning materials and resources will be available to support flexible learning. Lending products and the financial services promoted by Australian financial institutions will be evaluated and analysed in tutorial discussion.

Content

• Structure of the credit organisation
• Lending function, loan policy and the loan portfolio
• Commercial lending: credit analysis, loan covenants and consumer credit
• Project finance: structure, risk analysis, project analysis
• Trade finance: facilities, assistance for export and import, documentation
• Syndicated loans: facilities in the Euromarkets and domestic markets, complex financial instruments
• International banking: organisational forms, foreign exchange risk, merchant banking
• Financial products and services: funds management, insurance products, trustee and custodial services
• Regulation, e-commerce, internet banking and broking.

Assessment

Case Study (Group)	25%
This will assess students understanding of how the theories and concepts associated with managing a financial institution and applying risk management. It assures objectives 1-4.
Mid-Semester Examination (Individual)	25%
The mid semester examination will require the students to consider the impact of the international finance environment on a multinational firm's foreign exchange risk management It assures objectives 1 and 2.
Final Examination (Individual)	50%
The final examination will test students' understanding of the theories, risk management and issues in financial services. It tests their proficiency in using the financial management techniques and global financial policies for multinational corporations. It assures objectives 1-4.

Examinations will be conducted under University examination conditions, and hence thoroughly address concerns regarding secure assessment. The assignment will be secured through a combination of updating of assessment tasks across semesters and/or plagiarism detection software.

To pass the subject, students must achieve at least 50% of the final overall grade.

Recommended text(s)

Sathye M., Bartle J., Vincent M. and Boffey, R. (2003) Credit Analysis and Lending Management, John Wiley and Sons, Australia.

Indicative references

Hogan, W., Avram, K.J., Brown, R., Degabriele R., Ralston, D., Skully, M., Hempel, G., Simonson, D. and Sathye, M. (2004) Management of Financial Institutions, 2nd ed. John Wiley and Sons, Australia.

Bruce Mc Kern Pollard Skully Handbook of Australian Corporate Finance 5th edition 1997 Butterworths.