Evaluating Credit Risk – Commercial Banking

Evaluating Credit Risk – Commercial Banking



Course Overview This comprehensive entry level credit analyst training program teaches participants how to efficiently analyze a credit and concisely communicate the risks associated with underwriting a credit transaction.  The program includes a combination of pre-work, lectures, group case exercises reflecting actual lending situations (corporate, middle market, or community banking), after-class assignments, and a final capstone case study.   


After-class assignments are evaluated by the instructor with written feedback provided to each participant.  With these exercises, participants are able to gauge their understanding and practice application of analytic concepts.  Through this process, the instructor can assess which participants may require additional attention.  


Completion of a final case study is required.  Each participant will analyze a complex lending scenario and write an analysis using the bank’s credit format or Paragon Hill’s recommended format.  The instructor will review the final case study exercise with a detailed evaluation forwarded to the participants and their supervisors.


After completing this program, participants should be able:

  • Apply a standardized credit analysis framework
  • Determine the success characteristics of an industry
  • Evaluate the potential for success of a company’s strategy
  • Establish if management has the capabilities to develop and implement appropriate strategies
  • Evaluate historic operating performance and financial position of a borrower
  • Construct various cash flow statements, including bank’s preferred approach
  • Analyze and forecast cash flow to determine capacity to repay debt
  • Identify primary and secondary sources of repayment
  • Structure a loan to include loan covenants that will preserve the value of repayment sources
  • Recognize early warning signs of a problem loan
  • Communicate results consistent with the bank’s expectations
Target Audience Entry or junior-level credit analyst involved in commercial lending.  It is preferred participants have at least three months of on-the-job experience in the sponsoring bank and completed a college level accounting class.  Program is limited to 25 participants.
Duration 14 days; Classes will typically run from 8:30am to 5:00pm, plus after-class assignments.


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Paragon Hill

Paragon Hill. specializes in the development, design and instruction of training programs for lending professionals at domestic and international banks.