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M21019 - Role of valuations when obtaining financing and monitoring credit facilities (Online)

  • 18 May 2021
  • 10:00 - 11:30
  • Online Webinar

Registration


Register
Registration Time: 09.45
Sessions Time: 10:00- 11.30
Speaker: Mr. Chris Meilak
Venue: Online Webinar
Participation Fees (The Institute is now accepting payments via Paypal)
MIA Members: €20
Non-MIA Members: €40
Retired Members: €10
Students: €15
*Group bookings for 3 or more participants available.

Synopsis

This session will focus on three main aspects:
(a) The link between the type of credit being granted or credit review being undertaken, and the valuation exercise typically needed;
(b) The requirements from a “Bank” perspective, with reference to the ECB/ EBA guidelines
(c) Steps in the credit approval/ monitoring process, and their valuation implications

Background Information 

Credit portfolio management is a key function for financial institutions, especially banks (but also including insurers and institutional investors), with large, multifaceted portfolios of credit, often including illiquid loans. Historically, credit portfolio management was seen as merely understanding the institution’s aggregate credit risk, improve returns on those risks and identifying and managing concentrations of risk.
The 2007 financial crisis changed the way most functions at these institutions operate and manage their credit portfolio. While the historical role of such a function remains, new regulatory requirements, especially with respect to capital and liquidity, increasing cost and margin pressure, and changed market conditions have pushed credit portfolio management into a broader role with the need to align closely with other areas, such as finance, treasury, risk data and methodology, and business-origination functions. Valuations play a key role in the various stages of credit portfolio management. The Covid-19 pandemic has further increased the focus on active credit portfolio management.

Objectives of the session

The objective of this session is to discuss and provide suggested answers to the following questions:
What is the role of valuations in credit portfolio management? What type of valuations are typically needed by such financial institutions, and when are they needed within the credit portfolio management process?
These questions will be explored in the context of various examples of situations linking valuations requests to the credit approval/ monitoring process of a typical financial institution. An overview of Covid-19 implications on both credit approval/ monitoring and valuations will also be considered.

Topics on the agenda

- Overview of credit portfolio management, including credit approval/ reviews, and corresponding types of valuation exercises (e.g. General credit; asset-specific credit; asset(s) as collateral, and related business/ asset valuation exercises
- The role of valuations in pricing credit
- Steps in credit approval/ monitoring process - Is a new valuation required? Most appropriate valuation approach/ method selection? Preferred preparation and presentation?
- Valuations by types of assets (e.g. immovable/ movable)
- New credit vs. annual credit review/ refinancing
- Leveraged lending
- Covenant conditions
- Timing/ period of credit review
- ‘Bank perspective’ – the requirements, including reference to specific ECB supervision/ BIS requirements on credit reviews, and EBA guidelines on loan origination and monitoring
- Requirements for valuations by bank’s architect

Target Audience

This seminar is relevant for all professionals, entrepreneurs, students and anyone currently involved and interested in valuation methodologies and applications to funding and provision of finance, especially in the context of financial institutions and the capital markets.

Speaker's Profile

Chris Meilak is a Certified Public Accountant, Economist and Executive Director at EY Malta, leading the Valuation, Modeling and Economics sub-service line in Malta.
Chris joined EY in 2006 and has carried out a number of assignments in relation to valuations, both in terms of preparation and review in the context of assurance engagements. Chris holds an MA in Economics and the ACCA degree, and is a Visiting Lecturer in the Department of Economics, University of Malta.

EVENT CPE COMPETENCES

1.5 Hours Core 

WEBINARS TERMS AND CONDITIONS

Terms and conditions  apply

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