Many investors simply don’t look at the financials sector. Perhaps they are unfamiliar with the jargon that underpins the sector, perhaps they view financial companies too much as a black box, or perhaps they baulk at the regulation the sector faces. All of which is a shame, because the sector is a large one and presents an opportunity.

Financials course - Behind The Balance Sheet

This course will equip participants with the tools necessary to understand the bank sector deeply.

It will guide investors what to look for when analysing a bank and will address many topical issues through the use of case studies.

Investors will leave with confidence that they can pick up a bank’s financial report or speak to a bank CFO and extract what they need to form an investment opinion.


Module 1: P&L Basics

Module 2: Risk

Module 3: Funding

Module 4: Capital

Module 5: Valuation

Module 6: Current strategic issues facing bank CEOs and CFOs

The basic course is one day, preferably delivered over two half-days. There is a lot to take in and some clients may prefer to add some of the optional modules and cover the subject comprehensively in 3 half day sessions.


The course is aimed primarily at institutional investors and is generally run in-house in the client’s office, for maximum efficiency and to minimise productive downtime – the hidden, but often the most important cost of training.

The course would also be suitable for bank middle management, consultants and others looking to sell into the bank sector at a senior level.

Portfolio managers will feel much more confident about banks after this course.


Marc Rubinstein has 25 years experience as a financials analyst. Like Steve, he has worked both on the buy-side and the sell-side. For ten years up to 2016 he was senior analyst and portfolio manager on the Lansdowne Global Financials Fund, a fundamental long/short fund focused exclusively on the global financials sector. The fund successfully navigated the financial crisis and won the Eurohedge long-term performance award for equity strategies in Jan 2010. Before his move to the buy-side in 2006, Marc had been an Institutional Investor ranked analyst on the sell-side, most recently at Credit Suisse, where he was a managing director overseeing its European banks team. Since winding up the Lansdowne financials fund in 2016, Marc has worked with various funds and financial institutions in a research and consulting capacity. He has also guest lectured at the London Business School on its ‘Banks and Financial Institutions’ class.

Marc Rubinstein


The course is structured in 6 modules, with some optional content (**). We can also run individual modules, for example for those wishing to understand the implications of IFRS 9:



  • Basic structure of bank income statement

  • Differences between retail banking, commercial banking, investment banking

  • Links between bank balance sheet and bank income statement (ROE introduction)

  • Banks as transformation providers

Net interest income

  • Sources of interest income: loan types, securities portfolios

  • Types of funding: demand deposits, time deposits, wholesale funding, subordinated debt

  • Net interest margin defined

  • Determinants of asset pricing (net interest margin versus risk)

  • Sensitivity of net interest margin to interest rates and yield curve **

  • Impact of current low rates on net interest margins

  • Treasury function of a bank **

 Non-interest income

  • Types of fees and commissions: retail bank fees, asset management, bancassurance, investment banking fees, credit card acquiring fees, credit card interchange fees

  • Trading income: cash equities, equity derivatives, fixed income, currencies and commodities

Bank expenses

  • Cost/income ratio defined

  • Drivers of bank efficiency

  • Cost savings from mergers and acquisitions – historical overview

  • Branch networks

  • Tech spending

  • Investment bank compensation **



  •  Loan accounting (IFRS9) **

  • Key asset quality ratios: NPL ratio, coverage, loan loss rate, Texas ratio

  • Credit cycle – historical overview

  • Normalised loan losses

  • Lead indicators of credit deterioration

  • Regulatory perspectives on NPLs **

  • Market risk **

  • Operational risk **

  • Litigation risk **



  •  Funding structure of a bank

  • Nature of deposit funding

  • Bank runs

  • Loan/deposit ratio

  • Types of wholesale funding

  • Risks of wholesale funding

  • Specialty finance company funding

  • Central bank backstops **

  • Liquidity risk

  • Funding and liquidity regulation **

  • Why banks fail



  • Types of capital — common equity tier 1, addition tier 1, tier 2

  • Capital ratios: core tier 1 ratio, tier 1 ratio, total capital ratio, leverage ratio

  • Minimal capital requirements

  • Defining risk-weighted assets **

  • Developing capital regulation (from Basel I to Basel IV)

  • European SREP process **

  • US CCAR process **



  •  Why bank valuation is different from non-bank valuation

  • Constraints a bank CEO/CFO faces

  • Tangible book value per share defined

  • Mark to market of asset and liability values

  • Stress testing book value

  • Relationship between P/BV and ROE

  • Bank cost of capital

  • Different measures of earnings – pre-provision profit, adjusted profit etc.

  • Adjusting valuation for leverage

  • Historic assessment of bank valuations in Europe and US

  • Valuing growth

  • Free-cashflow based approach to valuation



  •  Changing regulatory landscape

  • Threat of lower for longer interest rates

  • Disruption from fintech and Big Tech

  • Prospects for consolidation

    Note: ** represent optional deeper-dive components

If you are interested in the course and would like to discuss your requirements, please email us at and Marc will be pleased to follow-up.