Introduction
The Treasury department is a crucial segment of any bank or financial organization, responsible for managing risks such as liquidity. Treasury Risk Managers play a pivotal role in mitigating these risks and ensuring compliance with IFRS standards. Among various risks, liquidity is of utmost importance for the survival of financial institutions. Other risks, such as interest rate fluctuations, operational risks, and market issues, must be monitored, measured, and controlled to enhance profitability.
Learning Objectives
By the end of this course by Xcelerate Training Institute, participants will be able to:
- Assess and analyze all possible risks from balance sheets in the form of liabilities and assets.
- Utilize tools efficiently to measure potential risks according to market scenarios.
- Understand and apply risk management strategies and instruments at the appropriate times.
- Comprehend liquidity concepts, liquidity buffers, their management, and liquidity risks beyond deposits and basic loans.
- Use liquidity risk metrics to evaluate the scope of liquidity risk in banks.
- Formulate and evaluate stress tests.
- Understand and assess liquidity risk controls along with lending outcomes.
- Develop and evaluate funding policies for trading books and banks.
- Appreciate the role and governance structure of the Asset Liability Committee (ALCO) in banks.
- Understand internal funds transfer pricing and analyze the application of specific models to different types of institutions.
Training Methodology
Courses by Xcelerate Training Institute are tailored to professionals’ backgrounds. The content is thoroughly reviewed before each session. Training is delivered by experienced professionals from relevant fields, with active participation through projects, group activities, role-plays, situational analysis, case studies, and experiential learning. This approach, known as the Do–Review–Learn–Apply Model, maximizes learning.
Benefits for Your Organization
Organizations will benefit from:
- Enhanced informed decision-making processes.
- Proper management of treasury risks to increase profitability.
- Formulation of exceptional funding policies tailored to ongoing situations.
- A treasury department managed by well-trained professionals.
- Accurate documentation of risks and solutions.
- Revamped financial culture with practiced skills and knowledge.
- Compliance with IFRS standards in treasury documentation.
- Management of risks such as commodity prices, currency, capital, interest rates, and liquidity by skilled professionals.
- Effective risk management strategies to handle market conditions.
Benefits for You
Participants will benefit by:
- Developing and refining skills and knowledge useful for treasury professionals.
- Understanding and applying advanced techniques and tools in treasury risk management.
- Gaining the ability to use software and models for better financial decisions.
- Playing a crucial role in achieving the organization’s primary goals with effective strategies.
- Being considered essential during financial decision-making processes.
- Collaborating effectively with other professionals for forecasting, budgeting, planning, investment analysis, and financial issues.
Target Audience
This course is ideal for:
- Treasury Risk Managers who analyze and formulate strategies to mitigate risks.
- Risk and Treasury Associates providing consultancy in Treasury Risk Management.
- Senior Management in the treasury department making decisions to minimize risks.
- Treasury Risk Analysts involved in documentation.
- Finance managers and professionals with responsibilities related to finance.
- Professionals seeking new skills in treasury risk management.
- On-job professionals in Treasury and Risk management.
- Decision-makers in finance.
- Professionals aiming to pursue a career in Treasury and Risk Management.
Course Outline
Introduction to Treasury Management
- Objectives of Treasury Management
Treasury Management Functions
- Forecasting Cash
- Management of Capital
- Cash and Investment Management
- Managing Risks and Formulating Strategies
- Fundraising
- Granting Credit
- Other Functions
Treasury Department Structure and Types
- Centralized/Decentralized Treasury Departments
- Front Office Structure
- Middle Office Structure
- Back Office Structure
In-Depth Analysis of Liquidity and Cash Management
- Role of Cash Forecasts
- Preparing Cash Forecasts
- Investing Cash Surpluses for Maximizing Return
- Short-term Finance
- Determining Optimum Level of Working Capital Management
- Group and International Cash Management
- Processing and Controlling Cash Budgets
Capital and Finance Management
- Optimizing Capital Structure to Reduce Cost of Capital (WACC)
- Capital Asset Pricing Model (CAPM)
- Evaluating Capital Investment (Payback, IRR, NPV)
- Internal and External Capital Rationing
- Financial Strategic Objectives (Growth, M&A, Consolidation, Diversification, Joint Ventures)
- Long-term Finance (Buyer & Supplier Debit vs. Public & Private Equity)
Identifying Risks
- External Risks
- Internal Risks
- Non-financial Risks
- Financial Risks
Measurement of Risks
- Value at Risk (VaR)
- Probability
- Standard Deviation
- Variance
- Volatility
Determining Risk Management Strategies
- Probability
- Assessing Impacts
Risk Management Strategies
- The 4 T’s Strategy (Tolerate, Terminate, Transfer, and Treat)
- Internal Audit
- Internal Controls
- Credit and Counterparty Risk Management
Loan Documentation
- Typical Loan Transaction Structure
- Issues and Solutions before Signing Contracts
- Event and Covenants (default, cross-default, financial covenants)
- Quasi Security, Security, and Their Guarantees
Commodity, Interest Rate, and Currency
- Forward Contracts
- Forward Rate Agreements
- American and European Options
- Futures (Margin Payments, Market Correlation)
- Swaps: Interest Rate and Currency Risks and Advantages
- Internal Tactics for Foreign Currency Accounts
- Borrowing Foreign Currency