Fundamentals of

Bank Management

An Introductory Workshop on
Bank Management

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 SimArch

SimArch is a premium provider of customised learning solutions within the

Financial Services Sector. We assist banks, financial institutions, universities
and business schools in the enhancement of the skills and core competencies
of their employees and students.

Our learning interventions and workshops are designed to accelerate

learning, knowledge transfer and the change of behaviour. In order to ensure
a powerful learning experience and a successful delivery, we work with all
levels of business leaders and management within an organisation.

The founding principle of SimArch is based on the conception that human

resource development has to integrate seamlessly with the vision and overall
strategy of the organisation. Being a customer-focused organisation, we strive
at all times to understand the business of our clients completely and to
develop and maintain long-term relationships with every client.

Since 1999 SimArch has been a full-service education organisation,

specializing in the creation of timely solutions that assist our clients with the
improvement of their business performance and competitive position.

 SimArch NV
Interleuvenlaan 62
3001 Heverlee
BELGIUM
Tel +32 16 39 4732
Fax +32 16 39 4731
info@simarch.com
www.simarch.com

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 Table of Contents

INTRODUCTION ------------------------------------------------------------------------------ 4
OVERVIEW OF THE W ORKSHOP ------------------------------------------------------------- 4

LEARNING OBJECTIVES OF THE WORKSHOP ---------------------------------- 5

PARTICIPANT PROFILE ------------------------------------------------------------------- 5

THE SIMULATION PROCESS AND APPLIED METHODOLOGY------------- 6

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Introduction

Overview of the Workshop

The Fundamentals of Bank Management Workshop designed by SimArch NV consists

of a combination of two parts: a conceptual and a practical part. The practical and
interactive nature of this workshop ensures a valuable learning experience for all
participants.

The conceptual part includes discussions on a number of fundamental bank

management areas affecting financial and general management in a full-services
bank. The following key topics are discussed:
 The Financial Services Sector
 Bank Profitability
 Major Risks in Banking
 Liquidity Management
 Interest Rate Risk Management
 Macroeconomic Indicators
 Capital Management
Case studies and exercises are used to provide insights into these topics.

The conceptual and practical parts are aligned. During the practical part participants get
the opportunity to put what has been discussed in practice. The practical part includes
the use of the E-Learning Bank Management Simulation called FirstB@nk. The
FirstB@nk simulation program represents the banking world of today. FirstB@nk is an E-
Learning Bank Management Simulation Program representing a typical full-services bank.
A realistic banking environment is created wherein participants experience the
consequences of their management decisions during a given timeframe. The operations of
several banks competing against each other, for the available loans, deposits and other
business activities in the marketplace, provides FirstB@nk with its dynamic character.

Participants get the opportunity in this workshop to run their own virtual bank.
Participants are divided into ‘Management Teams’ comprising of four members
each. Each management team is responsible for the management of their virtual
bank. The management teams have to manage the bank for up to six quarters. During
each quarter a number of key decisions have to be made.
The following are some of the key decisions to be made: Decide on a mission
statement for their bank, decide on the pricing of loans and deposits, planning liquidity
and capital, investing in a branch network and information technology.
The participating banks compete against one another in a marketplace determined by
varying economic conditions. Decision input is done via the Internet and after
processing of all decisions have been completed, results are available for all teams.
Between decisions feedback is provided by the ‘Central Bank’ on the performance of
the industry and then participants are in a position to make decisions for the next
quarter.

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On the final day of the workshop the learning experience is further enhanced by a
presentation from each management team to their Supervisory Board on the
performance of the bank overall.

Learning Objectives of the Workshop

By the end of this workshop, you will

 Have a clear view of the different activities that are typically performed in a
bank
 Have an overview of how different areas of the business interact to produce
overall business and financial performance
 Have insight with regard to the major risks faced by banks today
 Have an understanding of the current key change drivers within the financial
services industry
 Be more familiar with the different types of financial statements that reflect
profitability as well as the key performance measure used in banking

Every participant working with the simulation program has the opportunity to experience
what it is like to manage a full-service bank today. Participants are exposed to the following
during working with the program:

 The key management decisions taken in banking today

 The major risks faced by financial institutions today
 The key change drivers within the financial services industry today

Participant Profile
This workshop is ideally suited:

 If you are newly appointed (with up to three years banking experience)

 If you are a young executive who needs to expand his/her overall
understanding of the management of a bank
 If you are a non-banking professional, active in the financial services sector
and you need to become familiar with the complexities of management in a
bank

Level:
 Low Middle Management
 Middle Management

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The Simulation Process and Applied
Methodology

The FirstB@nk simulation represents a highly competitive banking industry. The banking
industry depicts, as close to reality as possible, the typical banking and economic
environment within a country.

The industry comprise of a number of management teams (banks), competing against

each other. Each team manages a bank over six quarters. In making their decisions for
each quarter, banks compete against each other in the market place for new business.

Competing banks submit their decisions via the Simulation Portal of SimArch. Once all
decisions have been received from the various management teams, the facilitator will
process and produces the output (results) for the quarter.

The results of each bank as well as certain industry-specific information are available to the
various management teams. Industry-specific information is available to all banks, whereas
bank specific details are only accessible by each individual bank. The following input and
information form the basis for the preparation of a new set of decisions for each quarter:

 The latest available Financial Statements (output)

 The latest available Industry Report

 The results of past quarters

 The projections for the next quarter (Balance Sheet and Income Statement)

 The analysis and insights of the management team

 Central Bank Releases available from time to time

 Economic Overview by the Central Bank