BFF2401 : Commercial Banking and Finance Individual Assignment

Question

Question 1 

1A. Find annual (yearly) bank data to calculate the annual Return on Assets (ROA) and Return on Equity (ROE) for each of the top four Australian banks for the 2018-2024 period. Generate two (2) line graphs (one for ROA, one for ROE). (8 marks)

1B. Conduct peer and trend analyses based on each of your graphs. Your analyses must be supported with specific real-life evidence, such as examples of these banks’ investment approaches, risk and cost controls, funding/financing strategies, and other relevant market-wide factors. (10 marks)

NOTE: All tables of original dollar figures, formulas/workings and calculated percentages/ratios, as well as two (2) line graphs, must be presented in Part 1A. Your graphs must be fully labelled and professionally formatted and displayed.

Question 2 

2A. Choose two (2) different measures of credit (default) risk directly associated with banks’ lending activities, and find annual (yearly) data to calculate these credit risk ratios for each of the top four Australian banks for the 2018-2024 period. Generate two (2) line graphs for the calculated credit risk ratios. (8 marks)

2B. Conduct peer and trend analyses based on each of your graphs. Your analyses must be supported with specific real-life evidence related to these banks’ credit risk management strategies. (10 marks)

NOTE: All tables of original dollar figures, formulas/workings and calculated percentages/ratios, as well as two (2) line graphs, must be presented in Part 2A. Your graphs must be fully labelled and professionally formatted and displayed.

Question 3

In light of the current economic slowdown, interest rate environment and ongoing regulatory developments, forecast how Australian banks’ profitability, funding structures and risk exposures will change in the next 12-24 months. Provide strong reasons for your forecast.

Introduction and Conclusion (4 marks): Approximately 300 words are recommended for introduction and conclusion together.

• Suggested data source for Questions 1 and 2: Banks’ annual reports and Basel III Pillar 3 regulatory disclosure reports published on their websites.
• Required format: 1.5-line spacing and 12-point font. Detailed and informative subheadings must be used to separate the three questions and different sections.
• Total marks: Question 1 (18 marks) + Question 2 (18 marks) + Question 3 (10 marks) + Introduction and Conclusion (4 marks) = 50 marks.
• Possible deductions: Referencing and/or formatting issues (deduction of up to 4 marks); Late penalty (deduction of 5% per calendar day late); Penalty for Turnitin percentage above 20% (depending on nature of similarity).

Assessment Requirements – Brief Summary

This assessment required students to analyse financial and risk performance of the top four Australian banks (2018–2024) and produce a scholarly report covering three main areas:

Key Requirements:

1. Question 1 – ROA & ROE Analysis (18 marks, ~600 words):

   • Collect annual bank data to calculate Return on Assets (ROA) and Return on Equity (ROE) for the top four banks.

   • Present calculations in tables, then generate two fully-labelled line graphs (ROA and ROE).

   • Conduct peer and trend analyses, supported by evidence such as investment strategies, risk/cost controls, and market-wide factors.

2. Question 2 – Credit Risk Analysis (18 marks, ~600 words):

   • Choose two credit risk measures associated with lending activities.

   • Calculate annual ratios for the top four banks and present them in tables and two line graphs.

   • Conduct peer and trend analyses supported by real-life examples of credit risk management strategies.

3. Question 3 – Forecasting Bank Performance (10 marks, ~500 words):

   • Forecast the next 12–24 months of banks’ profitability, funding structures, and risk exposures.

   • Justify forecasts with reference to economic slowdown, interest rate trends, and regulatory developments.

4. Introduction and Conclusion (4 marks, ~300 words):

   • Provide a concise introduction and summary integrating all analysis.

Additional Requirements:

• Use 1.5-line spacing, 12 pt font, and detailed subheadings.

• Tables, formulas, calculations, and graphs must be clearly presented.

• Adhere to referencing standards; deductions apply for late submission or similarity above 20%.

Assessment Approach – Step by Step

The Academic Mentor guided the student through a systematic process to ensure all requirements were addressed effectively:

Step 1: Understanding the Task

• The mentor reviewed the marking criteria and instructions with the student.

• Emphasis was placed on distinguishing between data collection, calculation, graphical presentation, and analytical interpretation.

Step 2: Data Collection and Preparation

• The student was guided to access banks’ annual reports and Basel III Pillar 3 disclosures.

• Raw data for ROA, ROE, and credit risk ratios were collected for 2018–2024.

• Data were organised in Excel tables, including formulas and intermediate calculations.

Step 3: Calculations and Graphical Presentation

• The mentor assisted the student in calculating ROA, ROE, and credit risk ratios accurately.

• Two line graphs per question were generated with proper labelling, axis titles, and professional formatting.

• Graphs were reviewed to ensure clarity and alignment with reporting standards.

Step 4: Peer and Trend Analyses

• The student was coached to interpret the graphs critically:

  • Compare banks’ performance and credit risk trends over time.

  • Include real-life examples such as investment approaches, risk management strategies, and funding structures.

• Mentor encouraged linking observations to broader market and regulatory factors.

Step 5: Forecasting Future Performance

• The student analysed macroeconomic trends, interest rates, and regulatory changes to forecast bank profitability and risk exposure.

• Mentor emphasized logical reasoning and evidence-backed predictions rather than speculation.

Step 6: Structuring and Writing the Essay

• Introduction and conclusion were drafted to contextualize the analysis and summarize findings.

• Subheadings were applied to separate questions and sections, ensuring clarity and flow.

• Drafts were refined for word count, formatting, and academic style.

Outcome Achieved

• The student produced a well-structured, evidence-based report fulfilling all assessment criteria.

• Accurate calculations, professional graphs, and insightful trend/peer analyses demonstrated strong applied knowledge.

• Forecasts were logically justified, reflecting understanding of economic and regulatory influences.

Learning Objectives Covered:

1. Understanding key financial performance metrics (ROA, ROE) and credit risk measures.

2. Analysing trends and benchmarking across peer institutions.

3. Linking financial ratios to banks’ strategic and operational practices.

4. Forecasting and evaluating banking performance under economic uncertainty.

5. Enhancing academic research, data presentation, and professional writing skills.

In summary:
Through guided mentorship, the student successfully integrated quantitative analysis, graphical presentation, real-world evidence, and critical forecasting into a cohesive, scholarly report, fully meeting the assessment’s learning objectives.

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