Principles of Banking

Course code: NHAE302

Instructor: Nguyễn Quang Hiếu
Faculty of Banking and Finance
Prerequisites: Introduction to Finance (TCHE302),
Money and Banking (TCHE303)
Instructor Contact

nguyenquanghieu@ftu.edu.vn

sites.google.com/a/ftu.edu.vn/hieu
or
web.ftu.edu.vn/hieu
You can download materials for the course
in this website
Assessment Criteria

• Engagement: 10%
• Projects/Mid term exam: 30%
• Final Exam: 60%
Engagement (10%)
• Attend class
• Engage
• Homework
Mid term assessment (30%)
Team project
Final exam(60%)
• Short answer questions
• Testable content: the whole course
Textbooks for reference
• Main text: Bank management and financial services
(Peter Rose, 2008)

• Bank management (Koch and MacDonald, 2010)

• Introduction to banking (Barbara Casu, Claudia
Girardone, Philip Molyneux, 2006)
• Principles of banking (American Bankers
Association)
Content (tentative)
• Overview
• Bank sources of funds
• Deposits
• Borrowed funds
• Bank uses of funds
• Lending
• Investments
• Managing bank capital
• Electronic banking
• Bank crisis 2007 - 2008
Overview of commercial
banks
Assigned readings:
Selectively from chapter 1 and 3
Financial flow
Commercial banks – what they do
• Traditional functions: take deposits, make loans
• Modern banks: offer a variety of services
• Payment
• Cash management
• Brokerage
• Insurance
• Underwriting
Commercial banks - types
• Universal bank versus Specialized bank
• Wholesale bank versus Retail bank

• Other ways to classify, for e.g by ownership

Organisational structure
• Board of directors and its committees
• Management team: CEO and associates
• Middle management and staff

• Example: Bank of America, Sacombank

Bank of America - BoD
Bank’s financial statements
• Balance sheet and Income statement
• Off balance sheet commitments
• Example: ACB audited FS 2012
Bank regulations
• Why?
• Depositors can not control what banks do with their
money
• Banking is a risky business
• Regulations:
• Capital requirements
• Reserve requirements
• Restriction on assets that banks can hold
• Constant supervision