DE LA SALLE UNIVERSITY
FINANCIAL MANAGEMENT DEPARTMENT
College of Business and Economics
Course Syllabus
Course Code / Title:
Prerequisites:
Prerequisite to:
Type of Course:
Faculty:
Term / Time / Room:
FINBANK (BANK MANAGEMENT)
FINAMA1/FINMAN1 and FINAMA2/FINMAN2
FINTREA, FINSPEC, FINARES, FINSTRA, FINRISK
FINACMA, FINCOBO and FINTRUS
Major Course
Dr. Ricarte Q. Pinlac
Term 2; SY 2010-11; 19:40-21:10; L110
COURSE DESCRIPTION:
FINBANK (Bank Management), a major course, firmly equips the students with the necessary
concepts, principles, and techniques used in sourcing and allocating bank funds that would
maximize corporate/shareholders’ wealth while maintaining adequate liquidity consistent with
acceptable levels of risks. FINBANK familiarizes students to understand what a bank is, what
services they offer, what motivate their behavior, their sizes and market shares, the economic
and financial forces that have changed the way banks operate, the main sources and uses of
funds, and profitability. It is the objective of the course to challenge students, as prospect
bankers, to be able to confront head-on the strategic issues of risk, regulation, technology,
competition and globalization that face and shape all the past, present and future of the banking
industry in its entirety.
COURSE OBJECTIVES / VALUES:
A. Cognitive (Knowledge)
1. The role of banks as financial intermediaries and their influence in the Philippine financial
system – their organization, functions and operations as financial institutions;
2. How the Central Bank and monetary policy changes impact on the bank’s funding,
earnings and risks as basis for decision-making;
3. The major components and analysis of bank financial statements;
4. The necessary financial skills for thoroughly evaluating a bank’s risks, returns, and
overall performance;
5. The major financial and non-financial risks that bank leaders normally face and how to
effectively manage these banking risks;
6. The nature of sources of bank funds, both deposits and non-deposits, and the principles
governing its management thus ensuring bank liquidity, stability and profitability;
7. How banks manage the allocation of bank funds among primary and secondary reserves,
loans and investments, to produce sufficient liquidity and maximized earnings;
8. The fundamentals and structure of bank credit risk management;
9. The international banking services and activities and the problems and challenges facing
international banking operations; and,
10. The asset-liability management techniques and strategies of banks to maximize net
interest margins.
B. Cognitive (Skills)
1. Being able to have a sense in linking the dynamics of commercial bank management visà-vis against the actual, industry practice;
2. Analyzing bank case studies and simulating real-life bank situations; and,
3. The preparation of a final paper and conducting its presentation regarding some strategic
issues specifically facing the Philippine banking industry.
C. Affective / Value Aims
1. Maximize shareholders’ wealth with due respect to the rights of others;
2. Appreciate commercial bank management either as future bank leaders and/or as
banking clients and investors;
3. Genuine bank service for the upliftment of industry and quality of life; and,
4. Imbue the Lasallian core values of religio, mores and cultura when engaging in various
bank dealings.
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COURSE OUTLINE AND PROPOSED SCHEDULE
WEEK
1
2
3
4
5
6
7
8
9
10
11
12
13
TOPICS
REFERENCES
Financial System and Financial Instruments
Chap. 1 (AKB); Chap. 15 (LE);
The Financial System (functions, components, and
regulations); Financial intermediaries (kinds)/intermediation; Chap. 12 (LE); Website
Financial Markets (functions, structure, and benefits);
Financial Instruments
An Overview of Banking
Banking (nature, function, and organization – location and
capitalization, structure/ set-up). Management of bank
Chap. 2 (AKB); Chap. 9 (LE);
capital – cost of common/preferred stocks, retained
Chap. 2 (RH); Website
earnings, WACC, equity and risk; Bank failures.
Case Study: The Barings failure – supervision failure
The Concept of Money
Relationship of money and economic activity; Barter
System; Purchasing Power; Money (measurement,
evolution, functions, kinds/characteristics, forms, properties) Chap. 12 (AKB); Chaps. 15
(RH); Website
and Money Supply/Multiplier; The Reserve Requirement;
The Monetary Standard; Evolution of the Phil. Currency.
Interest and Interest Rates
Interest Rates (types, levels); Calculating interest rates;
Nominal vs. Real interest rates; Nominal vs. Current yield; Chap. 5 (AKB); Website
The Loanable Funds Theory (demand and supply of
loanable funds); Interest (market rate and term structure).
Bank’s Role, Functions, and Classifications
Bank’s role and functions (development); How banks create
money?; Expansion of the banking system; Loan and Money Chap. 1 (AKB); Chap. 15 (LE);
Chap. 12 (LE); Website
expansion; Currency and TD complications; Bank’s
Classifications; Aspects of banking;
Commercial Banking
Commercial Banking (authority, functions); Sources of bank
Chap. 8 (AKB); Chap. 11 (LE);
funds; Deposits (types and characteristics) and insurance
Website
(terms and concepts, types); Computing reserves; Drafts
(checks, endorsements); Duties of a bank personnel; Loans;
Trade transactions
The Phil. Banking Sector
The Phil. Banking System (Structure); The Phil. Financial
System (Concentration of Capital); Historical background;
Evolution of the Phil. Banking System (Liberalizing banking Chap. 9 (AKB); Chap. 16 (RH);
Website
and finance, foreign dominance); Foreign Banks; Banking
Laws of the Phils.
Mid-terms Exam
Monetary Theory and Control of Banking
Monetary Theory (Quantity theory of money, Income theory,
Chap. 2 (AKB); Chap. 9 (LE);
Transaction theory, and Cash balance theory); Monetary
Policy (Monetary base and open market operation, reserve Chap. 2 (RH); Website
requirement, discount window lending; Regulation/ control of
banking (regulatory expectation); Bank
supervision/examination; The Basel Accord.
Central Banking
Chap. 12 (AKB); Chap. 15
Central Banking (objectives, functions); The Federal
(RH); Website
Reserve System; Central Banking in the Phils. (BSP,
organization, management, objectives, and responsibilities)
Bank Loan and Credit Function
Credit (key concepts, users of credit, the 5 Cs); Bank loan
Chap. 8 (AKB); Chap. 11 (LE);
(key concepts, types); Internal regulations; The lending
Website
process; Repos and RRPs; Forms of collateral; Related
Laws
Bank Loans and Investment Computation
Simple and compounded interests, and final amount (loan Chap. 9 (AKB); Chap. 16 (RH);
Website
price); Calculation of basic elements in loan pricing;
Effective and ordinary interest; Compensating balance
Risk Management, Asset Liability Management, and
Gap/Duration Analysis
Chap.1, 5, and 11 (AKB);
Risk management (definition, key concepts); Types of risks; Chaps. 10 and 12 and Chaps.
Asset-Liability management (functions, techniques); Asset- 11 and 15 (LE); Website
side management theories; Asset acquisition and expected
rates of return; Liquidity and interest rate risk management;
Gap/Duration analysis
Bank FS and BSP-Related Provisions
Chap.12 (AKB); Chap. 8 (LE);
2
HRS.
1.5
3
3
3
3
3
3
1.5
3
3
3
3
3
14
Compliance with IAS (FS-related regulations); Report of
Condition (B/S), Allowance for Probable Losses; Report of
Income; Capital Accounts; Expansion of Off-B/S Items
Evaluating Bank Performance
Financial Statements; Evaluating a bank performance
(framework); Ratios (types, calculations); Internal
performance evaluation.
Finals Exam
TOTAL HOURS
Website
1.5
Chap. 3 and 14 (AKB); Chaps.
5-6 (RH); Website
1.5
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TEACHING METHODOLOGIES:
1. Lectures and class discussions assisted by the use of visual aids. There shall be section
quizzes/self-tests after discussions/lectures.
2. Chapter readings from the main reference texts supplemented by reviews of related literature
and related journal articles to hone it students’ knowledge of research methods in
international finance.
3. Take-home exercises for reinforcement of the technical aspects of the different course topics.
4. Term paper on a chosen topic of bank organization/management (including risks
management).
5. A comprehensive mid-terms and final exam to test a student’s overall understanding of the
course contents.
COURSE REQUIREMENTS:
1. Quizzes and Examinations
Quizzes and examinations would comprise the following: (a) short quizzes (i.e., “self-tests”) and
(b) long exams (midterm and finals exams). If a student misses any of the self-test (either he/she
will take a special quiz to compensate or an instruction will be issued in class). It is mandatory for
a student to take the Midterm and Final exam, except otherwise instructed by the professor and
agreed in the class. These long exams should be taken either on the assigned date or on an
announced date.
2. Reports (Oral and Written)
The students shall be tasked to report (in oral and/or written form), by group or individual, upon
the instruction of the professor. Topics shall then be assigned (including date of oral and/or
written report). The report shall be graded according to what will be agreed upon in the
classroom.
A term paper will highlight the knowledge/understanding of students to the lectures/discussions. It
has a total of 100% and will be evaluated on the basis of the following:
Comprehensiveness of Coverage
60%
Flow of discussion
40%
Relevance/Significance to the course
40%
3. Attendance and Class Participation
There will be corresponding grades for attendance and class participation, including recitation
and participation in class activities.
GRADING SYSTEM:
The course grades shall be assigned using the following weights:
1st Half
2nd Half
1. Mid-term Exam
40%
1. Final Exam
40%
2. Quizzes/Self-Test
20%
2. Quizzes/Self-Tests
20%
3. Reports/Reports Part.
20%
3. Reports/Reports Part.
20%
4. Recitation/Class Part.
10%
4. Recitation/Class Part.
10%
5. Attendance/Extra curricular
10%
5. Attendance/Extra Curricular
10%
Total
100%
Total
3
100%
Final Grade = (1st Half + 2nd Half) ÷ 2
CONSULTATION:
After class or on appointment basis.
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REQUIRED TEXT MATERIAL:
1. Avram, Katherine, Beal Diana and Lambert. Rod (2007). Commercial Banking: The
Management of Risk. John Wiley & Sons Australia, Ltd.
2. CBSI Editorial Staff. (2008) Banking Laws of the Philippines. Central Book Supply, Inc.
3. Leuterio, Mercedes M. and Estepa, Consuelo B. (2004). Banking: Theory and Practice –
Revised Edition. Pasig: Anvil Publishing, Inc.
4. Rose, Peter S. and Hudgins, Sylvia C. (2008). Bank Management and Financial Services –
7th Edition. Singapore: Irwin/McGraw-Hill.
REFERENCES:

Books and Philippine Banking Laws
1.
Alminar-Mutya, R. (2002). Introduction to Philippine Money, Credit and Banking. Pasig:
National Bookstore.
2. Bangko Sentral ng Pilipinas (2003). Money and Banking in the Philippines: Perspectives from
Bangko Sentral ng Pilipinas. Manila: BSP.
3. Grinblatt, M. and Titman, S. (2002). Financial Markets and Corporate Strategy – Second
Edition. L.A.: McGraw-Hill/Irwin.
4. Heffernan, S. (2005). Modern Banking. London: Wiley/Cass Business School.
5. Lipscombe, G. and Pond, K. (2002). The Business of Banking: An Introduction to the Modern
Financial Services Industry – Fourth Edition. The Chartered Institute of Bankers.
6. Platz, T. and Fitch, T. (2001). Business Banking – Second Edition. Barron’s Educational
Series, Inc.
7. Rao, K.N. (eds) (2005). US Banking: Strategic Issues. India: ICFAI University Press.
8. Republic Act No. 7653, ‘The New Central Bank Act.’
9. Republic Act No. 8791, ‘The General Banking Law of 2000.’
10. Republic Act Nos. 9160 and 9194 (as amended), ‘The Anti-Money Laundering Act of 2001.’
11. Rose, P.S. (2002). Commercial Bank Management – Fifth Edition. Irwin/McGraw-Hill.
12. Rose, P.S. and Hudgins, S.C. (2005). Bank Management and Financial Services – Sixth
Edition. Singapore: Irwin/McGraw-Hill.

1.
Asian Wall Street Journal, BizNewsAsia, Business World, CFO, Forbes Asia, Fortune,
Newsweek, Philippine Graphic, Time, amongst others.

1.
2.
3.
4.
5.
Newspaper and Magazine Articles:
Journals
Journal of Banking and Finance
Journal of Finance
Journal of Financial Economics
Journal of Financial Research
Journal of Money, Credit and Banking

Online References:
1. ALM Professional: www.ALMprofessional.com
2. American Bankers Association: www.aba.com
3. Bangko Sentral ng Pilipinas: www.bsp.gov.ph
4. Bank for International Settlements: www.bis.org
5. Banker’s Association of the Philippines: www.bap.org.ph
6. EBSCO Research Database [DLSU Library – Online]
7. The Federal Reserve: www.federalreserve.gov
8. Global Association of Risk Professionals: www.garp.com
9. Philippine Deposit Insurance Corporation: www.pdic.gov.ph
10. Proquest Digital Dissertations [DLSU Library – Online]
11. Rural Bankers Association of the Philippines: www.rbap.org.ph
12. Social Science Research Network: www.ssrn.com
13. Trust Officers Association of the Philippines: www.toap.org.ph
14. World Bank: www.worldbank.org
(Note: Other websites, including articles/journals, will be given during class discussions.)
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