Tutorial:
Business Academy
Topic:
Financial Market and Banks
Prepared by:
Ing. Ingrid Ilčíková
Projekt Anglicky v odborných předmětech, CZ.1.07/1.3.09/04.0002
je spolufinancován Evropským sociálním fondem a státním rozpočtem České republiky.
BANKING TRANSACTIONS
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Self service offered by the bank, usually provided for
remuneration
active – the bank acts as a lender; credit banking
products
passive – the bank is in the debtor´s position; liabilities,
deposit banking products occur
neutral – the bank is neither the creditor nor the debtor;
it provides guarantee, issues a letter of credit; those are
reported under the balance
The bank provides loans, is in the position of a lender
 it has 2 objectives – profitability of the loan – here it earns; however the
interest must be acceptable for the clients
 return – hedging against possible risk of default
The contract must contain:
 the amount, frequency and duration of payments
 interest
 APR
 other costs and fees
APR – annual percentage rate of charge
 often given in a month period
 it is not just the interest on the loan, but also other costs associated with the
loan (counselling, selection, account management, changes, early
repayment,…)
loan
short-term
medium-term
and
long-term
special
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overdraft – a current account and the possibility to utilize a loan
under the credit framework
discount – purchasing bills before maturity; the bank deducts a
discount
acceptance – the bank does not provide money, accepts a foreign
bill, is the principal debtor, the client receives a quality payment
instrument – he must pay the bank a commission and also the
value of the bill of exchange before the maturity of the bill; an
offer for the best proven creditworthy clients
revolving – taking out a loan repeatedly; a new contract is not
necessary, however the previous loan must be repaid
lombard – a loan secured by a quality movable property
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mortgage – purpose loan to finance the aquisition of
real estate; guaranteed by pledge property
emission – connected with long-term securities
(corporate bonds)
consumer loans to citizens
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factoring – purchase of short-term receivables before
their maturity; the bank passes the risk of default
(Transfinance a. s. Prague); if banks are not willing to
lend money by „credit crunch“ – growing importance
of factoring
forfaiting – purchase of long-term receivables before
the date of maturity, the company pays the client the
amount of receivables deducted of a discount; it
assumes the risk of non-payment
Return on loan
The bank verifies
 the borrower / debtor
 credit rating
 business plan
 liquidity
Requires certain guarantees
 pledge of property
 pledge of chattel
 Pay attention to the conditions in the credit agreement, such as a commitment that
the client will maintain both the movable and immovable property , which
guarantees the loan, in good condition. Often the conditions are linked to a heavy
fine.
 guarantors
 immobilization of deposit (blocking the debtor´s deposit on the account in favour
of the creditor – in the case the loan is not repaid)
 assignment of receivables
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standard tool in banking and finance of the EU and the world
in the CR since 2002; there are the following credit registers:
Client Information Bank Register, the Central Credit Register, Nonbanking Client Information Register, negative SOLUS register
through a credit register the banks share information concerning
creditworthiness and credibility of their clients. Credit registry
speeds up the examination of applications for loans in individual
banks
in the credit register there are collected both positive and negative
credit information on all the clients of the member banks, who are in
the credit relationship with the bank, i.e. they have a loan, a credit
card and a released overdraft from it
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Give 3 ways of securing a mortgage loan.
Use a calculator (idnes.cz) to calculate the APR; you
want a consumer credit in the amount of CZK 100
thousand.
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Klínský, P. Ekonomika 3. Praha: FORTUNA, 2004. ISBN 807168-826-6.
Synek, M. a kol. Podniková ekonomika. Praha:
C.H.Beck,1999. ISBN 80-7179-228-4.
Švarcová, J. a kol. Ekonomie – stručný přehled. Zlín: CEED,
2008. ISBN 978-80-903433-7-5.
Available on: http://kalkulacky.idnes.cz/cr_spotrebitelskyuver-rpsn.php
Available on: http://www.uspory.cz/clanky/novinky/jak-nauverovy-registr