The Bank Credit Analysis Handbook - Golin & Delhaise

[Valueguy134]

[amazonsearch]The Bank Credit Analysis Handbook[/amazonsearch]

 

I was recommended this book and I am about 50% through it (its a big book).  If you ever wanted to know how banks work and how to analyze banks, this is your ticket.  I can confidently say that this book is worth far more than what I paid for in terms of the information it provides and how easy it is to read.

 

Enjoy!

[Morgan]

What specifically did you like about the book? It's $135. I understand there may very well be excellent information in it, but that is pretty expensive. Do you have any more details about the books you'd like to share?

 

I checked the index on Amazon, and it looks like it does cover a large amount of material. From analysis, to regulatory regimes, to a briefing of crises, etc. It looks quite expansive. How does it read? Is it dry like a college textbook? Or better than that?

 

It does look very interesting. Thank you for sharing.

[Valueguy134]

I only had a very basic knowledge of banking and other FI's, just to give you an idea where I am coming from.  I've recently completed the Asset quality chapter so I can only tell you what i think about the book to that point.

 

The authors do a great job of explaining each chapter's headlines.  They start off with credit analysis and how banks works.  In the how banks work chapter he goes over all the products a bank offers (from loans to derivatives, to investment banking, deposits to you name it they explain it).  He also explains what each product is and why a bank offers it and who typically uses it.  He then proceeds to discuss the different groups within banks and how they work together (treasury, loans, investment banking etc...).

 

The income statement and balance sheet chapters are self explanatory, the authors explain each line item and how they differ from non-financial companies.  They go on to explain why a banks cash flow statement isn't as important as the other 2 sheets.

 

In the earnings quality and Asset quality chapters, he takes an extensive look at the quantitative and qualitative factors and the impacts they have on the banks (he also provides rules of thumbs).  He further discusses the accounting for banks and how everything links together.  I dog eared a lot and highlighted a lot in these chapters.  There is also discussions on tricks banks play to make them look better and how to identify them.  So far the focus has been a global view of banking, but he draws many comparisons between the US and the rest of the world.

 

The read is pretty good, it takes me a bit longer than usual, but mostly because I am absorbing the information.  The book is a text book but reads far better than something from University, as the author was a credit analyst.

 

Either way, I met a fund manager I follow who was in the navy and then fell into equity research for FIs.  I had asked him for a book and he pulled this one off his shelf and said its what he used to learn.

 

Hope this helps.  The book is expensive, I took the chance with buying it and so far I have no regrets.

[oddballstocks]

For those who are cheap but want a comprehensive overview of banking check out the regulator's handbook on the OCC website.  There are a collection of maybe 25-30 PDF's that make up the body of work regulators use when evaluating a bank.  From the description of this book it sounds like they cover the same material.  I recently finished reading the capital handbook, it's about 20 pages of information describing different types of capital and how to grade it.  Then maybe 10-15 pages of checklists for how a regulator should evaluate capital.

 

The handbooks cover almost all types of banking, from private equity and LBO's to thrift lending.

 

Here's the website: http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/index-comptrollers-handbook.html

[Valueguy134]

I've been diving more and more into industry books (primers).  Just wondering if I should create a thread with a list of the books I have been going through in-case someone wants to broaden their knowledge.

 

What do you guys think?

[Morgan]

Wow thank you for the great response Valueguy134 and for the OCC info Oddball. I'll check out the OCC stuff first, but add the book you recommended to my list. Some day I will get it!

 

I'm interested in the list. It doesn't need to be anything special. In this thread is fine I would assume.