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2025/2026  BA-BHAAV2503U  Commercial Bank Management

English Title
Commercial Bank Management

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 150
Study board
Study Board of General Management
Course coordinator
  • Rama Seth - Department of Finance (FI)
Main academic disciplines
  • Managerial economics
  • Finance
  • Economics
Teaching methods
  • Blended learning
Last updated on 30-01-2025

Relevant links
Learning objectives
To achieve the grade 12, students should meet the following learning objectives.
  • Identify, explain, discuss and apply the core concepts, models and methods
  • Recognize the role of commercial banks in the financial intermediation of capital in an economy
  • Identify and discuss the role of the central bank in managing monetary policy, ensuring the safety and soundness of the banking system
  • Learn the various assets and liabilities of modern-day commercial banks including off-balance innovations such as mortgage-backed securities and loan guarantees
  • Classify and explain the various risks faced by commercial banks including credit, interest rate risk, and liquidity risk.
  • Define and discuss value creation in banks and the measures used to analyze bank safety and performance
Course prerequisites
The course builds on concepts from Corporate Finance and Accounting. Students are expected to have a good background in basic financial principles and tools including time value of money, risk-return portfolio optimization, CAPM, capital structure theory, and applications. Basic knowledge of financial statements and statistical analysis are also desirable but not mandatory.
Prerequisites for registering for the exam (activities during the teaching period)
Number of compulsory activities which must be approved (see section 13 of the Programme Regulations): 2
Compulsory home assignments
At least 2 out of 4 assignments must be assessed as 'passed'
Examination
Commercial Bank Management:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 3 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Winter
Aids Open book: all written and electronic aids, including internet access
Read more here about which exam aids the students are allowed to bring and will be given access to : Exam aids and IT application package
Make-up exam/re-exam
Same examination form as the ordinary exam
The number of registered candidates for the make-up examination/re-take examination may warrant that it most appropriately be held as an oral examination. The programme office will inform the students if the make-up examination/re-take examination instead is held as an oral examination including a second examiner or external examiner.
The exam will consist of 2 parts. One part will be based on the textbook and lectures. For the other part, students will have to log in to the simulation ProBanker, run the simulation, download the Excel file and answer questions based on their simulations results.
Description of the exam procedure

The exam will consist of 2 parts. One part will be based on the textbook and lectures. For the other part, students will have to log in to the simulation ProBanker, run the simulation, download the Excel file and answer questions based on their simulations results.
Course content, structure and pedagogical approach

This course covers commercial banks' role in delivering financial services in an economy.  The first section covers assets, liabilities, off-balance sheet items, and the measurement of performances to provide an overview of the core functions of a commercial bank. The next section focuses on the various risks commercial banks face, including credit risk, interest rate risk liquidity risk, and the approaches to manage them in a highly competitive and regulated environment. The role of the central bank and the adoption of Basel rules on managing the risks are studied in detail. The course will also cover the emergence of digital banking and the role of cryptocurrencies, including the role of bitcoin and blockchain technology. The course will include a discussion on the Principles for Responsible Banking, and the role of banks in the transformation to a green economy.  Finally, students will be introduced to Fintech.
Research-based teaching
CBS’ programmes and teaching are research-based. The following types of research-based knowledge and research-like activities are included in this course:
Research-based knowledge
  • Classic and basic theory
  • Teacher’s own research
  • Methodology
  • Models
Research-like activities
  • Analysis
  • Discussion, critical reflection, modelling
  • Peer review including Peer-to-peer
Description of the teaching methods
The course will consist of lectures, exercises and a simulation. A unique component of this course is the use of ProBanker, a banking simulation, throughout the semester. ProBanker is a competitive simulation game specifically designed to enhance a student’s understanding of the financial aspects of managing a financial institution. It is firmly grounded in sound financial and microeconomic principles and the simulated environment, although complex and realistic, is sufficiently stylized to be readily understood.

Students are forced to use balance sheet and income information about their own and their competitors’ firms to infer the magnitude of their prior decisions and competitive responses, provide regular quarterly inputs as a team, and learn by experience the nuances in term structure forecasting, interest rate risk measurement, liquidity management, and balance sheet management.

The success of the course hinges on active participation by the students, by asking questions during the lectures, and especially in the lectures and bank simulation runs.
Feedback during the teaching period
Solutions to assignments provided
Student workload
Reading and preparation 167 hours
teaching 36 hours
examination 3 hours
Expected literature

Principles of Bank Management: by Anoop Rai and Rama Seth.

ProBanker Simulation by Flannery, Flood, and Rai. This simulation game will be activated during the first class.
Last updated on 30-01-2025