HND个人及商业信贷.docx

HND个人及商业信贷.docx

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HND个人及商业信贷

SAMPLEINSTRUMENTOFASSESSMENT

CASESTUDY

ThisCaseStudyshouldbeprovidedtocandidates7-10dayspriortotheassessmentdate.AcopyoftheCaseStudyshouldbeprovidedtoeachcandidateonthedateoftheassessmentalongwiththequestions.

Allquestionsmustbeanswered.

YouarethemanageroftheWestEndbranchoftheBellBankplc.

YourbranchhasbeenaskedtotrainMichaelSamuels,anewGraduateManagementTrainee.MichaelhasadegreeinArchitecturefromGlasgowUniversitybuthasdecidedthatacareerinfinancialserviceswouldbemorechallenging.

Michaelhasnowbeenwithyoufortwoweeksandhasshownakeenwillingnesstolearn.Youhaveencouragedthiswillingnesstolearnbyallowinghimtositinduringsomeofyourinterviewswithyourcustomers.YouhavesuggestedthatMichaeltakenotesduringeachinterviewandthenusethesenotestoaskyouquestionsrelatingtoeachoftheinterviews.

Michaelhassatthroughfourinterviews.Someofthematerialfactsrelatingtoeachinterviewareprovidedbelow.

Interview1

JohnandMaryMcCuskerhavebeencustomersofyourbranchfor18years.YouhavegottoknowtheMcCuskersquitewellduringyourthree-yearstayattheWestEndbranch.

Johnearns£35,000peryearfromhisjobasaQuantitySurveyorandMaryearns£21,000peryearfromherjobasaNurse.TheMcCuskershavethreechildrenaged14,12and10.ThetwoyoungestchildrenhavealwayssharedabedroombuttheMcCuskersnowfeelthetimeisrighttomovetoalargerhousetogiveallthreechildrentheirownbedroom.

Youhadagreedatanearlierinterviewtoprovideacapitalandinterestmortgagefacilityfor£120,000over20years,andtheMcCuskershavesincepurchasedanewfour-bedroomedhouseinHamiltonfor£175,000.TheirexistinghomeinLanarkhasbeensoldfor£120,000andtheMcCuskershave£40,000outstandingontheircurrentmortgageloan.

TheMcCuskershavenowidentifiedaprobleminthattheyhavearrangedtomoveintotheirnewhomeon10Maybuttheirbuyerswillnotsettleontheiroldhomeuntil4June.

MichaelSamuelsiscurioustolearnwhatprocessyouusedtodecideuponthemortgagefacilitythatyouagreedtoprovidetheMcCuskers,andtolearnwhatyouintendtodotohelptheMcCuskersovercometheirnewproblem.

Interview2

Youdiscussedprovidingatermloanof£80,000over15yearstoyourcommercialcustomers,AlbionTyresLtd.MarkandJamesThomas,afatherandson,runthecompany,whichhastradedsuccessfullyfor8years.MrThomas,Senioris52yearsofageandhissonis28yearsofage.

Thebusinessemploysfourmembersofstaff,threeofwhomaretyreandexhaustfitters,andoneofwhomdealswithofficeadministration.Oneofthefittersalsodealswithmattersrelatingtobrakeandsuspensionrepairs,apartofthebusinessthataccountsforaround15%oftheoverallturnover.

Thecompany’sexistingpremisesarenowtoosmallforthebusinessandtheyhaveidentifiednewpremisesinthecentreoftownthatwouldsuittheirpurposes.Itisexpectedthatbymovingintothecentreoftownthattheirturnoverandprofitsshouldincreasebyaround20%perannum.

Thecompanyhasproducedasubstantialandimpressivebusinessplan,includingacashflowforecastthatshowsthatthebusinessshouldbeabletocomfortablymeetthenewcommitments.

Thebusinessplanhasalsoincorporatedthelastthreeyears’accounts.

YouhaveaskedtheThomas’toallowyoutimetoexaminetheinformationintheaccountsbeforeconfirmingyourdecision.

Interview3

MonicaRobertsrequestedaloanof£8,000over5years.Shehassatisfiedyouthatshecanaffordtherepaymentsbuthasinsistedthattheloanbesecuredinreturnforareducedrateofinterestbeingchargedbyyourbank.

YouhaveagreedtoapprovetheloanandMonicahasoffered2,000SharesinCICplc（currentmarketprice450ppershare）.Shehasalsooffered£2,0006%TreasuryStock2011（currentmarketprice£102）.

Interview4

Youarrangedanappointmentwithyourbusinesscustomer,JohnThomson,todiscusssomeconcernsthatyouhavebeenhavingwiththeoperationsofhisbusinessaccount.YouhavenowmadesomesuggestionstoMrThomsontohelphimtoregularisehisfinancialposition.

MichaelSamuelsissomewhatconfusedastohowyouwereabletoidentifythattherewereproblemswiththeoperationsofthebusinessinthefirstplace.

QUESTIONS

Allquestionsmustbeattempted.

1.FollowingtheinterviewwiththeMcCuskers,Michaelhasaskedyoutoexplaintohimtheproceduresthatalenderwouldusetoensurethatthedecisionmadeissoundandjustifiable.

SummarisethePrinciplesofLending,identifyingthetypeofinformationthatyouwouldhaveobtainedfromtheMcCuskersduringtheinterviewforthemortgageapplication.

2.MichaeliscurioustolearnhowyouintendtodealwiththeMcCuskers’newproblem:

a.Identifythemost