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Confidential
Banking Sector
Service Offerings
Credentials
2PKC Advisory
Service Offerings
Strategy Detailing and Implementation
Segment Strategy, Product
Strategy including Data Analytics
Product/ Client/ Branch Profitability
Analysis
Strategic Consulting including Set-up &
Management of Shared Service Centre
Budget & Long Range Plan Preparation
Board/ Management Decision
Support Documents, Interactive
Management Dashboards
Strategic Planning & Analysis
Basel III Implementation Support
Impact on CAR, LCR, NSFR
Capital Structuring
RWA Saving through RWA
Optimization Framework
Risk based pricing through development
of RAROC Framework
Fund Transfer Pricing Implementation/
Review
Impairment Testing
Capital Budgeting & Planning
Portfolio Review and Evaluation
Investment Advisory and Diagnostic
Assessment
Transaction Support
– Investment Opportunity Assessment
– Financial Modeling & Valuation
– Preparation of Transaction Related
Documents (Business Plan, Info
Memorandum and Teaser)
– Support in Transaction Structuring
and Term-Sheet Analysis
– Management of Data Room
Corporate Finance Advisory
Risk Appetite Framework
Risk Dashboards including Risk
Information Packs
ICAAP and Stress Testing
Credit Appraisal Framework
Credit Portfolio Review
Collateral Valuation and Management
Risk Advisory
Rating Initiation Support (e.g. Fitch,
Moody’s, S&P and Capital Intelligence)
Preparation of Rating Information Pack for
Optimal Positioning
Debt: Information Memorandum &
Roadshow Presentation, Contract Review,
Negotiation Support and Query Handling
Rating & Debt Program Management
IFRS Conversion
HR Consulting
Internal Audit and Process Reviews
Development of Risk and Control Self-
Assessment (RCSA) Framework
Corporate Governance & Compliance
Assurance Services
Policy & Procedure Manuals
Process Consulting
3PKC Advisory
Service Offerings - Finance Department
Rating Advisory including rating initiation/review
support comprising indicative rating assessment,
optimal positioning for securing, maintaining or
upgrading rating and post meeting query handling
Basel III Implementation Analysis including impact
on capital (CAR), liquidity (LCR) and funding (NSFR)
ratios
RWA Analysis and Evaluation of Potential
Optimization Options with focus on evaluation of
asset classification, reduction of non-core assets,
restructuring of investments etc.
Conversion of Financial Statements from Current
Accounting Standards to IFRS
Preparation of Annual Budget and Long Range
Plan based on operating drivers for each department,
branch & subsidiary
Product Profitability Analysis covering in depth
analysis of each product including analysis of income
/expense, fund transfer pricing, allocation of provision
to each asset product, cost & capital allocation
Client level Profitability and Risk Adjusted Return
Analysis based on client level income, transfer
pricing, cost allocation, provisioning and RWAs
Fund Transfer Pricing (FTP) Implementation by
assigning FTP to each asset and liability product and
calculation of real income generated by each product
and business unit for the bank
Review and Refinement of Cost Allocation
Methodologies including identification of operational
drivers for each cost, arriving at cost allocation
proportions at product/client and business level
Preparation of Monthly MIS including consolidation
of financial performance, detailed variance analysis,
capital & cost allocation, asset quality details,
investment portfolio analysis, re-pricing analysis etc.
Goodwill Impairment Testing for subsidiaries as per
IAS 36
Assistance in Fund Raising (Tier-I/ Tier-II
instruments) with detailed analysis of pricing,
preparation of prospectus and road show
presentation, maximum eligible capital that can be
raised as per regulatory limits, identifying optimal
structure for the instrument etc.
4PKC Advisory
Service Offerings - Risk Department
Development/Review of Risk Appetite Framework
Risk Oversight Framework i.e. preparation of risk
information packs covering Credit, Market, &
Operational risk including detailed analysis of portfolio
segmentation, collateral & provision coverage, client
& sector concentrations, NPA/ watch list exposures,
earnings at risk (EAR), re-pricing & liquidity gaps etc.
Credit Appraisal including preparation of Credit
Notes covering macro environment, sector analysis
and screening of credit based on key financials
Periodic Review of Credit Portfolio including
detailed analysis of all major borrowers covering
financial performance vis-à-vis exposure, rating,
sector analysis, collateral type & value, asset quality
ICAAP and Stress Testing Analysis based on
regulatory requirements as well as internally
developed models
Collateral Valuation and Management including
periodic monitoring of collaterals by defining base
coverage ratio and raising red flags in case of breach
Assistance in Preparation of Board Packs
Review of existing risk management practices/
processes to align them with the industry best
practices and Central Bank & Basel requirements
Assistance to Operational Risk function in
performing Risk and Control Self-Assessment
(RCSA) workshops for the departments and branches
of the Bank that results in holistic risk assessment
and implied self controls
Design and development of the roles and
responsibilities of the Enterprise Risk Management
(ERM) function of the Bank to ensure efficient and
effective monitoring
Development of Subsidiaries Oversight Manual
outlining various activities to be performed by Group
ERM with respect to the subsidiaries risk oversight
Compliance Assurance i.e. gap analysis between
the risk policies of the Bank vis-à-vis Central Bank
and Basel requirements with a view to ensure the
level of compliance
Gap analysis between the risk policies of the Bank
vis-a-vis its subsidiaries to bring standardization
5PKC Advisory
Service Offerings – Strategy, Treasury & Investment Department
Strategy Detailing
Advisory Assistance in M&A including target
identification, business & financial due diligence,
valuation etc.
Strategy Detailing for Geographic Expansion
including assessment of macro environment, industry
structure and market analysis etc.
Strategy Detailing for Business Segment including
redefined customer segmentation, enhanced product
and service offerings across customer life cycle,
alternative delivery channels etc.
Assistance in Developing Product Proposition
with focus on pricing, expansion of delivery channels,
potential client base etc.
Feasibility Study for Opening a New Branch or
closing /relocating an existing branch with detailed
analysis of strategic options, execution plan, cost
benefit analysis etc.
Detailed Review of Existing Operations with
identification of gaps in the operational model and
formulating a detailed development and action plan
Analysis of the Best in Class Products and
Services offered by the peers to identify key products
& services gaps which could to be launched by the
bank
Treasury & Investment
Re-pricing Gap and Earnings at Risk (EaR)
Analysis across various time buckets with interest
rate sensitivity assessment for asset and liabilities of
various currencies and interest rate terms
Liquidity Position Analysis based on behavioural,
contractual and stress scenarios including substantial
deposit withdrawal, asset quality deterioration,
liquidity crunch in overall money market etc.
Preparation of Periodic Information Packs (ALCO)
and other management reports covering assessment
of macro-economic risks, market outlook, funding mix,
currency risk, deposit & placement concentration
analysis, earnings at risk, re-pricing & liquidity gaps
Financial Projections and Valuation of
Investments using discounted cash flows, excess
return & peer multiple methodologies
Investment Portfolio Review and assessment of
optimization options based on strategic importance,
liquidity, RWAs and risk adjusted return analysis
Investment Research including historical
performance and outlook on various asset classes
including fixed income, equity etc.
6PKC Advisory
Corporate Finance and Investment Banking
Our Esteemed Clients – BFSI Segment
Commercial Banking
Insurance
7PKC Advisory
Our Esteemed Clients – Across Other Sectors
8PKC Advisory
Case Studies – Strategic Planning & Analysis
The Business Situation
The Client required assistance in formulating a detailed private
banking strategy with the objective of capturing market potential by
leveraging on its regional presence
Our Role
PKC Advisory carried out an in depth analysis and assisted the
Client in developing its private banking strategy which involved:
Market study of private banking in the GCC, Turkey and
Lebanon in terms of market size, demographics, products
offered, clients’ assets class preferences etc
Benchmarking analysis with key players in GCC including
product propositions offered
Assessment of the Client’s existing capabilities including
business model, operational issues, customer feedback etc
Detailed strategy formulation with focus on proposed product/
service propositions, effective distribution channels, geographic
reach and rebranding
Action plan for implementation of the proposed strategy
The Value We Added
Strategy formulation and financial projections formed the base for
executing the Client’s new business opportunity
Detailed Review of Private Banking Strategy
The Business Situation
The Client required assistance in detailing its strategy and preparing
a long-term operational & financial plan
Our Role
PKC Advisory prepared a detailed presentation clearly articulating
the bank’s strategy and prepared various scenarios to achieve the
requisite regulatory ratios. The project involved:
Validation of financial projections for each business line and
entity in discussion with respective heads based on economic
scenario, competitive landscape and operational parameters i.e.
number of customers, average ticket size, expected spreads,
fund transfer pricing, etc.
Detailing of key risks & opportunities and challenges & mitigants
for the operational plan
Prepared and evaluated various capital plan scenarios for the
next five-years to ensure compliance with Basel III regulations at
various capital levels, i.e., Common Equity Tier I (CETI),
Additional Tier I (AT1) and Tier II
The Value We Added
The long range plan comprehensively laid out the group-wide
roadmap for the Client and the capital plan helped the Client in
proactively fulfilling regulatory capital requirements
Strategy detailing for a Commercial Bank
9PKC Advisory
Case Studies – Strategic Planning & Analysis
The Business Situation
The Client required assistance in reviewing and refining the cost
allocation methodology among different business units
Our Role
PKC Advisory undertook a detailed analysis to identify key relevant
measurable operational drivers for each cost and arrived at cost
allocation proportions for each business unit, which involved :
Analysis of existing cost allocation methodology and identification
of shortcomings
Discussion with management on potential refinements to
methodology in order to address these shortcomings
Identification of key relevant measurable operational drivers
(including number of transactions, FTEs, volumes, time spent,
assets & liabilities etc.) for each direct & indirect cost
Carrying out a back testing of recommended cost allocation
methodology for historical and budget nos. and doing a P&L
impact analysis for each business unit
The Value We Added
Revised cost allocation methodology enabled the management to
ascertain the true profitability for each segment and take more
informed decisions
Review and Refinement of Cost Allocation Methodology
The Business Situation
The Client required assistance in preparation of detailed product
level profitability & return analysis for its various segments i.e.
Corporate, Retail, Private, Financial Institution and Treasury
Our Role
PKC Advisory undertook an in depth analysis for each product for
the various segments and assisted the Client in developing its
product profitability model based on the following methodology :
Analysis of existing product level third party interest
income/expenses & FTP and non-interest income incl. fee, forex
& securities income
Devise cost allocation methodology by segregating direct and
indirect costs attributable to each product in discussion with
management
Allocation of specific & general cost of credit to each asset
product
Devise capital allocation methodology based on risk weighting &
regulatory capital required for each asset products
Profitability Analysis for all products and return analysis for asset
products
The Value We Added
This analysis was incorporated into the MIS and facilitated regular
tracking of product profitability trends
Segment & Product Profitability Analysis
10PKC Advisory
Case Studies – Capital Budgeting & Planning and Risk Advisory
The Business Situation
In order to effectively monitor the risk functions, the Client required
assistance in preparation of information packs to compile, monitor
and analyze key risks
Our Role
PKC Advisory undertook a detailed assessment of key risks
including:
Credit Risk – Analysis of asset quality i.e. NPAs and watch list
exposures, aging profile of portfolio, client and sector
concentration, provision & collateral coverage, potential
provision charge etc
Market Risk – Analysis of investments book including derivative
exposure, currency and interest rate risk, EaR, DVO1, Re-
pricing gaps etc
Current & potential operational loss/ incidents
Liquidity gap analysis under different scenarios i.e. Stress,
behavioral, contractual etc
ICAAP & stress testing analysis
The Value We Added
The information packs assisted the management to form a
comprehensive view on key risks. The final output was shared with
the Board and respective regulators
Risk information packs with analysis of Credit,
Operational, Market, Liquidity and Re-pricing Risk
The Business Situation
The Bank’s regulatory capital ratios were falling below the minimum
threshold as per Basel III. The Bank required assistance in
assessing various capital raising and asset rationalization options to
enhance its regulatory capital ratios.
Our Role
PKC Advisory carried out a detailed study of the new capital
adequacy regulations & its impact on client’s capital ratios, which
involved:
Projecting the capital ratios including Common Equity Tier1
(CET1) , Additional Tier 1 (AT1) and Tier II ratios of the client
based on the Long range projections & the Basel III regulations
Evaluating the negative impact of the non-recognition of the
existing Tier II subordinate bonds in bank’s capital and non-
recognition of real estate collaterals as an eligible Credit Risk
Mitigant
Detailing a capital plan highlighting the capital raising and asset
optimization strategy to get back to comfortable capital levels at
each tier level in next 1-2 years
Detailing asset optimization strategy including reduction of the
non-core financial assets, restructuring of investments and other
optimization measures to reduce risk weighted assets
The Value We Added
Suggested capital plan helped the Client to meet capital ratio
requirements as per Central Bank’s Basel III guidelines.
Assessment and structuring of capital options and asset
optimization under Basel III for a Commercial Bank
11PKC Advisory
Case Studies – Corporate Finance Advisory
The Business Situation
The Client had recently acquired a commercial bank and required
assistance in carrying out the post-acquisition purchase price
allocation exercise as per IFRS
Our Role
PKC Advisory undertook a detailed assessment including
identification and valuation of intangible assets, involving:
Identification of intangible assets as per IFRS while taking into
consideration the control over resources, future economic
benefits etc
Identification of the useful economic life of intangible assets for
estimation of amortization period
Valuation of the identified intangible assets e.g. banking license,
customer relationships, brand, etc post selection of an
appropriate valuation methodology in line with IFRS
requirements
The Value We Added
The valuation exercise helped the Client understand the nature and
value of identified intangibles assets and estimate the potential
amortization expenses
Purchase Price Allocation
The Business Situation
The Client was in discussions with a retail Islamic bank and required
advisory assistance both in the initial phase, involving independent
valuation of both banks; as well as in the subsequent phase
involving detailed financial due diligence as well as developing post
merger scenarios
Our Role
PKC Advisory assisted the Client through the valuation assessment
and due-diligence exercise including:
Analysis of counter-party’s retail banking franchise covering loan
portfolio, investments, deposit base, etc highlighting material
issues and identifying required valuation adjustments
Based on the due diligence findings, carried out detailed
valuation exercise to support the Client in deal negotiations
Preparation of detailed post-merger financial model to assess
the financial impact along with implied CAR computations
PKC Advisory also assisted in program management by
organizing the data room, handling counter-party queries,
developing transaction related deliverables for the Board
The Value We Added
The outcome of due-diligence and detailed valuation exercise
assisted the Client in the merger negotiations
Assistance in proposed merger transaction between a
Wholesale Bank and a Retail Commercial Bank
12PKC Advisory
Case Studies – Rating and Debt Program Management
The Business Situation
The Client required assistance in raising capital through separate
equity and perpetual debt issuances
Our Role
PKC Advisory assisted the Client in the preparatory and execution
stages of capital raising:
Developed a detailed business plan and financial projections
incorporating the proposed fund raising and its impact on capital
ratios
Assisted the Client in arriving at an indicative pricing for the
equity and perpetual issuances based on trading levels and
spread analysis of comparable FIs, precedent issues, market
conditions
Drafted management presentation seeking board approval for
capital increase
Worked closely with the appointed Book-runner / IB to develop
the key documents including Prospectus, Roadshow and
Analyst Presentations
Provided necessary assistance to the Client in handling
investors queries regarding the company’s current performance,
financial projections, valuations, etc.
The Value We Added
The exercise enabled the Client in being in a state of readiness to
access and close the transaction in a very short window
Assistance in planning fund raising through equity and
debt
The Business Situation
Post an acquisition, the Client’s risk-adjusted capital ratio declined
below the rating threshold leading to a potentially adverse rating
action
Our Role
PKC Advisory undertook a comprehensive study of applicable rating
methodology and optimally positioned the Bank highlighting:
Stronger business position with further diversification post
acquisition
Improving risk profile demonstrated by improved asset quality,
increased provision & collateral coverage ratios etc
Detailed capital plan highlighting the strategy to achieve target
capital levels over a 12-18 months timeframe
Identified gaps in sovereign support uplift that worked to the
benefit of the Client
Highlighted other key strengths including robust liquidity and
stable funding mix
PKC Advisory also assisted the Client in addressing queries during
and post rating meeting
The Value We Added
The optimal rating positioning resulted in a positive change in
outlook in the Client’s credit rating
Rating Advisory
13PKC Advisory
Case Studies – Process Consulting
The Business Situation
The objective of this assignment was to develop a comprehensive
vendor evaluation framework enabling comparison of bids/
proposals received from vendors for their products/ services as
requested by the bank.
Our Role
PKC Advisory carried out a detailed review of all the relevant
evaluation criteria such as RFP evaluation consisting of general
information of the bidder, engagement of sub-contractor, support
services, IT, Audit and Security related requirements, any additional
requirements specific to the product/ service and commercial
proposal. Suitable weights and go-no go decisions were then
assigned to different parameters identified and the same were
developed as an excel based framework for quick tabulation and
comparison of the responses received from the interested bidders
leading to a comparative snapshot of various bids and display of the
results on a dashboard.
The Value We Added
The exercise enabled the bank to put in use a comprehensive
vendor evaluation framework assisting them in quick, efficient and
reliable comparison of all bids/proposals received from vendors in
response to RFPs floated by the bank for any of their desired
products/ services.
Design and development of vendor evaluation framework
for a leading commercial bank in Kuwait
The Business Situation
The Client required a comprehensive review and update of existing
policy and procedures by incorporating industry best practices and
ensuring compliance with Central Bank and Basel Committee
requirements.
Our Role
PKC Advisory assisted the Client by undertaking:
Detailed review of existing documents to ascertain the gaps
between the documented policy & procedures vis-à-vis existing
practice, regulations and intended policies and practices.
Drafted new set of documents for policy & procedures by
incorporating local central bank requirements, clearly defining/
segregating duties by stating roles, responsibilities, authorities
and documentation requirements
The Value We Added
The exercise allowed the Bank to have policy and procedure
documents for various risk management functions at par with
industry standards and in line with the Central Bank requirements.
Credit, Operational and Information Security risk policy
and procedure
Email : [email protected] Website : www.pkcadvisory.com
