Diploma in Banking and Finance
FIN5005 Credit Risk Analysis & Management
Group Assignment (30% of course grade)
Group Presentation/Viva (10% of course grade)
1. For this Group Assignment, form groups of 3 – 4 members. Each group member must contribute to the assignment compilation through processes including ideation, performing research and analyses and critical thinking. There are 2 parts to this assignment – Part A on personal home loans and Part B on company loans.
2. The maximum marks for this assignment are 100 marks, of which:
• 75 marks shall be allocated to the analytical content of your report.
• 25 marks shall be allocated to the group presentation/viva. The presentation should discuss salient points of your report. You may include a summary to reflect insights or soft skills acquired in this group assignment.
You may consolidate your content in NOT more than TEN (10) PowerPoint slides.
3 PART A
Please obtain relevant material from suitable sources including but not limited to the websites of any TWO (2) different banks operating in Singapore in respect of their housing loan (HDB apartment) products.
Your group’s written report must address the following:
a. From your research and the material culled from websites etc., describe/compare the housing loan products that your selected commercial banks in Singapore sell to their customers.
In your group’s report, ensure that your group includes the purpose, maximum financing amount/quantum, tenure, usage, interest rate type, the basis of computing interest, repayment structure and any other relevant features of their home loan. Use a table to help you describe the above products and explain key concepts and terms used. (15 marks)
b. Mary, 40-year-old senior corporate executives would like to buy a resale 4-bedroom HDB apartment at Pinnacle@Duxton, her first property for personal use in Singapore, with the expected purchase price of about $1.3 million. She would be living with her mother, an elderly dependent. She needs your advice and help to decide on a more suitable home loan package. She is not eligible to borrow directly from HDB. Hence, she needs to take up a bank loan. They are currently renting a private apartment. Mary’s personal cashflow statement for the last twelve months is as follows:
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Cash flow for last 12 months
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Cash inflows
Salary (net of CPF Contribution)
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S$
225,000
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Interest and dividend income
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25,000
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Total Cash inflows
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250,000
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Cash outflows
Insurance premium
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10,000
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Recreation & holidays
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20,000
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Personal Income Tax
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25,000
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Car loan
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20,000
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Living expenses
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100,000
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Total Cash outflows
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175,000
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Net Cash flows
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75,000
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Based on the income profile of Mary (you may be creative with her financial profile such as net worth and savings) and the two sets of product information on the selected banks’ home loan, recommend the more suitable package for her based on her financial profile. Support your recommendation with reasons/comparisons of benefits and costs from her perspective as a consumer. Incorporate the Monetary Authority of Singapore (MAS) rules on HDB property housing loans. You may tabulate your findings when necessary. (25 marks)
4. Part B
(a) Select a publicly listed company on the Singapore Exchange (SGX). Assume that the company you have selected requires a corporate loan of $200 million to expand their business. You are the credit officer of the lending bank. You are required to conduct a credit evaluation of the company with the following qualitative analysis of the borrower.
(i) business viability;
(ii) operational efficiency;
(iii) management quality; and
(iv) the stage of growth (20 marks)
(b) Working capital credit facilities for a small and medium enterprise
You are the bank officer of a local bank. Your client, Grace Stationery Company (GSC) has approached you for a working capital credit line. You have gathered information on GSC, as follows: -
• Grace Stationery Company (GSC) is a wholesale stationery company. As a small and medium enterprise, GSC manages its working capital carefully. It sells stationery to its customers on credit basis as most of its customers are corporate clients. GSC estimated about $9,515,000 is tied up in trade debtors.
• GSC purchases stationery from India and Southeast Asia on 3 months credit.
• GSC keeps 2 months inventory of stationery.
• A summary of GSC financial result is appended.
Your task is to determine the working capital requirement of GSC. (15 marks)
5. Submit the softcopy of your group’s written report in Microsoft Word via Canvas by 8 May 2025, 11.59 am.
Penalties will be imposed on late submission, i.e. marks will be reduced by 20% if the assignments are submitted late but within 24 hours of the due date. After 24 hours of the due date, assignments that are submitted will not be marked and will be awarded zero marks.
The report must NOT exceed 4,000 words. Please ensure a word count is indicated in your report. The word count does not include your cover page, content page and appendices. Any relevant research materials should be included in the appendices of the report. Please use Times New Roman Font 12 foryour group’s report, and all pages must be numbered.