BUS308-Credit and Lending Decisions

Task

Part A: First National Corporation Analysis

Specific Requirments/Questions

1. Does asset-based lending fit First National’s corporate image and tradition? Its lending philosophy? Explain.

2. Does asset-based lending improve the bank’s return on net worth (RONW) and return on assets (ROA)?

3. Does First National’s deposit composition make it necessary to find higheryielding earning assets than are current booked? Explain.

4. Does First National venture in asset-based lending parallel banks’ lending practices prior to the recent global financial crisis? Justify your position. 

Quality is the most appropriate determinant of the grade awarded but it is suggested that approximately 2,500 words be a suitable length. The group paper should have an executive summary.

Part B: Edward Altman: Where Are We in the Credit Cycle?*

Consider First National Corporation has the same financial statements headed 2019, 2018, and 2017, instead of 1985, 1984, and 1983. Many changes have taken place in products and technology. Edward Altman published his concern about a credit bubble prior to the Global Financial Crisis. Is he right again? What credit risks face First National and what alternative steps can be taken to mitigate these risks?

Quality is the most appropriate determinant of the grade awarded but it is suggested that approximately 1,500 words be a suitable length.

The group paper should have an abstract