FINS5530 Group Assignment – Instructions and Guidelines
2023 Term 3
Due date: Friday of week 10 (17 November at 11:59 pm).
Banks are subjected to a wide array of risks during their operations. Risk management
is about understanding and managing the bank's risk environment and taking measures,
where necessary, to ensure that risks are contained to acceptable levels, while making sure
loss-absorption buffers are sufficient. In addition, the analysis of banks must also consider the
current status of the country’s financial system and overall economy and threats posed by
environment such as climate change. Underpinning their ability to manage risks and meet
regulatory and community expectations is robust corporate governance led by the bank’s
board of directors.
This assignment will involve analysing financial statements1 and other relevant reports of
Commonwealth Bank (CBA) for the year 2023. You will be also asked to analyse Pillar 3
reports of Westpac Bank (Westpac) for the year 2023. You are also expected to undertake
other relevant research to support your analysis. Your analysis should address the specific
requirements outlined in the structure of the report given below.
The report must contain the following sections and sub-sections:
1) Cover page
Include course name, title of the report, group number, full names and student IDs of group
members and date of submission.
2) Executive summary
A summary of the key findings of your research (about a page)
3) Introduction
Provide an overview of how the report is structured and discuss the value of your research.
4) Risk governance
Analyse how risk is governed by CBA Board of Directors. In addition to reviewing CBA’s
Corporate Governance Statement2, you may also undertake additional research to support
your analysis. Make appropriate recommendations to further improve the performance of
the board in governing risk at the bank.
5) Credit Risk Analysis (in your report, you may shorten the description of the sub-sections
given below)
a) Australia has been experiencing high levels of inflation in the past couple of years.
Responding to this, since May 2022 there have been thirteen interest rate increases
by the RBA. Analyse the impact of rising interest rates on CBA’s credit risk (you are not
expected to analyse interest rate risk)
b) Analyse uncertainties (other than interest rate changes) in CBA’s operating
environment and discuss their possible effect on the bank’s credit risk.
1 CBA’s 2023 Annual Report is available at https://www.commbank.com.au/content/dam/commbank-assets/investors/2023-08/2023-annual-
report_print.pdf
2 CBA’s 2023 Corporate Governance Statement available at https://www.commbank.com.au/content/dam/commbank-
assets/investors/docs/CBA_CorpGov_2023.pdf
c) Analyse credit concentration of key businesses of CBA. Compare and contrast the
credit concentrations of CBA with Westpac (e.g., using exposure at default measure
or other suitable measures)3.
6) Liquidity Risk (in your report, you may shorten the description of the sub-sections given
below)
a) Analyse the composition of total funding of CBA.
b) Review the Liquidity Coverage Ratios of CBA and Westpac and discuss your findings.
7) Capital Adequacy
Review the trend in key capital ratios (including Leverage Ratio) of CBA and Westpac and
discuss your findings.
8) Climate risk analysis
Review CBA’s approach to analyse the risk of climate change on its portfolio (see p.42 to
p.47 of the bank’s 2023 Climate Report4). Analyse the results of the bank’s climate
scenario analysis.
9) Conclusion
Discuss the implications of your findings for CBA’s overall risk outlook.
10) List of references
All materials used in this report must be referenced in Harvard format. Any assessment
submitted without a reference list will not be marked. For details and assistance on Harvard
referencing, see https://student.unsw.edu.au/harvard-referencing
General Instructions:
• This is a group assignment. You are expected to work collaboratively on this assignment.
• You are encouraged to include your own summary tables and graphs in your report.
• Please undertake relevant research to support your analysis. All sources must be
carefully referenced.
• To write an effective report, please carefully read the marking criteria on the last page.
Format:
• Your report should be a maximum of 12 pages in length. P lease remember t o
number the pages . Tables and graphs are counted in the page limit. Cover page, table
of content, executive summary, list of references and appendices are not included in the
page limit.
• You may include formulas, calculation work and notes in the appendices. However,
important graphs and tables should always be included in the body of the report, NOT in
the appendices.
• Please be judicious in deciding which material should be included in the appendices.
Please avoid copying and pasting lengthy tables and charts from the banks’ reports to the
appendices (instead, make your own succinct summaries of the data wherever
appropriate). Material included in the appendices should be discussed in the body of the
report. Including appendices which are not directly helpful to support your discussion
3 CBA’s and Westpac’s Pillar 3 reports, in addition to any other reference may be useful to support your analysis. These are available at:
https://www.commbank.com.au/content/dam/commbank-assets/investors/docs/results/fy23/CBA-FY23-Basel-III-Pillar-3-Disclosure.pdf, and
https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/Pillar_3_June_2023.pdf
4 CBA’s 2023 Climate Report is available at https://www.commbank.com.au/content/dam/commbank-assets/investors/2023-
08/climate/2023-climate-report_print.pdf
decreases the value of the report.
• Line spacing should be 1.5. Font should be Arial or Calibri with a size of 12. Margin should
be Moderate or Normal.
• Please submit the report as a pdf file.
Submission:
• Submit the assignment at the link on Moodle.
• The submission should be done by only one member from your team. Only one
submission by a group is allowed. Therefore, please ensure that the file you submit is
the final version.
• Name the file using the group number and zID of the person submitting the report, e.g.,
GroupXX_z1234567.
• A penalty of 5% grade deduction will apply for each day of late submission after the
due date.
Individual contribution to the project:
The course emphasises active contribution by each group member to the assignment. If any
group member is not contributing adequately to the group, the group members should see
the lecturer in the class on or before Week 7 class. An appropriate solution will then be
decided.
Some Useful Links:
https://www.commbank.com.au/about-us/investors.html
https://www.commbank.com.au/content/dam/commbank-assets/investors/docs/2023-
annual-review.pdf
https://www.westpac.com.au/about-westpac/investor-centre/
https://www.apra.gov.au/news-and-publications
https://kpmg.com/au/en/home/insights/2022/11/major-australian-banks-full-year-
analysis-2022.html
https://www.pwc.com.au/banking-capital-markets/banking-matters/2022/major-banks-
analysis-november-2022.pdf
https://www.ey.com/en_au/economics/australian-banking-full-year-results-2022
Detailed Marking Criteria
Criteria
Poor
<50% (Fail)
Below Average
50% - 64% (Pass)
Average
65% - 74% (Credit)
Above Average
75% - 84% (Distinction)
Exceptional
≥ 85% (HD)
Demonstrates
knowledge and
understanding of
bank risks and risk
management
(30%)
Show little understanding
and reasoning.
Does not demonstrate
understanding of bank
risks and risk
management.
Show some thinking and reasoning
but most ideas are based on general
knowhow.
Main points lack detailed
development and understanding of
bank risks and risk management.
Content indicates thinking and
reasoning with understanding of
bank risks and risk management.
Main points are present with
some detail and development.
Content indicates articulated
thinking and good
understanding of bank risks
and risk management.
Main points well developed
with quality supporting details.
Content indicates clear, logical
and insightful understanding
of bank risks and risk
management.
Main points well developed
with high qualitive and
quantitative support.
Critical analysis of
issues applying
theory and
academic
concepts (30%)
Limited or no application
of theory or constructive
analysis.
No evidence of critical
thinking and research.
Some application of theory or data
but mainly descriptive.
Ideas are vague with little evidence
of critical thinking and research.
Theory and analysis of data was
clearly connected to the
application of the bank with
original thought on a few ideas.
Some research and critical
thinking are present.
Develops ideas with clear link
to theory with sufficient and
firm evidence and original
thinking. Critical thinking is
weaved into points.
Develops ideas with clear link to
theory with synthesis of ideas,
in- depth analysis and evidences
of original thought and support
for the topic.
Reveals high degree of critical
thinking.
Recommends
solution based on
evidence and
theory (20%)
No or inappropriate
recommendations
are made.
There are some recommendations
(too many or too few), may not be
clearly linked to relevant evidence
and theoretical concepts.
There are relevant market
recommendations, with partial
links to theoretical concepts plus
evidence through support.
The recommendations are
relevant to analysis and well
supported with appropriate
links to theoretical concepts
showing evidence through
relevant support.
The recommendations are
strongly linked to evidence and
highly appropriate links to
theoretical concepts showing
evidence through relevant
support.
Evidence of
Teamwork,
organization and
structure (20%)
No evidence of teamwork
demonstrated. Unclear,
uncoordinated, or centred
written style, formats, and
tones.
Serious errors.
Fails to follow most or all
format and assignment
requirements.
Team demonstrates limited
cohesion in writing. Somewhat
unclear, uncoordinated, or centred
written style, formats, and tones.
Many ideas are difficult to follow;
Includes irrelevant material or go off
track.
Fails to follow most format and
assignment requirements.
Team demonstrates some
cohesion in writing.
Each paragraph has a mainly
clear focus.
Some points remain misplaced
and stray from the topic.
Transitions evident but not used
throughout essay.
Meets most format and
assignment requirements with
some assembly errors.
Team demonstrates good
cohesion in writing.
Writing is coherent and
logically organized with
transitions used between ideas
and paragraphs to create
coherence. Overall unity of
ideas is present.
Meets format and assignment
requirements. Report is neat
and correctly assembled.
Team demonstrates excellent
cohesion in writing.
Assists comprehension and
insight with seamless
integration of sections. Writing
shows high degree of attention
to logic and reasoning of points.
Unity clearly leads the reader to
the conclusion and stirs
thought regarding the topic.
Meets all format and
assignment requirements and
evidence attention to detail.
Report is neat and correctly
assembled with professional
look.