Banks and insurers: KPIs, models and valuation

Module 02 / 5 · 70 min

Build a balance-sheet-driven bank model with provisioning under SBB/90/2024 and capital under SBB/95/2025, value it with residual income, and read an insurer through its combined ratio, reserves and solvency.

In this module you will learn to

Explain NII, NIM, fees, cost of risk and capital as the drivers of bank value
Project a bank's balance sheet, provisions and capital ratios after the credit cap's removal
Value bank equity with a residual income model and interpret price to book
Analyze an insurer's premiums, loss and combined ratios, investment income and solvency

Built on

Erudite Africa course specification: 3.i Sector-Specific Analysis and Modeling, Levels 1 and 2 (October 2026)
Erudite Africa Ethiopian-context programme overview and legal register (October 2026)
NBE directives as listed in the lessons: SBB/90/2024, SBB/92/2024, SBB/95/2025, NBE/INT/13/2026, FXD/01/2024, FXD/04/2026, ONPS/09/2023 (reported), and the MPC No. 7 press release (July 2026)
Ethiopian laws and directives: Investment Proclamation No. 1180/2020, PPP Proclamation No. 1076/2018 and Directives No. 1067/2025 and 242/2013 E.C., SEZ Proclamation No. 1322/2024 and Directive No. 1083/2025, Investment Incentives Directive No. 1064/2025, Excise Directive No. 1007/2024; Proclamations No. 1148/2019, 810/2013 and 678/2010 as reported
World Bank: Ethiopia Telecom Market Assessment, Review of Industrial Parks in Ethiopia, Macro Poverty Outlook (April 2026) and Country Economic Memorandum

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.