A bank can look profitable on its income statement and still run into serious trouble within days if it cannot meet a sudden wave of withdrawals or a spike in funding costs. That mismatch between assets and liabilities — not a lack of profit — is what usually forces institutions into emergency action, which is exactly the risk asset-liability management (ALM) is built to control.

This training course from the Arab British Fellowship Training Academy takes participants through the full ALM toolkit used by financial institutions today: interest rate and liquidity risk measurement, regulatory capital requirements, portfolio optimization, and the governance structures that keep all of it under control. By the end, participants will be equipped to manage risk, strengthen profitability, and support long-term financial stability through sound ALM practice.

Who should attend?

• Treasury and finance department managers responsible for financial resources and risk
• Asset and liability managers looking to sharpen their strategic approach to risk and return
• Risk management, financial planning, and decision-making professionals in banks, insurance companies, and investment firms
• Financial analysts and investment advisors who want a deeper grasp of ALM practice

What participants take away

• A working understanding of how interest rate changes and liquidity conditions affect a financial institution's balance sheet
• The ability to assess, measure, and mitigate financial risk using recognized ALM tools and techniques
• Practical skills for allocating resources efficiently while staying within regulatory and compliance boundaries
• A clear view of the governance and reporting environment that surrounds modern ALM

Module 1: The Foundations — What ALM Is and Why It Exists

• Defining ALM within the context of a financial institution.
• How ALM affects risk management and overall financial performance.
• Managing liquidity, profitability and risk at the same time.
• Balancing short-term liquidity needs against long-term financial goals.

Module 2: Mapping the Risk Landscape and Setting Risk Appetite

• Credit, market and operational risk within an ALM context.
• Understanding systemic risk and its impact on financial institutions.
• Assessing and managing liquidity risk.
• Defining risk appetite and governance structures, and the regulatory frameworks that shape them.

Module 3: Interest Rate Risk, From Theory to Hedge

• How interest rate changes affect financial performance, balance sheets and cash flow.
• Gap analysis and duration analysis as risk assessment tools.
• Hedging strategies using derivatives, swaps and other instruments, and risk-adjusted return on capital (RAROC).
• Simulating interest rate shocks and using stress-test results to refine ALM strategy.

Module 4: Liquidity Risk and Contingency Planning

• Defining liquidity risk and its role in financial institutions, and its relationship to solvency and profitability.
• Key liquidity ratios and managing liquidity gaps across different time horizons.
• Building a liquidity contingency framework, including the role of central banks and regulators.

Module 5: Regulation, Capital Adequacy and Compliance

• Basel III and other international regulatory standards shaping ALM practice.
• Capital adequacy ratios, risk-weighted assets, and their link to capital allocation.
• Reporting obligations and best practices for staying compliant, including regulatory stress testing.

Module 6: Turning Risk Management Into Portfolio Strategy

• Balancing risk and return in asset and liability portfolios.
• Asset allocation strategies and managing mismatches in maturity profiles and cash flow needs.
• Quantitative portfolio optimization methods and using derivatives to manage portfolio risk and return.

Module 7: Connecting ALM to the Corporate Growth Story

• The role of ALM in supporting long-term business goals and mergers, acquisitions or restructuring.
• Aligning ALM with strategic financial objectives.
• Forecasting asset and liability trends and adjusting ALM strategy as markets change.

Module 8: From Models to Implementation

• Key quantitative models for managing asset and liability risk.
• Simulation models for stress testing and scenario analysis.
• Data-driven decision-making and overcoming the practical challenges of implementing advanced ALM strategies.