English for

Banking &Finance 2
Vocational English
Course Book

Marjorie Rosenberg * A2-B1|

Series editor David Bonamy

CD-ROM

A L WA Y S L E A R N I N G
PEARSON
English for
Banking &Finance 2
Course B o o k

Marjorie Rosenberg
Series editor David Bonamy
 Contents
Function Language Voca bular y

Managing your finances p. 4 Explaining personal banking Present simple Personal banking
habits
Using basic financial terms
Unit 1 Money matters

Finance and the economy p. 6 Discussing the economy Present simple: revision Opposites

Banks and building societies Describing different types of Present simple with adverbs of Functions of financial
p. 8 financial organisations frequency and time expressions institutions
Present continuous
Investment banks p. 10 Understanding how investment Articles Investment banking
banks work

Review p. 11

Bank products p. 12 Finding out what a customer Modals for ability and possibility Retail banking products
needs and giving advice Making suggestions and
recommendations
Online banking p. 14 Explaining online bank accounts Future possibility and ability: wil Online banking
Unit 2 P r o d u c t s i n

to new customers and be able ot

retail banking

The imperative
Telephone helplines p. 16 Giving and checking instructions Sequencers Telephone helpline words
Future forms: wil, present
continuous and be going ot
Comparing products p. 18 Comparing product details Comparative and superlative Product phrases
adjectives
Review p. 19

Credit and debit cards p. 20 Talking about credit Zero conditional Credit and debit cards
Unit3 Personall o a n sa n d

Plastic money p. 22 Agreeing and disagreeing politely First conditional Using credit cards
P e r s o n a l l o a n s a n d overdrafts Asking for and giving information Modals for obligation, necessity Borrowing money
credit

p. 24 and prohibition
Mortgages p. 26 Explaining terms of mortgages Modals for possibility and Mortgages
permission

Review p. 27

The basics of Islamic banking Explaining the regulations of Past simple Word partnerships
p. 28 Islamic banking
Unit 4 I s l a m i c banking

Islamic retail products p. 30 Talking about past habits Used to Banking verbs
Islamic corporate banking Explaining different Islamic Past continuous Islamic corporate banking
products .p 32 banking products terms

The concepts of Islamic Comparing Islamic and non- Modals ni the past Background of Islamic banks
banking p. 43 Islamic banking

Review p. 35

2 Contents
 Function Language Vocabulary

Departments p. 36 Describing the work in different Prepositions Verb-noun partnerships

departments of a bank

The structure of the bank p. 38 Talking about banking jobs, Gerunds and infinitives after Job titles and departments
Unit 5 T h e s t r u c t u r e

responsibilities and tasks verbs

Explaining the hierarchy ni a
ofa bank

bank

Presentation skills p. 40 Giving a presentation Future forms and past simple Presentation words

The changing world of banking Talking about change Present perfect Historic banking
p. 42

Review p.43

Cash flow p. 44 Discussing cash flow issues Quantifiers Cash flow words
Finance in companies

The balance sheet p. 46 Describing assets and liabilities Passive forms Large numbers

The income statement p. 48 Understanding an income Modals of speculation Mathematical formulas

statement

The cash flow statement p. 50 Showing the cause of a problem Cause and effect Cash flow statement
and its effect
Unit 6

Review p. 51

Taking care of corporate Making suggestions to solve Second conditional Corporate products
clients p. 52 clients' problems
Unit 7 Corporate banking

Loans, credit lines and leasing Discussing corporate product Second conditional with modals Verb-noun partnerships
p. 54 solutions

Company restructuring and Formulating a loan modification Making suggestions and Word partnerships
loan modification p. 56 strategy recommendations
Bankruptcy p. 58 Discussing voluntary bankruptcy Past simple and present perfect Debt
and legal proceedings

Review p. 59

National a n d central b a n k s Talking about central banks and Gerund as subject and object Central banking
p. 60 their functions
Unit 8 Central b a n k s a n d
bankingregulations

Liquidity and the business Explaining the business cycle Present perfect continuous The business cycle and
cycle p. 62 liquidity
Regulations p. 64 Discussing regulations and risk Defining relative clauses Regulations
Economic change p. 66 Describing graphs Parts of speech Adjectives and adverbs
describing change

Review p. 67

Partner files p. 68

Audio script p. 47

Contents 3
 • u n d e r s t a n d a n d u s e b a s i c financial t e r m s

Money • explain personal banking habits a n d facts

• describe different types of financial
organisations
matters • understand a n d explain h o w investment
bankswork

Managing your finances

Reading 1 Look at Maria's bank statement. Complete her account summary.

Account s u m m a r y
F i r s tB a n k Opening balance £2,300
Ms Maria Roberts
Payments ni £(1)
Payments out £(2)
68 Glenridge Road
Birmingham
Closing balance £3,714
Overdraft limit £2,100
BR5 5QT
IBAN: GB10FIRST43760959233021
United Kingdom BIC: FIRSTGB6043C
Sort code: 437609
23 December to 22 January Account number: 59233021
Account name: Ms Maria Roberts Sheet number: 20

A Your current account details

Date P a y m e n tt y p e Details P a i dout P a i di n Balance
22 Dec Balance brought forward £2,300
23 Dec Tr a n s f e r B Salary £2,423 £4,723
27 Dec Withdrawal ATM No. 32 £250 £4,473
31 Dec Credit Interest £34 £4,507
04 Jan Standing order Rent £450 £4,057
IBAN =
06 Jan Direct d e b i t
Telephone £57 £4,000
International Bank 15 Jan Direct debit Home insurance £68 £3,932
Account Number 21 Jan Direct debit Credit card £218 £3,714
BIC = Bank
Identifier Code
81,043 £2,457
ATM = A u t o m a t e d B a l a n c e carried forward £3,714
Teller M a c h i n e

2 Match sentences 1-7 to letters A-G on the bank statement in .1

1 Maria has a c u r r e n t account.
2 Maria sees how much money she has at the end of the month.
3 She pays her rent every month by standing order. —
She pays other bills by direct debit.
5 She withdraws cash at ATMs.
6 She receives her salary on the 23rd of the month.
7 She receives interest o n c e a year. -

4 Money m a t t e r s
 Vocabulary 3 Complete these sentences with the words ni the box.

ATM balance credit current a c c o u n t direct debit

h o m e insurance rent salary standing order withdrawal
1 My - shows how much money I have in my account.
2 I have a(n) at my bank to make payments and receive money.
3 I see a(n) - on my account when someone pays money into it.
4 I usually get cash out of my account at a(n)
5 I make the same payment every month with a n ) -
6 My employer pays my _ into my account.
7 I have - to protect my home.
8 I pay bills each month automatically. I use
9 Every month I pay - for my flat.
10 I take money from my account. It is a(n)
Speaking 4 Work ni pairs. Look at Peter's monthly budget and answer these questions.
1 How much does Peter pay for insurance every month?
2 How much salary does Peter receive?
3 How much does Peter pay for petrol every month?

Income Outgoings
salary $1,821 rent $575
food $370
electricity: monthly payment S56
home insurance: monthly payment $28
credit card S126
pension contributions $115
clothes S24
car insurance: monthly payment $42
petrol $35
savings $150
other $220

Language

Present simple
We use the present simple to talk about My current account doesn't pay interest. (fact)
facts, repeated actions and habits. She pays her rent every month by standing order. (repeated action)
e withdraw cash at an ATM. (habit)
W

5 Look at the questions ni 4. Write five more questions about Peter's income and
outgoings. Then ask a partner.
:A How much does Peter pay for rent every month?
: He pays S.575.
B
Speaking 6 Write your own monthly budget. Show your income and outgoings. What si your
balance at the end of the month? Ask your partner about their monthly budget.
Do they have any direct debits or standing orders? Which bills do they pay
with t h e m ?

Writing 7 Write a short report about the money that you spend each month.
Every month I receive…. I pay of…
r .. I buy …
Moneymatters 5
 Finance and the e c o n o m y
Speaking 1 Work ni pairs. What activities do these illustrations represent? Are these
activities important for the economy? Why/Why not? Use the words in the box
to help you.

buy factory finance housing market manufacturing

produce retailing sell

L O C A LS T O R E
BANK

E
SAL
N
DOW

N
DOW
FOR
SING

SING
SALE
CLO

CLO

Vocabulary 2 Match words 1-9 to definitions a-i.

1 loss a m o n e y that you b o r r o w from a bank
2 demand b) selling something for less than you buy it for
3 share C) money that you pay to borrow money
4 interest d) ownership of part of a company
investment e) income greater than expenses
6 supply goods and services that people sell
7 profit g) money that you borrow to buy a house or flat
loan h) money that is put into a business
9 mortgage i) goods and services that people want to buy
Reading 3 Complete this introduction to finance from a consumer website with words
from 2.

6 0 n

The economy and the world of finance

Two key principles of the economy are supply and who want to buy a house or flat usually choose
demand. Some people have goods or services a(n) (4)
to sell and other people want to buy those goods
or services. The relationship between supply and (5) in shares of stock is another part
is very important. The world of of the financial world. People buy shares and then
finance is a necessary part of the economy. own a part of a company. They hope to make a(n)
(6) when the company does well. When
People need money to do business. Banks first the company does not do well, the investor makes
collect money from customers. Then they lend a(n) (7)
money to people or institutions. Customers who
These are s o m e of the ways that financial
borrow money pay (2) to t h e b a n k
until they pay the money back. There are different institutions help the economy.
types of (3) . For example, people

6 Monevmatters
 4 Match 1-6 to a-f to make sentences.
1 Customers pay interest on a) money to custome rs.
2 The economy needs b) m a k e i n v e s t m e n t s ?
3 Banks often lend c) lend money to every customer.
4 Do you sometimes d) a mortgage?
5 We don't e) money they borrow.
6 Do they have f) strong financial institutions.
5 Which sentences ni 4are facts? Mark these F. Which are repeated actions
or habits? Mark these R/H.

Speaking 6 Work in pairs. Discuss these questions.

1 Why is the relationship between supply and demand important?
2 In your country, which goods and services are popular?
3 Do the prices of these goods and services change often? Give examples.
Vocabulary 7 Match words 1-4 to their opposites a-d
1 borrow a) sell
2 loss b) supply
3 demand c) lend
4 buy d) profit
8 Write s e n t e n c e s with the w o r d s in 7.

There is a big supply of houses but there si no demand for them.

Listening 9 6 9 02 Listen to two telephone conversations and match speakers 1and 2
to sentences a-c. There is one extra sentence.
a) This customer has a question about interest. .
b) This c u s t o m e r wants to invest in a company. .
c) This customer needs a mortgage.
10 Now complete the conversations with words from .7 Then listen again and
check your answers.
1 :A Good morning. AFC Bank, can I help you?
B: Good morning. I am a customer of the bank and I want to
(1) - - some money.
:A Yes, sir. Which department do you want? Er . . . what is the money for?
B: I want to (2) a flat.
A
: Just a moment. Oh yes, Mr Sharma is free.
2 :A Good morning, Iam interested ni shares of NewCom.
B
: Oh yes. Just amoment. Isee that hte price si quite high at hte moment.
A: I don't want to buy expensive shares and sell them for less.
I don't want to make a(n) (3)
B
: I understand. AllTech looks good today. The (4) for their
shares is not so high at the moment.
A
: That sounds interesting. I want to make a(n) (5). - with this
investment.

Speaking 11 Work ni pairs. Discuss these questions. Gvie details.

1 Do y o u pay rent or d o y o u own a flat?
2 Do you have a mortgage? Do you pay interest on it?
3 Do you get interest on your current account?
4 Do you make investments?

Money matters 1 7
 Banks and building societies
Vocabulary Match words 1-6 to definitions a-f.
merger a) you use money in this account every day
2 t a k e o v e r bid b) two companie s become one company
3 pension c) you save money in this account over a long time
4 current account d) one company tries to buy another company
5 deposit account e) a special bank for deposit accounts and mortgages
6 building society f you save this money for when you stop working
Listening 2 g 03 Listen to three conversations and match speakers 1-3 to the financial
institutions they work in A-C.

Nationwide
HS
BC

retailbank building society i n v e s t m e n tb a n k

Work in pairs. Look at activities 1-9 below. Discuss which activities the
institutions in 2 do. You can match some activities to more than one type of
financial institution.
1 arrange mergers _ 6 give financial advice to
2 help customers save for companies
pensions - 7 take deposits from customers
3 a r r a n g e t a k e o v e r bids 8 help companies sell their shares
4 offer c u r r e n t a c c o u n t s 9 offer special deposit accounts
5 mostly a r r a n g e m o r t g a g e s
4 6g 04 Listen to three experts and check your answers ni 3.
Speaking 5 List some examples of the institutions in 2. Then work in pairs and compare
your lists. Do any names appear on both lists?
Language

Present simple with adverbs of frequency and time expressions

W
e use the present simple with adverbs of frequency and time / often give financial advice ot companies.
expressions to say how often something happens.
Adverbs of frequency (e.g. usually, mostly, often, sometimes I am rarely late to work.
seldom, rarely, never) come after the verb be and before other verbs He never arranges takeover bids
Time expressions (e.g. every day/week/month, in the morning/ e advise customers from Monday to Friday.
W
afternoon/evening, on Monday, from Monday to Friday) come at I open accounts for customers every day.
the beginning or end of the sentence.

6 Write five sentences about one of the institutions ni .2 Then read them to a
partner and ask him/her to guess the institution.
They usually/mostly/never ...

8 Money m a t t e r s
 Vocabulary 7 What are these people doing? Match sentences 1-8 to illustrations A-H.
Do you How do I pay the How much does
want to money back? the flat cost?
deposit this
in your
current
account?

How much interest does

the deposit account pay?

What kind of What kind of

account do insurance do
you need? you need?

1 They are talking about a mortgage.

2 e is opening his safety deposit box.
H
3 They are talking about interest on savings.
4 She is withdrawing money from her account.
5 They are discussing insurance.
6 She is depositing money into her account.
7 They are talking about the terms of a loan.
8 He is opening an account.
Language

Present continuous
We use the present continuous to talk about actions He's opening a current account at the moment.
happening now, at the moment of speaking Is he withdrawing money from his account?
We often use ti with time words such as now, right Yes, he is./No, he isn't.
now, currently or at the moment.
We don't use stative verbs (e.g. like, know, want) in I don't need a current account at the moment.
the present continuous.

8 Read this part of an advertisement for Heart of Gold Building Society. Complete
it with the correct present simple or present continuous form of the verbs
in b r a c k e t s .

This is why we always (1) (offer) the best (7) - (be) important. We (8)
interest rates to our customers. We (2) (arrange) special terms now for first-time
(want) to give you the profits. At the moment we customers. We (9) - (believe) our products
(3) - (offer) special current accounts are just what you need. So what (10)
and deposit accounts to new customers. We (you / wait) for? We (11) - (be) here to
also (4) - (know) that many customers help you. Our doors (12) (be) open from
(5) - (want) to buy a house or flat. That is 8 to 5 Monday to Friday.
why we (6) - (feel) that loans for housing

Writing 9 Write a short paragraph describing what an institution you use offers and what
is happening there at the moment.
y local building society offers very good mortgage deals. At the moment they are
M
charging four percent interest.
Money m a t t e r s 9
 Investment banks
Vocabulary 1 What do investment banks do? Match phrases 1-5 to definitions a-e.
issue shares a) work against someone trying to buy
a company
2 fight takeover bids b) h e l p s o m e o n e with money a n d
investments
3 raise capital c) offer parts of a company to investors
4 underwrite securities d) get money to run a business
5 give financial advice e) arrange to sell shares to investors
and to guarantee a minimum price
2 Complete these sentences with the words in the box.

acquisition analyst Brokerage Department buyout investment fund

IPO merger stock market strategic planning
1 A(n) stands for 'initial public offering'. It si the first time a
company sells its shares to investors.
2 Acompany does so it is ready for the future.
3 The is the section of a bank which buys and sells shares for
customers.
4 A(n) happens when a company or person buys another business.
This is also called a n )
5 A(n) - - is a fund which takes money from all its clients and invests it.
6 A(n) - - looks at information a n d d e c i d e s what to d o with it.
7 When two companies join together to make one, this is a n )
8 People buy shares on the .

Language

Definite article (the), indefinite article (a, an) and zero article
We use the before groups and nationalities or when The British don't generally use pre-paid credit cards.
there is only o n e of something.
We use a(n) before a job or place of work, and to talk I'm a mortgage adviser. What do you do?
about something or someone that is part of a group.
We use no article before company names, days, Shoba has an interview at HSBC on Wednesday.
m o n t h s a n d years, a n d before plural nouns, to talk about
something in general.

3 Complete these sentences with a, an, hte or no article (-).

1 Do you have 4 Do you know what _ interest
current account? rate is this week on loans?
2 What. _ accounts does 5 Is there investment bank
your bank offer? in your town/city?
3 Is there - ATM in your 6 Why does a customer need
bank? - standing order?
Speak ing 4 Work ni pairs. Discuss the questions ni .3

Money matters
 Review
Listening 1 6 g 05 Listen and match speakers 1-7 to activities a-h. There is one
extra activity.
a) opening a deposit account
b) getting a safety deposit box
c) a r r a n g i n g a b u y o u t -
d) fighting a takeover bid
e) asking about a mortgage
f asking about strategic planning -
g) asking about a current account
h) thinking about an IPO -
Language 2 Complete these sentences with the correct present simple or present
c o n t i n u o u s form of the v e r b s in brackets.
1 In my job l - (give) advice to clients about mortgages.
2 Building societies - (usually / not offer) current accounts.
3 TodayI (give) financial advice to a new client.
4 Mr and Mrs Smith (want) to buy aflat this year.
5 What - (you / like) about your job at the bank?
6 O u r bank _ - (be) open from 8 to 5.
7 This w ee k we ( i s s u e ) s h a r e s for a client and we (sell)
them on the stock market.
8 He_ - (usually / help) customers with mortgages.
3 Complete these sentences with a, an, the or no article (-).
1 He is - analyst at i n v e s t m e n t bank in London.
2 She works in _ - Brokerage Department at - Atlantic Bank.
3 They are _ i n v e s t m e n t bankers.
4 We work at - building society in Vienna.
5 job l have ni Dubai is great.
Vocabulary 4 Match 1-6 to a-f to make sentences.
1 Retail banks always a) withdraw money from the ATM.
2 In s o m e c o u n t r i e s banks n e v e r b) give a d v i c e to companies.
3 Inves tment banks usually c) offer cheques to customers.
Companies sometimes d) offer current accounts.
5 C u s t o m e r s often e) offer mortgages.
6 Building societies mostly f) make takeover bids.
Speaking 5 , look at
Work in pairs. Student A, look at the information on this page. Student B
the information on page 70. Follow the instructions.
Student A
You are a customer. You hear that the building societies Homemaker and Save
and Build are merging. Ask Student B, a Homemaker employee, for details.
6 Work in pairs. Answer this question using adverbs of frequency and time
expressions.
What sort of things do you do in your job?
In my job I always/never/mostly ...

Money m a t t e r s 1 11
 • find o u t w h a ta customerneeds a n d

Productsi n give advi ce

2 • give a n d check instructions

r e t a i l b a n k i n g •express present and future ability
• t a l ka b o u tt h efuture

• compare details of products

Bank products
Listening 1 A bank clerk is helping a new customer to open an account. Work in pairs.
Which of these phrases do you expect to hear in the conversation?
use the cash dispenser 6 arrange direct debits
• deposit money _ set up standing orders
3 I receive your salary by 8 • g e t a bank card
direct deposit 9 open a current account
4 make w i t h d r a w a l s 10 get a s t a t e m e n t of a c c o u n t
5 pay bills
2 106Read the phrases in l again. Listen to the conversation and tick / the
phrases you hear.
3 Listen again and answer these questions.
1 Why does the customer need an account?
2 How can she receive her salary?
How can she pay her bills?
4 Where can she make w i t h d r a w a l s ?
5 Does she decide to open an account?
Vocabulary 4 Match words and phrases 1-5 to definitions a-e.
1 direct deposit a) quantity
2 s t a t e m e n t of a c c o u n t b) a document that shows the activity
in your account
3 amount c) a card you use to withdraw cash at
the cash dispenser
cash dispenser = 4 bank card d) money put into an account
ATM
5 deposit e) a way to receive your salary directly
Language

Modals for ability and possibility: can

We use can + infinitive to talk about possibility or ability Can you help me?
in the present. I can't right now. Can you wait a minute?
No, I'm afraid / can't.

12 2 Products in retail banking

 5 Work ni pairs. Ask and answer questions about this product using can or can't
:ACan I get monthly statements online with this account?
B: Yes, you can.

Features of t h e Special Saver account:

get monthly statement online make withdrawals at any time
u s e c a s h d i s p e n s e r 24/7 set up standing orders
make deposits on Sundays set up direct debits
receive salary by direct deposit get monthly statements by post

Reading 6 Read the c u s t o m e r information from the w e b s i t e of a bank. Are t h e s e s e n t e n c e s

true (T), false (F) or is there no information ni the text (NI)?
1 The bank offers current and deposit accounts, and loans.
2 You can get a safe deposit box.
3 You c a n e a r n interest with a c u r r e n t a c c o u n t . _
4 You can talk to an expert about your financial needs.
5 Customers can only use cash dispensers at the bank.
6 You receive statements by post once a month. _
7 You can only get short-term loans at this bank. .
You need a bank card to withdraw money from the cash dispenser. —

UniversalB a n k
We are a full service bank and offer products to both large For people who want to save money, we suggest a deposit
and small customers. For people who want to regularly account. With this account you can save money for the
deposit and withdraw money, we suggest opening a current future and earn interest on it. We have both long-term and
account with us. You can receive your salary through direct short-term deposit accounts. You can decide.
deposit and pay your bills through direct debit. With your
And when you need to borrow money, you can come to
bank card you can withdraw money from cash dispensers
us. We arrange long-term or short-term loans. Whatever
everywhere and at any time. You can also get your
statements of account from the machines at the bank so
your financial needs are, we are here to help. Talk to one
of our experts today!
you know how much money you have in your account.

Language

Making suggestions and recommendations

Finding out what a customer needs Can I help you?
Do you need ot withdraw money?
Would you like ot see your account online?
Giving a customer advice / suggest/recommend a deposit account.
I suggest/recommend opening a current account.
Then you need a standing order.

7 Work ni pairs. Take turns ot ask acustomer questions and make suggestions
based on the customer information in 6.
Do you need to deposit money regularly into your account?
Then I suggest a current account.
Speaking 8 , look ta
Work ni pairs. Student ,Alook at hte information on page 68. Student B
the information on page 70. Follow the instructions.
Produ cts in retail bankin g 2
13
 Online banking
Vocabulary 1 Look at Sven Johnson's online banking account. What can he do online? Match
1-6 to A-F.
1 change an amount 4 make a payment
2 c h e c k h o w m u c h money he 5 m o v e funds from o n e account to
has another
3 look at a m o u n t s received 6 print out the page
0 0 0

S v e nJ o h n s o n

• account details • sort code • payments to account

• account number B • balance payments from account

• current accounts D u p d a t e standing orders F transfer money

• depo sit acco unts u p d a t e direct debits © change a payment
• view statement • pay a bill • personal loans

2 Look at this online banking web page. Then complete the sentences below with
words from the web page.

Become an online banking customer today! Discover how easy online banking is!
With online banking you will be able to:
* view your transactions. * make payments.
* keep track of your money. * manage standing orders and direct debits.
* download and print your statements. * transfer money.
* check your real-time balance. * choose your own password.

1 The amount of money in your account is your

2 When you regularly check how much money is in your account, you
- of your money.
3 When you move money from one account to another, you . it.
4 With online banking you can the transactions you make
straight away.
5 You c a n your regular payments like direct debits and standing orders.
6 You can - your statements of account to your computer.
7 When you have bills to pay, you can make _ _ online.

Language

Future possibility and ability with will and be able to

We use will + b e able to + infinitive to say that You will be able to transfer money from one account
something will be possible or someone will have the to another.
ability to do something in the future.
We use will + subject + be able to + infinitive for Will he be able to download his statements?
questions, and will not or won't + be able to + Yes, he will./No, he won't.
infinitive for negative sentences.
After will, we use be able to (not can/can't). You w o n ' t b e a b l e to view a n o t h e r p e r s o n ' s accounts.

14 2 P r o d u c t s i n retail banking
 Speaking 3 Work in pairs. Take turns being the customer and the bank employee. Ask
and answer three questions about what you will be able to do with an online
banking account.
:A Will I be able to borrow money?
: No, you won't.
B
:A Will I be able to see my statements?
B: Yes, you will.
Reading 4 Work in pairs. Put the words in the box together and complete these online
banking tips.

act ance bal but fer ion ment pass state ton trans word

0 0 0

Tips for online banking

• Click on the (1) for your account.
• Choose the (2) you want to take.
T y p e in the amount of money that you want to
(3)

• Do not let anyone see your (4)

• Check your (5) t o make sure it is correct.
• Print out your (6) o f account.

Language

The imperative
Imperative verbs do not have a subject. The sentence Click on the button.
begins with a verb. Don't let anyone see your password.

5 Write three more online banking tips. Begin each one with an imperative verb.
Writing
Speaking 6 Work ni pairs. Take turns to give each other advice on using the online banking
w e b p a g e in 1 on page 14.
: I want to change a monthly payment.
A
: Click on 'update standing orders' and change hte amount.
B
1 I need to pay my tax.
2 I want to check how much money I have.
3 I want to take money from my current account and put ti n
i my
savings account.
I need a copy of my statement on my computer.
5 I need a paper copy of my statement.
6 I give money to charity every month. I want to give more.

Products i n retail banking 2 15

 Telephone helplines
Listening 1 3 0 7Listen to a conversation between an online banking customer and a
customer adviser and answer these questions.
1 What problem does Mr Chatterjee have?
2 What does he need to provide to the bank representative?

3 How can he see the page for his account?

4 On the 'Proceed' page, what does the information on the right ask?
5 How can he see his statement?
6 What does Mr Chatterjee do at the end?
7 What does the bank representative tell Mr Chatterjee to do the next time
he has a problem?
Language

Sequencers
Use first, next, now, then, after that, at the end First log ni ot your account. Next click on the action. Now
or finally to indicate a sequence of actions or type ni an amount. Then press 'Enter! After that you can
instructions. see your new balance. Finally you can log out.

Writing 2 You are training a customer adviser for the helpline. Write these notes ni the
correct order for a new employee. Use sequencing words and the imperative.
First say the name . . . . Then ….

* What does hte customer need?

* Goodbue.
* This is what you do.
* customer's name and account number
* sI everything clear?
* name of bank

Speaking 3 Work in pairs. Student A, look at the information on this page. Student B, look at
the information on page 70. Follow the instructions.

Student A
1 You are an online banking helpdesk representative. Explain to a customer
how to transfer money from an online account using the information below.
2 Swap roles. Listen to Student B and take notes.

1 log in - password 4 type ni amount

2 choose action - 'Transfer' 5 click 'Enter'
3 type in name, account number 6 log out

16 2 Products in retail banking

 Reading 4 Read this leaflet. Who si the course for?
a) m a n a g e r s
b) c u s t o m e r a d v i s e r s
c) all bank employees

In-company telephone training

Learn how ot help customers no eht phone.
On this two-day course you wil:
• practise finding tuo what customers need
• find out how ot give them information htey want.
• learn how ot give good customer service.
A
t the end fo the course you wil be able ot help customers with all
their needs. The course wlli take palce on Tuesday and Wednesday,
from 9 a.m. to 5 pm
..
Language

Future f o r m s
We use will to make predictions and talk about The course will take place on Tuesday.
decisions made at the time of speaking and We won't be in the office on Wednesday.
timetabled events.
We use the present continuous and b e going Our team is travelling to the conference tomorrow morning.
to + infinitive to talk about plans or intentions. You are going to practise finding out what customers need.

5 Jan has decided to take the telephone training course. Complete her email
using will, be going to or the present continuous.
0 0 0

Hi Latifa,
Our company (1) - (offer) a telephone training course next week and I
(2) (take) part in it. I think it (3) (be) very interesting. I hope I
(4) - (learn) more about customer service ni this course. tI is not always easy
ot talk ot customers on the phone. But I think at the end I (5) - (be) able ot
help customers with different problems. We (6) - (have) the training here at the
company, so I (7) - (not be) at my desk on Tuesday. I(8) - (tell) you
al about ti at lunch on Wednesday. See you then.
Best,
Jan

Speaking 6 Work ni pairs. You are going on atelephone training course. Look at the email ni
5 and answer these questions.
1 When will the course take place?
2 What are you going to learn?
t the end of the course, what will you be able to do?
3 A
7Work ni pairs. Imagine your company si going to offer a course ni telephone
skills. What would you like to learn? Discuss.
Products in retail banking 2
zi
 Comparing products
Vocabulary 1 Read this extract from the UBE Bank website and match words and phrases 1-7
to definitions a-g.
0 0 0

Banks offer (1) convenient (2) access ot funds as well as facilities like overdrafts
and (3) long-term loans. An (4) overdraft is usually more (5) expensive than a loan
but easier to arrange. At UBE we believe we offer the most competitive products
and the best service. Please click here to see our list of (6) fees and charges, and
the current (7) interest rates for savings and loans.

a) the ability to use your money - e) costing a lot of money

b) easy f) rates for borrowing or saving -
c) prices of bank services g) a negative balance on the
d) lasting for a long period of time - account

Language

Comparative and superlative adjectives

Adjective Comparative Superlative
One- and most two-syllable adjectives easy easier (than) the easiest
Two or more syllable adjectives expensive more/less expensive the most/least
(than) expensiv e
Irregular adjectives 900d better (than) the best
bad worse (than) the worst
Al adjectives high (not) as high as

2 Complete these sentences with the comparative or superlative form of the

adjectives in brackets.
1 An overdraft is - (expensive) way to borrow money.
2 Online banking si - - (easy) going to the bank.
3 This is - (high) rate you can get.
4 An ATM is - (convenient) waiting at the bank.
5 The fees and charges for a mortgage at the building society are
(low) the ones at the bank.
Speaking 3 Work in pairs. Compare the products in the box. Use the language ni the
Language box and the words ni this table.

current account deposit account mortgage

online banking overdraft facility short-term loan
Adjectives Other words
convenient nanage money
expensive Iccess ot funds
easy-to-use interest rate
complicated password
common keep track of
necessary set up
An overdraft is more convenient than a short-term loan but it is more expensive.

81 2 P r o d u c t s i n retail banking
 Review
Language 1 Look at these minutes from ameeting and write a memo giving instructions to
customer advisers. Use the imperative.

tIis a db a dieaot gvie ruoy employee password ot anyone .esle

2 tI is adoog dieaot keep ruoy companyDI cadr ina safe place
3 tI is a goodd ieaot bepolite to customers.
4 It is a bad aedi ot ofgret a customer's name.

2 Match 1-5 to a-e to make instructions on how to use online banking. Then put
the i n s t r u c t i o n s in t h e c o r r e c t order.
1 After that you can transfer a) different actions you can
money choose from.
2 • Then look at the b) log out.
3 1 First log in c) on the one you want.
4 • Finally remember to d) with your password.
5 • Next click e) or change standing orders,
for example.

3 Complete this email using will or be going to.

0 9 0

I have big plans for next week. tI (1) - (be) very exciting because | (2)
(learn) to use English for our telephone helpline. I hope I (3) - - (not have) any
problems understanding the people who call. My hours (4) (be) from 8 to 5. I think I
(5) - (answer) questions about cash dispensers, online banking and our banking hours.
I hope I (6) - (not forget) anything important. M
y boss (7) - (help) me at the
beginning. After that I hope I (8) - (be) able to do everything perfectly!

Writing 4 Complete this email to aclient. Compare the following:

1 arranging an overdraft with arranging a loan
2 an overdraft facility with a long-term loan and a short-term loan
3 online banking with waiting at the bank
4 interest rates for deposit accounts with interest rates for current accounts
A n 0

Dear Customer,
Thank you for your email. Here are my answers to your four questions:
1 Is it easy to arrange an overdraft?
Yes, ti is. It is
21 Is an overdraft facility expensive?
Yes, ti is. It is the
3 Is online banking convenient?
It certainly is. It is
4 Are interest rates high for deposit accounts?
Yes, they are. We offer much _ - •

I hope this information will help you.

Kind regards,

Products i n retail banking 2 19

 • a s k f o r a n d give information using
Personal modals a n dconditionalforms
• complete an application form
3 l o a n sa n d • offer options
• agree and disagree politely
credit • explain and answer questions about
t h e t e r m s o f l o a n s a n d mortgages

Credit a n d d e b i t c a r d s

V
IS
A

Speaking 1 Work ni pairs. Look at the cards ni the photo and discuss these questions.
1 What a r e t h e s e c a r d s for?
APR = annual
percentage rate
2 Which one(s) do you have?
(the rate of interest
3 Does your bank issue them?
4 Do other institutions issue them?
per year)
5 Do you know how much the APR is on credit cards?
6 fI you don't have a credit card, why not?
I have/don't have a(n) . . . because . . .
I use my card to …
Vocabulary 2 Work in pairs. Match definitions 1-9 to the words and phrases in the 'magic
table'. Write a number in each box. When you finish, the columns and rows will
all add up to 15.
1 what you pay to borrow money from a bank or other financial institution
2 give someone money for a fixed time
3 a decision about how safe ti si to lend money to a person or company
4 the maximum amount of money that you can spend with a single
credit card
5 how you have to pay money back to a bank
6 when you buy something now and pay for ti later
7 when you do not pay an amount you borrowed right away but later
8 the lowest amount that you can repay when you buy things on credit
9 take money directly out of a bank account

credit carry abalance • lend money = 51

interest repayment terms • debti = 15

minimum payment credit rating • credit m
ilti = 51
= 51 = 15 = 51

02 3 P e r s o n a ll o a n sa n dc r e d i t
 Reading 3 Work ni pairs. Read this information from a bank's intranet. Take turns to
choose a word or phrase from the text and explain ti to your partner. Your
partner g u e s s e s what it is.
A
: the lowest amount customers can pay when they owe money on a credit card
B: m i n i m u m p a y m e n t

Credit Debit c a r d s
Credit is a lending agreement between a • The customer pays in full every time he
c u s t o m e r a n d a bank. or s h e uses the card.
How we lend money to customers: • The customer can use the card at an
• We give them cash. ATM or point-of-sale terminal.
• We make a transfer to their account.
Multi-function cards
• We issue a credit card. The customer can use the card at an ATM,
point-of-sale terminal or as a credit card.
Creditcards
credit limit: the maximum amount that a Credit rating
customer can spend
• Can the customer pay the money back?
The bank uses the credit rating to
Repayment terms decide.
C u s t o m e r s can:
• The bank uses the credit rating to set
• make the minimum payment. the credit limit.
• carry a balance to the next month and
pay interest.
• pay the full balance (by direct debit) and
n o interest.

Language

Zero conditional
We use the zero conditiona l to talk about general They only pay interest if/when they carry a balance.
truths. We form zero conditional s e n t e n c e s with if/when
+ present simple + present simple.
The if clause can come before or after the main clause If they pay the minimum balance, they carry the rest.
ni the sentence. When ti comes at the beginning, we put e don't charge interest fi they pay the whole amount.
W
a c o m m a a f t e r it.

4 Match 1-5 to a-e to make zero conditional sentences.

1 fI you pay your balance at a) we take the money from your
the end of the month, accoun t.
2 Do you use a credit card b) they pay interest on it.
3 fI you use a debit card, c) a customer doesn't pay the
4 If a c u s t o m e r c a r r i e s a whole a m o u n t at once.
b a l a n c e over, d) when you go shopping?
5 We charge interest fi e) we d o not charge interest.

Speaking 5 Work in pairs. Discuss these questions.

1 What happens if you have a credit card and you only make the minimum
paymen t every month?
2 What happens if you carry a balance on your credit card?
3 How much does the customer pay fi they use a debit card?
4 What happens fi a customer does not have a good credit rating?

Personal l o a n s a n dc r e d i t 3 12
 Pla stic m o n e y
Reading 1 Complete this leaflet about a new multi-function card with words from the
magic table on page 20.

Do you travel the world? Does shopping everywhere sound interesting ot you? Then
call us ot find out about our new multi-function Champion (1). - Card!

fI you have a Champion card, you:

• can pay for food, a hotel room, a concert ticket or rent a car without cash.
• can choose the (2) - - option and pay for purchases immediately.
• can withdraw money from cash dispensers around the world.
• can arrange a(n) (3) - —with your bank.
• can carry a(n) (4) - - over from one month to the next.

• will get a bill every month, which shows how much (5) - you have
to pay.
• can choose your (6) - - and decide exactly how you want ot pay back
your credit.
T
o find out more about this great offer, just ask your bank about our card.

Listening 2 Cg 08 Listen to a radio spot and check your answers in .1

Language

First conditional
We use the first conditional to talk about something If you have a Champion card, you will get travel
that might happen ni the future, as a result of a possible insurance.
action or situation. We form first conditional sentences If you have a Champion card, you can pay for a hotel.
with if + present simple + will/can/may + infinitive.
The if clause can come before or after the main clause You will not have any problems with online shopping if
in the sentence. When ti comes at the beginning, we put you have a Champion card.
a c o m m a after it. If you have a Champion card, you will not have any
problems with online shopping.

3 Put t h e s e w o r d s in t h e c o r r e c t o r d e r to m a k e first c o n d i t i o n a l sentences.

Start with the w o r d in bold a n d a d d c o m m a s w h e r e necessary.
1 you / if / at the bank this afternoon / are / see / 1/ you / will
my credit card / if / lose / l / call / l / the bank / right away / will
3 a multi-function card / she / if / has / can / she / from an ATM /
mo ney / w i t h d r a w
4 easy to shop online / be / it / will / have / you / a credit card / fi
5 get / you / can / travel insurance / a Champion card / fi / have / you
6 a Champion card / may need / he / to use ATMs / around the world /
he / wants / fi
Speaking 4 Work ni pairs. What can you do with the Champion card? Discuss. Use the
first conditional.
If I have this card, I can/will ...
You may ... if . . .

22 3 P e r s o n a ll o a n s a n dc r e d i t
 Listening 5 0 9 Listen to two conversations and number these sentences and phrases
in the order you hear them. Write a number n
i each box.
That's not a bad idea. - • I see your point. -
I c o u l d n ' t a g r e e more. • Yes, but ...
It is out of the question . . .
6 Do we use the sentences and phrases in 5 to agree (A) or disagree (D)? Write
A or D on the lines in 5.

Speaking 7 Work in pairs. Look at the leaflet in 1on page 22 again and discuss which three
points are most important to you. Use phrases for agreeing and disagreeing.

Reading 8 Complete this FAQ web page with questions a-e.

a) How can I add money to the card? d) Why is it useful?
FAQ = frequently b) Who is it for? e) What does it cost?
asked questions
c) How can I get it?
0 0 0
ADGE
m

T h eC h a m p i o nY o u t hP r e - P a i dC a r d
(1)
The benefits of the card: The card is not expensive.
• You d o n o t n e e d a b a n k a c c o u n t or • The card costs €20 a year. KRB
credit rating. • A replacement card is free.
• fI you lose the card, you can transfer • You pay only €3.50 to withdraw cash. CASHI
the amount left on it to a new card. (4)
• You can use it at point-of-sale It is easy to put money on the card.
terminals all over the world. • Do this directly at your bank from any
• You can withdraw cash from ATMs of your accounts.
everywhere. • Make transfers to the card online.
(2) • Your parents can load money onto
This card is for you if: the card.
• you do not have your own bank
account. Come and talk to us at the bank.
• you want to shop online. • Fill out the form and load your new
• you need a card for a trip. card with the amount you want.
• Go to our website, fill out the form
and order the card online.

Vocabulary 9 Work ni pairs. Look at the web page ni 8 again and match these definitions with
the underlined words.
1 journey 6 put money on a card
2 something that you don't 7 complete a form with
pay for information
3 something that takes the place of 8 a machine ni a shop where you pay
something else with a card and PNI code
4 move money from an account 9 request something -
to another 10 buy things over the internet
5 cash dispenser
Speaking 10 Work in pairs or small groups. Look at the web page ni 8 again and discuss
these questions. Use conditional sentences where possible.
1 What happens fi you lose the card?
2 How can you order the card online?
3 How can you put money on the card?
4 Where can you use the card?
5 What other benefits does this card have?
Personal loansand credit 3 23
 Personal loans and overdrafts
Vocabulary 1 Complete these sentences with the correct form of the words and phrases in
the box. You do not need all the words/phrases.

apply for/application form authorised/authorisation cash flow

cover (overdraft/expenses) instalment in the black/in the red loan officer
overdraw/overdraft (facility) penalties/penalise
1 Every month Ben Mellor earns €1,000 but spends €1,200. He - his
account and is always
2 Ben uses his overdraft to his expenses.
fI Ben doesn't apply for an overdraft, the bank will him.
Every month, Hana Stevens earns €1,200 and spends €1,000. She has no
problems. She always stays -
5 fI she needs more money, Hana can an overdraft or personal loan.
She will agree the overdraft or loan with a(n) - at her bank. A(n)
overdraft isn't very expensive.
6 Hana pays her loan in
Listening 2 4 10 Listen to Caroline, a trainee retail banker, asking her manager some
questions about a customer's account. What is the problem and what is the
solution ?

3 Listen again and answer these questions.

1 W h e n d o e s Mr Müller o v e r d r a w his a c c o u n t ?
2 What does Mr Müller have to do to be in the black?
3 What does Mr Müller have to pay when he is over his limit?
4 Why is his overdraft expensive?
Language

Modals for obligation, necessity and prohibition

Obligation, necessity and lack of necessity He must pay interest.
He will have to pay interest on the overdraft.
He doesn't have to pay bank charges.
I n e e d to talk to you.
Prohibition He mustn't go over the limit.

4 Use these prompts to write sentences with modals.

next week / he / talk / to his boss (necessity - future)
Next week he will have to talk to his boss.
1 l/ call / the bank / about my lost credit card / (necessity - present)
2 you / usually / serve / customers in the morning / ? (obligation - present)
3 you / pay / fees / when you overdraw your account * (lack of necessity -
present)
4 he / make / an appointment with the loan officer / ? (necessity - present)
5 we / pay / penalties on our account x (lack of necessity - future)
6 he / talk / to customers in an unfriendly way. His boss is not happy with him.
x (prohibition - present)

24 3 Personal l o a n s a n d credit
 Listening 5 Caroline meets Mr Müller, the customer. Listen. Are these sentences
true (T) or false (F)?
1 Mr Müller wants to talk to Caroline about his account. (T / F)
2 He sometimes has to wait for a customer to pay him. (T / F)
3 Mr Müller has an overdraft facility to pay his bills. (T / F)
4 The interest rates on a loan are the same as on an overdraft facility. (T / F)
5 Mr Müller likes Caroline's suggestion. (T / F)
6 Mr Müller doesn't have to talk to a loan officer because Caroline has the
application form. (T / F)
6 Listen again and write sentences about what Mr Müller has to do.
Mr Müller has to pay interest on the overdraft amount.
Reading 7 Complete this checklist from a compliance officer for new employees with
must/mustn't and have to/don't have to.

To all Customer Service and Loan Officers

As you know, we have to tighten regulations, so here are some DOs and DON'Ts:
• Customer Service Officers (1) — c o n t a c t their clients once a year.
• Customer Service Officers (2) - pass on personal data about their customers.
• Customer Service Officers (3) - arrange mortgages.
• Loan Officers (4) - check credit ratings before arranging loans.
A compliance • Loan Officers (5) - regularly write reports about existing loans.
officer m a k e s sure • Loan Officers (6) - check financial documents of corporate clients once a year.
everything is done • Loan Officers (7) make sure that the customer can pay the instalments.
correctly. • Loan Officers (8) - inform the guarantor of the loan when a customer is late
A guarantor with payments.
guarantees a loan. • Loan Officers (9) approve loans before the guarantor signs the contract.

Writing 8 You are a manager and have to do end-of-year assessments for employees. You
have the information in 1-5 below from the compliance officer at the bank. Read
the checklist in 7 again and write your comments after the statements.
Stefan normally contacts his clients once a month.
Stefan d o e s n ' t h a v e to contact them once a month but h e must contact them o n c e
a year.
1 George checks financial documents of corporate clients every two years.
J u l i a sometimes checks the customers' credit ratings after
arranging loans.
3 George occasionally does not make sure that the customer can pay
the instalments.
4 Stefan sometimes gives his customers' addresses to people outside
the bank.
5 Julia occasionally forgets to write a report about an existing loan.
Speaking 9 Work in pairs. Tell Stefan, George and Julia what they need to, do not need to,
must or mustn't do.
Stefan, you don't need to contact your clients once a month but you must contact
them once a year.
10 Work in pairs. Talk about things you have/need to, do not have/need to, must or
mustn't do at your workplace or place of study.
In my job/studies I have to .... I don't need to .... I must/mustn't ....

Personal l o a n s a n d c r e d i t 3 25
 Mortgages
Speaking 1 Work in pairs. In your country, how do people get money to buy a flat or a
house? Do they borrow ti from a bank or a building society? Does this loan have
a special name or special terms? Discuss.

Reading 2 Complete this mortgage application form with hte words ni the box.
down payment (AmE) borrow collateral house or flat interest and capital
= deposit (BrE)
maturity date property valuation variable

M O R T G A G E A P P L I C AT I O N
1 The amount of the mortgage: how much do you want to .
2 You will need to make a deposit. What can you arrange as. _for the bank
t o have s o m e security?
3 Why you need the money: are you buying a(n)
4 When will the (4) _ be - in 25 or 30 years?
5 Do you want a fixed interest rate or a(n) - .interest rate?
6 Do you want to pay interest only or
7 Do you want to have a(n) - ?

FORSALE
3 Look at the application form n
i 2 again. Are these sentences true (T) or false (F)?
1 Customers may not choose the maturity date of the mortgage. T ( / F)
( / F)
2 Customers may choose variable or fixed rates. T
3 Customers may not arrange to pay interest only. (T / F)
4 Customers may arrange to have a property valuation. (T / F)
Customers have to give the bank something as security to get a loan. T
( / F)
Language

Modals for possibility and permission

We use may or might + infinitive ot talk about possibility We may talk to our banker about a mortgage.
in the present or future. He might not get the mortgage. tI is not certain.
We use may + infinitive to talk about permission. Customers may choose their methods of payment.
We use may or can l/we + infinitive to ask for permission Can I speak to you?
and may not + infinitive to refuse permission. You may not overdraw your account.

4 Complete this conversation between a client (C) and a financial adviser (FA)
with modal verbs from the Language box.

FA: (1)cw
doulkiel ot bory,
C: We would like to borrow a large amount of money - about €175,000.

C: We don't have much money but w e want to buy a flat.

A: Without a deposit, a building s o c i e t y (2) - give you a mortgage.
lowever, abank or building society ( 3 ) - _ lend you up
to €100,000 without one.
:C A€100,000 mortgage? That (4) be enough to buy a flat.
FA: You (5) borrow more than you can pay back, I'm afraid.
C: Can you email us more details?
FA: Certainly. (6) I have your email address, please?
Speaking 5 Work ni pairs. Talk about the pros and cons ni the application form ni .2
If a customer arranges a mortgage with us, he or she may ...

26 3 Personal loans a n d credit

 Review
Language 1 Choose the correct words in italics.
1 Iflspend / will spend too much money, I will not be able to pay it back.
2 fI you have a pre-paid card, you must / can pay for different things with it.
3 When I need money in another country, I look / will look for a cash dispenser.
4 I will call the credit card company if I have / will have questions about my bill.
5 Can you use a debit card when you are / will be in another country?
2 Complete these sentences with modal verbs.
1 If you borrow money to buy a house, you - - pay it back every month.
(obligation)
2 Customers who have a mortgage with us _ - c h o o s e fixed or variable
interest rates. (permission)
3 A short-term loan be cheaper than an overdraft. (possibility)
4 You _ decide today about the loan. (lack of necessity)
Vocabulary 3 Match 1-7 to a-g to make word partnerships.
1 apply a) a balance
2 withdraw b) online
3 choose c) for a loan
4 shop d) money
5 set e) money onto a pre-paid card
6 carry f) a credit limit
7 load g a variab le interes t rate

4 Complete these sentences with the word partnerships from 3.

1 I may use my card to - -and buy goods from a website.
2 With my PIN code and my multi-function card I can
cash dispensers everywhere.
3 tI is cheaper fi you don't - from one m o n t h to the next but
choose the debit option.
4 The bank uses the credit rating to . for a customer.
5 Parents can for their children to take with them when they
travel.
6 When customers arrange a mortgage, they can o r a fixed
interest rate.
7 If you need money, you can at your bank.
Speaking 5 Work ni pairs. Student A, look at the information on this page. Student B, look at
the information on page 71. Follow the instructions.
Student A
1 You work in banking. Student B wants to apply for a mortgage. Look at A and
ask questions to get the information you need to fill in the form.
2 Swap roles. You want to apply for a credit card. Student B is the banker.
Look at B and answer Student B's questions.

Type of property: 1,800

Cost of property: • monthly salary:m£ake purchases no the internet
Amount of deposit: d,
• travel abroa nt countries
e ATMs ni differe
Collateral: - • would like ot us insurance
with
Maturity date: • want acard
o t a
cry a balance
Interest (fixed or variable): • want
d money onot card
Interest only or capital and interest? • would like ot loa

Personalloansa n dcredit 3 27
 • explain the regulations of Islamic banking
Islamic • talk about past habits using used t o

4 banking
• express what y o u were trying t o d o
• explain different products found i n
Islamic banking
• compare Islamic and non-Islamic banking

The basics of Islamic banking

Speaking 1 Work in pairs. Are the sentences in this quiz true (T) or false (F)? Discuss.
Give a reason for your answers.
I think this is true/correct/ incorrect because . .
I am not sure but I think …

. . . .. .

The first Islamic bank opened m o r e than 5 Islamic b a n k s c a n n o t i n v e s t in c o m p a n i e s

1,000 years ago. (T / F) which sell prohibited food products. (T / F)
2 Islamic banking customers do not have t o 6 Customers of Islamic banks cannot borrow
pay interest on money they borrow. (T / F) o r lend money. (T / F)
You have t o b e Muslim t o u s e a n Islamic People who follow the laws of Islamic
bank. ( T / F) banking cannot make a profit. (T / F)
A Shariah board must govern the Islamic Islamic banks must give part of their profits
section of the bank. (T / F) t o help poor people. (T / F)

Reading 2 Your bank has just opened an Islamic department. You are attending a seminar
on the Islamic sector. Read this text and check your answers in .1

Facts about Islamic banking

The concept of Islamic banking started during Ethical values are important at Islamic banks.
the time of the prophet Muhammad (PBUH) Banks may not do business with companies
and grew from the idea of Riba. This meant which sell prohibited food products. Islamic
that people could not earn money fi they lent banks offer the same standard products as
money to others. The first Islamic bank began non-Islamic banks. These include savings
to operate in 1963 in Egypt. Later, in 1975, the accounts and loans. However, an Islamic bank
first modern Islamic commercial bank opened does not charge interest and customers do
in Dubai. Now there are Islamic banks all over not earn it on savings. Instead, banks give a
the world. gift to customers who have accounts. This is
Islamic banking follows the laws of Shari'ah called 'Hibah' and represents part of the profits
(Islamic law). Banks may not charge interest on made by the bank. Islamic law does not restrict
loans. Islamic banking is not only for Muslims - trade, and customers can make profits when
a n y o n e c a n u s e a b a n k which follows t h e s e they invest. Another important aspect of Islamic
laws. Banks can create one section to deal with banking is to give money to help others. Islamic
Islamic banking but they must have a Shari'ah banks must donate part of their profits to a
supervisory board to make sure the section Zakat Fund. This fund helps poor people.
follows all the laws.

28 4 Islamic banking
 Langua ge

Past simple
We use the past simple to talk about events and The idea of Islamic banking started during the time of the
situations that started and finished ni the past. prophet Muhammad (PBUH).
Did they borrow money from the bank?
No, they didn't borrow any money.
Irregular verbs have their own forms. An Islamic bank began to operate in Dubai in 1976.

Listening 3 12 Complete this lecture transcript with the correct past simple form of
the verbs in brackets. Then listen and check your answers.

Good afternoon, everyone. How much (1) (you / know) about

Islamic banking before the seminar this morning? Now you are going to
h e a r about our new section for Islamic banking. The idea for interest-free
banking (2) - (begin) during the time of the prophet Muhammad.
People (3) (not be) allowed to charge or receive interest. However,
for years customers (4) - - (not be) able to find Islamic banks.
Many customers (5) (ask) us about interest-free banking and
other products. So we (6) _ (decide) to open a section for these
EM customers. First we (7) - (need) a Shari'ah board because the
IRA
TES banking laws (8) (have to) follow Islamic economic policies.
ISLA
MIC This board (9) - (explain) to us how everything (10)
BAN
. (work). Finally, we (11) - - (offer) our first interest-free accounts
to customers. We have many other products as well and you will hear about
t h e m in t o m o r r o w ' s s e m i n a r.

Vocabulary 4 Match 1-7 to a-g to make word partnerships. Then match the word
partnerships to definitions i-vii. Look at the texts in 2 and 3 to help you.
1 offer a) business i not allow a b u s i n e s s activity
2 follow b) trade ii) buy or sell services
3 create c) interest-free banking iii) do what the authorities tell you
to d o
4 do d) money iv) lend money but not charge for
the loan
5 charge e) one section v) receive money
6 restrict f) laws vi) start one area in a company
7 earn g) interest vii) ask for money when you lend ti
Speaking 5 Work in pairs. The seminar has finished for today. Talk about what you learnt.
Use words from 4 and from the texts in 2 and 3.
Did you know that ?.. The most interesting part for me was ...
I didn't know that ... What did you think about ...?

Islamic banking 4 29
 Islamic retail products
Language 1 Complete these index cards for a presentation about different types of Islamic bank
account with the correct form of the verbs in the boxes.

Wa d i a h Mudarabah Qard hassan

(Current and deposit accounts) (Fixed-term deposit account) (Non-profit loan)
guarantee keep earn give have invest ask give make pay
offer receive _ a loan
Banks also (1) fixed- A bank (1)
Islamic banking (D) term deposit accounts. With to a customer as goodwill. The
current and deposit accounts. The these, the customer usually borrower (2) back

bank promises to (2) (2) m o r e t h a n with a only the amount borrowed. The
the money safe for customers. normal deposit account. The bank borrower can (3) _ an
(3) - the c u s t o m e r ' s extra payment as thanks. The
It also (3) a refund
money. Then the bank bank may (4) - _ for a
of the whole amount of money fi
the c u s t o m e r s want it. Customers (4) - the customer the service charge.
- a gift call ed
profits from the investment. This
may (4)
'Hibah' for allowing the bank is called profit and loss sharing
or PLS. It can also be u s e d for
to use the funds. fI customers
overdraw their account, they have c o r p o r a t e clients as venture
to pay a fee but no interest. Both capital.
these accounts usually offer ATM
cards.

Ijarah with diminishing Ijarah Thumma Al Bai' Sukuk

Musharaka (Hire purchase) (Islamic bonds)
(Reducing partnership)
buy can lease pay invest mature
buy own pay sell prohibit receive
The bank (1) an asset
This is like a mortgage. The bank (such as a car) for a customer.
an asset (such as
As Islamic law (1) _ the
(1) The customer (2) the
paying of interest, Islamic b o n d s
a flat) and rents it to the customer asset from the bank. When this
for a certain time. The bank pay only a share of profits. The
c o n t r a c t is over, the customer
(2) the item at the bank (2) _ in an asset
buy the asset at or enterprise which earns money
beginning. Every time the customer
(3) some of the mone y a fixed price. The fixed price is and sells b o n d s which represent
back, it reduces the amount the higher than the original price ownership. When the bond
bank owns. The customer pays a because the custome r
(3) _, the person who
fixed rate for the time period and (4) - . the money back
holds the bond (4)
can (4) the property over a longer time. t h e c u r r e n t v a l u e of t h e a s s e t o r
if he or she pays the bank back enterprise, not the capital he or
first. The customer doesn't pay a
she invested.
penalty for early repayment but
has to pay about 20 percent of the
original value.

Speaking 2 Work in small groups. Look at the index cards in 1 again and answer
these questions.
1 Which products help the customer to buy something fi he or she needs money?
2 Which product helps customers to save money for a longer time?
3 Which product is an investment?
4 Which product does a customer use to buy a house or flat?
5 Which products does a customer use to manage their everyday money?
3 Now choose one account type from 1 and explain it to your group. The other
members must guess which one it is.
Customers use this account in order to ...

30 4 Islamic banking
 Vocabulary 4 Match phrases 1-8 to definitions a-h.
1 prohibit interest a) give money to someone to use
something
2 share a profit or a loss b) charge a fee
3 pay a penalty c) buy something valuable
4 purchase an asset d) make a part of something smaller
5 reduce a percentage e) say that to pay or receive interest is
not allowed
6 ask for a service charge f) divide money which was made
or l o s t
7 lease a n a s s e t g) promise to give money back
to someone
8 guarantee a refund h) give extra money to someone if you
did not follow the laws
Listening 5 C g 1 3 Abdul Farak used to use a non-Islamic bank but he is now a customer
of First Bank. Listen to Mr Farak talking about the differences and complete
this table.
Non-Islamic bank Islamic bank
Deposit account received (1) - on savings pays a(n) (4) on overdraft but
no interest
Current account • received interest earns money fi bank makes a(n)
• paid interest if he (2) his (5)
account
Loans paid interest and (3) —every month doesn't have a loan at the moment
Mortgage did not want to pay interest over a long period gave bank a(n) (6) - and bank
of time rents the house ot him
Language

Used to
We use u s e d to + infinitive to talk about actions that Before we opened this section, the customers used to
happened regularly ni the past but do not happen now. ask us about Islamic products.
We use did (not) + use to + infinitive for questions and Did you use to go o
t an Islamic bank?
negatives. No, I didn't use to go ot an Islamic bank.

6 Put the words ni the correct order to make sentences and questions.
1 W h a t did h e u s e to a s k his b a n k a b o u t ?
used to / Islamic banking / ask his bank about / products / he
2 his account / why / did / overdraw / use to / he / ?
He used to overdraw his account to pay the bills.
3 What didn't you use to know about?
use to / /1 Islamic banking / know about / didn't
4 deposit account / earn / what / did / she / use to / on / her?
She used to earn interest on her deposit account.
Speaking 7 Work ni pairs. Look at the table ni 5and make sentences about what M
r Farak
used to d o at the non-Islamic bank.
When Mr Farak went to a non-Islamic bank, he used to receive . . .
Writing 8 What did you use ot do ta school or ta work? Write three sentences. Then
c o m p a r e y o u r s e n t e n c e s with a partner.
I used to . . . but now I ...

Islamic banking 31
 Islamic corporate banking products

N E W H O T E L FINANCED
WITH MUSHARAKA
(JOINT VENTURE)
Two companies contributed to this joint
venture, which began in .

Speaking 1 Discuss the newspaper photo and headline. Why do you think two companies
financed it together? What do you know about joint ventures?

Vocabulary 2 Complete these sentences about corporate Islamic banking with the words in
the box.

contribute finance instalments lend loses middleman

purchase shares
1 Customers came to us because they were looking for a way to
a proje ct.
2 When the bank b u y s an a s s e t for a c u s t o m e r, it a c t s as a(n)
buyer 3 In a joint venture, each partner has to _ capital to the project.
Customers have to pay back the money in
middleman
Leasing is a very common way for companies to goods they need.
Banks often - money to their customers for different things.
seller
7 If a n a s s e t - value, the bank the risk
Reading 3 Read the leaflet about corporate products and answer these questions.
1 Najib buys and sells goods. Which product is best for him?
2 Leila wants to find a partner for her business. Which product is best for her?
3 Akim needs a loan to expand his business. Which product is best for him?

Musharaka (Joint venture) Murabahah (Cost plus)

• It is for business partnerships. • The bank acts as a middleman.
• Each partner contributes capital to the • The bank purchases the asset for the
project. c u s t o m e r and sells it t o the customer
• The bank and the customer share the at a higher price.
profits or losses (PLS product). • The customer pays the money back to
• It helps companies to finance projects. t h e b a n k in i n s t a l m e n t s .
• It is also risky for the bank if the asset
Mudarabah (Venture capital) loses value.
• Banks lend money to the customer for • It is a type of leasing, the most
a business. common way to purchase assets and
• The bank and the customer share the goods.
profits or losses (PLS product).
• The agreement is over when the
customer pays the money back.
T
R
SIF BANK

32 4 Islamic banking
 Listening 4 4 14 Listen to three customers talking about their needs and match speakers
1-3 to the form of financing which would be best for each customer (a-c). Use
the information in the leaflet in 3 to help you.

a) Murabahah (Cost plus) -

b) Musharaka (Joint venture)
c) Mudarabah (Venture capital)
Language

Past continuous
We use the past continuous to talk about an action or They were looking for some Islamic banking products.
situation that was in progress at a particular time in the Was he talking ot the loan adviser at 3 p.m.?
past. The action started before that time and continued Yes, he was./No, he wasn't.
after that time.
We also use the past continuous to talk about a longer I was reading this leaflet when I found this information.
action which is stopped or interrupted by a shorter action
(using when).

5 Complete these sentences with the correct past continuous form of the verbs ni
the box.

charge do help look notpay talk try work

1 _ for a new bank when I found one which offered Islamic products.
2 My old bank - very high interest on my overdraft. That is why I paid
it b a c k a n d c l o s e d t h e a c c o u n t .
3 He - his instalments back regularly, so the bank sent him a letter to
ask about the problem.
4 He_ — a customer when I came into his office.
5 What- - (you) yesterday at 1 p.m.? I phoned but you weren't in.
6 We- - to get information about Islamic products when we found an
expert to help us.
7 - to my manager when you phoned.
8 - (she) at 3 p.m. on Wednesday?
Speaking 6 Work in pairs. Write two more questions each, using the past continuous. Then
take turns asking the questions.
What were you doing at 5 p.m. yesterday?
Who were you talking to when the teacher came in today?

Islamic banking 33
 The concepts of Islamic banking
Reading 1 UBH Bank is opening a section on Islamic banking and its employees are
attending a webinar. Read their conversation and answer these questions.
1 Why couldn't Islamic customers use the normal products?
2 Why couldn't Islamic banks charge interest?
3 Why were investments as risky for the customer as for the bank?
4 What did Islamic banks have to do with some of their profits?
5 What types of companies couldn't Islamic banks invest in?

Alba: Why did we have to open a new section of the bank? Couldn't Muslim customers use
some of our products?

Kasim: No, because we had to charge them interest. This meant they were looking for
another bank to go to. We wanted to keep these customers, so we opened this
section. And some non-Muslim customers are also interested in these products.

Alba: Can you explain the background to us? How did Islamic banking begin?
Kasim: The ideas came from Islamic law. One idea is co-operation. For example, when
someone invested in a company, they made money when the company did well. fI
ti didn't do well, they lost money. This way, the investor and the company shared the
risks and the bank didn't have to pay the investor interest, only part of the profits.
Alba: I see. Anything else?
Kasim: Yes, Islamic law did not allow Riba, which is charging someone to use your money.
So Islamic banks don't charge interest, only fees.
Matthew: But aren't fees as expensive as interest for customers?
Kasim: Not usually. And other products use the PLS or 'profit and loss sharing' idea. This
m e a n s investments or savings accounts are a s risky for the customers a s for the bank.

Katja: That's interesting. Are there other important ideas?

Kasim: Oh yes. For example, when Islamic banking began, banks had to give some of their
profits to charity. We still do that today. They also have to a s s e s s their clients and
must work only with ethical ones. They are not allowed to invest in companies that
sell prohibited food products, for example.
Alba: So the ideas behind Islamic banking were not just offering interest-free accounts...

Language

Modals in the past

We use could for things we were able to or allowed to Could customers use our products?
do ni the past. No, they couldn't.
We use had to for things that were necessary and Did you have to look for a new bank?
didn't have to for things that were unnecessary. Yes, we h a d to look for a b a n k w h e r e w e d i d n ' t h a v e
to pay interest.

3 Complete these sentences with modal verbs from the Language box.
1 We - to phone our bank about the agreement. (it was necessary)
2 My clients were very happy they - _ take out an interest-free loan
with us. (were able to)
3 (you) tell him about the new products? (was ti necessary?)
4 They - pay a fee. (it was not necessary)
- the bank find another company to invest in? (was ti able to?)

34 4 Islamie banking
 Review
Vocabulary 1 Complete these sentences with the words in the box.

capital charity co-operation hire purchases refund represent sharing

1 The bank guarantees a _ of all the money customers deposit.
2 Customers
Islamic bankcan
s habuy
ve profi
t anusing
goods d lossa - products.
- purchase system.
4 Islamic b o n d s real a s s e t s or e n t e r p r i s e s .
5 The money someone puts into an investment is called
6 Islamic banks give part of their profits to
7 One very important part of Islamic banking is
8 The bank - an asset for a customer and then sells it to him or her.

2 Match words 1-6 to their opposites a-f. Then work in pairs. Take turns to make
sentences using one word from each pair.
1 borrow a) spend
2 prohibit b) withdraw
3 deposit c) loss
4 save d) pay
5 receive e) allow
6 profit f) lend
A: I deposit money into my account.
B: I need money, so I withdraw it from the ATM.
L a n g u a g e3 Read this email and choose the correct words in italics.
0 0 0

Dear Sue,
We (1) had / were having a very interesting seminar last week. Our bank opened a
new section for Islamic banking and we (2) had to / didn't have to learn about ti - the
new section is as important as the rest of the bank. Before we offered Islamic products,
customers (3) can't / couldn't get interest-free accounts. Last month some customers
(4) thought / were thinking about looking for another bank when they (5) found out /
were finding out about our new section. So they (6) stayed / were staying with us. It was
a great chance to learn about these new products. I think you wil find this interesting
as well.

Writing 4 Continue the email ni 3. Include three things that you learnt and three things
that you found really interesting.
e n e

We really learnt a lot in this seminar. For example, ...

Speaki ng 5 Work ni pairs. Student A

, look at the information on page 68. Student B
, look at
the information on page 71. Follow the instructions.

Islamic banking 4 35
 • describe t h e work i n different

T h e s t r u c t u r e • tdepartments of a bank
alk about banking jobs,
o fa bank responsibilities a n d tasks
• explain the hierarchy i n a bank
• t a l k abo ut c h a n g e

Department s
Reading
Atlantic Banking Group
B o a r d of D i r e c t o r s H u m a n Resources Retail Banking
Private Banking Corporate Banking Loan Modification
Foreign Exchange Group Accounting Internal Audit
Group Risk Client Risk Management Legal Department

1 Read this brochure about jobs in a bank. Match six of the departments above to
the employees.

(1) (4)
'I d e a l w i t h c u s t o m e r s w h o h a v e *I deal with large companies. I check
large amounts to invest. We are in on the collateral they have and I
charge of managing investment check their credit ratings to make
portfolios and giving investment sure we can lend them money.'
advice.' (Leila) (Duncan)
(2) (5)
I report directly to the Board of *We are responsible for doing the
Directors about risks within the books and preparing the financial
bank. My department prepares the documents.' (David)
annual risk report and we help to (6)
decide on future strategies. (Elke)
*I deal with exchange rates and
(3) e help
foreign currencies. W
*nI my department we are involved customers when they want to change
in creating tailor-made products and money.' (Susan)
advising corporate clients. (Grete)

Speaking 2 Work in pairs. Match the rest of the departments above to these sentences.
1 We are responsible for recruiting and training staff as well as paying
employee s.
2 Customers come here to make a bank transfer or ask a question about their
account. They can also open or close their account.
3 We help corporate customers when they have financial difficulties and take
care of modifying loans and credit lines.
4 We deal with legal problems and lawsuits.
5 We check on the work in other departments. We are in charge of making sure
everything is done correctly.
6 We are in charge of running the bank. We look at all the information and plan
long-term strategies. The managers of the other departments report to us.

36 5 T h e structureofa b a n k
 Work in pairs. Find the nouns used with these verbs in 1 and 2. Then take turns
to make questions using the verb-noun partnerships for your partner to guess
the department.

change check on create decide on do give manage

modify prepare recruit report to

A: Who creates tailor-made products?

B: Corporate Banking (does).
Language

Prepos itions
Some verbs, verb phrases and adjectives take They are in charge of managing investment portfolios.
specific prepositions (e.g. deal with, report to, He takes care of corporate customers.
look at, check on, be in charge of, take care of, I am involved in training courses.
be involved in, be responsible for). My department checks on the collateral.
Prepositions are followed by a noun, pronoun or I deal with exchange rates.
gerund. We are responsible for running the whole bank.

4 Choose the correct words in italics.

1 I take c a r e to / of t a i l o r- m a d e p r o d u c t s for c o r p o r a t e clients.
2 I am responsible to audit f o r auditing the books of the bank. I have to make
sure that everything we do is correct.
3 I help my boss with / at the preparation of financial documents for the
bank.
4 We are in charge to modify / of modifying corporate loans when customers
have cash flow problems. We help them to pay their loans back.

5 We deal with / for managing investment portfolios for wealthy customers.

6 My department is in charge to recruit / of recruiting new staff

members. We also train existing staff to help them do their jobs better.

Listening 5 • 15 Write the name of the department for each sentence in .4 Then listen
a n d check your answers.

Speaking 6 Work ni pairs. Ask your partner what he or she does, did or will do at work.
Use the verbs ni the box to help you.
audit be ni charge of be responsible for change check on
create d e a l with decide on give manage open and close
plan prepare recruit and train report to take care of

A
: What are you responsible for?
B: Im
' responsible for recruiting and training new staff.

Thestructureo fa b a n k 5 37
 The s t r u c t u r e of the bank
Reading 1 Look at this organogram and match descriptions 1-8 ot sentences a-h.

Atlantic Banking Group - an overview

Board of
Directors

Managing
Director

Chief Chief Risk Corporate Retail Private Human

Financial Banking Banking Banking Resources
Officer
Officer Director Director Director Director

Group Corporate Financial

Group Risk Branches Training
Accounting Banking Advisers
Internal Loan
Client Risk Recruitment
Audit Modification

1 The Retail Banking Department si responsible for the everyday banking needs of
individual customers.
2 The Human Resources Department is in charge of hiring new staff.
3 The Corporate Banking Department deals with companies.
4 The Internal Audit Department checks on procedures throughout the bank. .
5 The Training Department is involved in organising training, and reports to the Human
Resources Director.
6 The Client Risk Department deals with corporate customers and assesses their ability to
repay loans.
7 The Group Accounting Department is responsible for preparing the bank's accounts.
8 The Group Risk Department reports to the Chief Risk Officer and is responsible for assessing
risks for t h e w h o l e bank.

a) This department looks at companies' financial documents and assesses the risk involved in
giving loans.
b) Employees ni this department audit the books and the other departments. They make sure
everyone is working correctly.
c) The people in this department try to find out what the other employees need to learn.
Then they set up training courses.
d) Employees in this department advise clients to set up credit lines. They also work to create
special products for their clients.
e) The people in this department get information from the bank's accounting systems. They help to
prepare all the financial documents for the Board of Directors.
f) This department recruits new employees.
g) This department looks at individual customers' financial documents. They assess each of them
according to the risks of the products and the economy.
h) Employees in this department spend their time opening current and deposit accounts, arranging
small loans, setting up overdraft facilities and doing everyday banking business.

38 5 T h estructureo fa bank
 2 Look at the organogram and descriptions in 1 again. Answer these questions.
1 Which department works with all the people at the bank?
2 Which department makes sure all the departments work correctly?
3 Which department works with medium-sized and large companies?
4 Which department is in charge of assessing risk for the whole bank?
Language

G e r u n d o r infinitive after a v e r b

Some verbs and verb phrases are followed by a We consider/are involved in/suggest/risk giving loans.
gerund. I don't m i n d / e n j o y / s p e n d time t a l k i n g to customers.

Some verbs are followed by an infinitive with to. They agreed/arranged/decided/helped/offered/prepared/

refused/wanted/tried to set u p an overdraft.
Some verbs are followed by an object + They advise/allow/help/permit/recommend/want customers
infinitive with to. to i n v e s t in funds.
They expect/ask/recom mend/require/wan t customers to have
good credit ratings.

3 Work in pairs. Interview your partner using the language from the Language
box. Note down his/her answers and report back to the class.
What are you involved in doing at work/school?
Vocabulary 4 Look at this organogram and complete the sentences with the words ni the box.
above below on the same level report to supervises

director

manager 1 manager 2 manager 3

employees employees employees

1 _ the managers.
T h e r e is a d i r e c t o r
2 There are several employees the managers.
3 The employees _ the managers.
4 The t h r e e m a n a g e r s are
5 The director the managers.

Listening 5 Now listen to A,il Jo, Dan and Sarah talking about their departments
and check your answers in .4

6 Listen again and match the speakers to these sentences. Write the correct name
next t o e a c h s e n t e n c e .
1 This person finds out what people in other departments need..
2 This person works with companies.
3 This person works with customers at a branch.
4 This person has to check on other departments.
5 This person considers loans for large businesses.
6 This person has someone to help him/her..
Speaking 7 Work ni pairs. Student ,Alook at the information on page 69. Student B
, look at
the information on page 72. Follow the instructions.

T h estructureo fa b a n k 5 39
 P r e s e n t a t i o n skills
1
Vocabulary Work n
i pairs. Label the illustration with words 1-8.
1 remote control 4 screen 7 laptop
2 data proj ecto r 5 laser p o i n t e r 8 slide
3 handouts 6 index c a r d s

2 Match 1-9 to a-i to make sentences and phrases often used in presentations.
1 Good morning and welcome a) to tell you about ...
2 My name is b) conclude with .
3 This presentation will have c) o n t o ...
4 In the first part I am going d) for coming today.
5 Then we are going to move e) summing up the main points.
6 Finally we are going to f) to my presentation.
7 You are w e l c o m e t o g) three parts.
8 I would like to finish by h) Bob Jones and I am going to
talk about ...
9 Thank you all i) ask questions.
Speaking 3 Work ni pairs or small groups. Use the sentences and phrases ni 2to talk about
yourself or your company.
y name is Ahmed Al-Shebani and I am going to talk about jobs in the bank.
M

40 5 T h e structureo fa b a n k
 Listening 4 You are going to listen to a talk. Put these signposting phrases ni the order you
think you will hear them. The first three sentences belong to the introduction.
Signposting ni a The last seven belong to the main part and the conclusion of the presentation.
presentation tells
the listeners w h e r e _ My presentation is in three parts. _Thank you for your attention.
the presentation is The last part is going to be about .. Now moving on to ...
going. G o o d m o r n i n g every one. To s u m up, .
In c o n c l u s i o n , . Finally, ...
So to start off, ... •Are there any questions?
5 Listen and check your answers in 4.
Speaking 6 Work ni pairs. Discuss these questions. Listen to track 71 again fi necessary.
profit margin =
1 How do banks use the money from customers' deposit accounts?
difference between 2 What is the difference between an overdraft facility and a credit line?
interest paid on 3 What can the bank calculate with loans?
accounts a n d 4 What type of rates does the bank offer for loans?
interest paid on 5 How does a bank calculate its profit margin?
loans

Language

Future forms and past simple

We use be going to or the present continuous to I am going to tell you about our new banking products.
outline a plan for a talk. We are introducing new regulations next week.
We use the past simple to summarise what we covered / explained our new banking products.
in a talk. I told you about the new regulations.

7 Use these prompts to write sentences using going to. Then rewrite the
sentences using the present continuous.
1 you / talk / to your boss / tomorrow / ?
2 he / give / a presentation / next week
3 we / not recruit / new staff / this year
4 | / change / departments / next year
5 they / modify / the loan for the client / ?
Speaking 8 Work in pairs. Choose a topic and outline your plan for a talk. Tell your partner
what you are going to say about it. Use at least four sentences. Then swap roles
and repeat the activity.
I am going to talk about ...
Then I am going to ...
9 Work in pairs. Find out what your partner's problem is. What is he/she going to
do about it? Listen and give advice. Then swap roles and repeat the activity.
Student A
You work in the Group Accounting Department. You enjoy working with
customers and in this job you only see your colleagues. You would like to
change your job. Talk to your partner about what you are going to do.
Student B
You work at a branch where you serve customers every day. You like your job but
you really enjoy working in a quieter environment. You would like to change to
another department. Talk to your partner about what you are going to do.
10 Work with a new partner. Tell him/her about the outcome of your discussion
in 9.

T h e structureofa b a n k 5 41
 The changing world of banking
Reading Work in pairs. Discuss changes in your own banks.
M
y bank used to ... but it doesn't any longer.
Read this text about banking. Are these sentences true (T), false (F) or is there
no information in the text (NI)?
1 Modern-day banking began in the fifteenth century. -
2 Retail banks have existed for more than 300 years.
3 In the seventeenth century English people used the receipts they got from
their banks to buy gold and silver. -
4 Banks have opened branches in supermarkets around the world.
5 People like to use the machines in the lobby.
6 Banks have joined together with other banks.

0 0 0

The changing world of banking

Banking began ni the twelfth century ni Italy. Moneylenders set up benches ni the marketplace ot do
transactions. In the UK retail banking started ni the seventeenth century. People began to use banks ot
«eep their gold and silver safe. The bank gave them receipts, and customers used these as currency.
Today many of the early banks have expanded into financial supermarkets for customers. They offer
current and deposit accounts and make payments through EFTPOS (electronic funds transfer at point
of sale ni shops and restaurants. In addition, they issue credit cards, pre-paid cards, debit cards and
smart cards. Many banks even give financial advice and sell insurance and pension plans.
Even hte methods of banking have changed. People used ot use cheques widely. Today most
customers use direct debits or standing orders ot pay their bills. Many customers open online accounts.
This means that they no longer have to come into the bank. And when they do, they usually use the
machines ni the lobby and they don't speak with a banker at all. It is much more difficult today for
bankers ot get ot know their customers. tI si also harder to advise them or sell them other products.
This is why banks have come up with other ways to meet their customers. World Savings Day was
started ni 1924 in Milan, Italy but si now expanding to countries where people sometimes don't use
banks at all. The banks give their customers gifts for opening savings accounts. Sometimes they hold
events or invite customers to come to them to hear about investments or other financial topics.
Today many banks have become larger and have merged with other banks. Customers no longer
know hte people that they deal with. That si one reason why banks are trying ot find new ways ot

Language

Present perfect
We use the present perfect to talk about actions which Early banks have expanded into financial
started ni the past and have not finished, r
o which happened supermarkets.
in the past and have an effect on the present.
T
o form the present perfect, we use have/has + past participle.
We use for for a period of time and since for a fixed point ni Banks have existed for over 300 years.
time. Banks have changed greatly since those times.
We use ever in questions. Have you ever worked ni an investment bank?
We u s e a form of h a v e in s h o r t answers. Yes, I have./No, I haven't.

Speaking 3 Work n i pairs. Write three statements each, using the present perfect. Two are
correct, one is false. Your partner guesses which one is false.
I have been to Japan. I have never been to the US. I have worked in the UK.
42 5 T h e structure of a bank
 Review
Language 1 Complete these sentences with be going to, the present perfect, a gerund or
an infinitive.
1 I (manage) portfolios for wealthy clients since I began working
here.
2 My department is responsible for - (take) care of corporate clients.
3 Last week I helped my boss - (check on) the credit ratings of
our clients.
4 Next week Group Accounting (prepare) the financial documents
for the Managing Director.
5 He_ (be) a client of mine for many years.
6 I s p e n d my time. (serve) customers at the branch.
7 We (talk) to a corporate customer this afternoon about a
new product.
8 We don't usually risk - (lend) money to customers we don't know.
9 We are in charge of - (recruit) new staff for the bank.
10 He advised me - (invest) in funds.
Vocabulary 2 Match 1-8 to a-h to make word partnerships. Then match them to
definitions i-viii.
1 recruit a) tailor-made products
2 modify b) the Managing Director
3 create c) the books
4 plan d) portfolios
5 audit e) clients
6 r e p o r t to f loans
7 manage g) long-term strategies
advise h) staff
i) to work directly for the person who runs the company
ii) to look after investments for clients
iii) to change loans so that customers can pay them back more easily
iv) to find and hire new employees
V) to d e c i d e o n a c t i o n s for the future
vi) to make special products for customers
vii to m a k e s u g g e s t i o n s to c u s t o m e r s
viii to check the figures in the books
Speaking 3 Work ni pairs. Choose a topic from this unit. Ues these signposting phrases
and create a mini-presentation on your topic. Make the presentation to your
partner. Your partner then asks you questions about your presentation.
Introduction Main part
Good morning. o start off,
T
M
y name is ... and I am going o
t tell you about ... Now moving on ot ...
My presentation is in ... parts. Nex.t
First ... T
o sum up, ...
Then …
Conclusion
Finally, In conclusion,
Do you have any questions?
Thank you for your attention

T h es t r u c t u r eo fa b a n k 5 34
 F i n a n c ei n • t a l k a b o u t c a s h flow i n a company

6
• describe a balance s h e e t
• explain a n income statement
companies • explain a c a s h flow statement

C a s h flow
Vocabulary 1 Work in pairs. Match words and phrases 1-11 to definitions a-k.
advance 7 meet expe nses -
2 c a s h flow p r o b l e m s 8 order
3 c h a n g e in d e m a n d 9 pay in full
deposit _ 10 put off payment
5 invoice 1 unforeseen costs
6 lack of cash

a) a request to supply goods or services

b) this money is often paid to reserve something
c) pay your bills
d) expenses you do not expect
e) not enough money coming in to cover expenses
1 when people or companies start needing more or less of a product or service
g) send someone a bill for work you have done
h) money you pay someone to start a job; they receive the rest at the end
i) pay bills at a later date
i completely pay off a debt
k) when money is not available

Speaking 2 Work in pairs. Look at the newspaper headline and discuss these questions.
Use the words in .1 Then compare your answers with another pair.
1 What sort of company do you think Events &Co is? Are they successful?
2 What do you think causes cash flow problems?

BUSINESS NEWS Wednesday I May

EVENTS & CO IN CASH FLOW CRISIS
Unforeseen costs and change in demand create problems for the
c o m p a n y.

Rea ding 3 Read the guidelines for bank advisers and answer these questions.
1 What does the banker ask about billing their customers?
billing period = how
long a customer h a s
2 How does the bank's client get money when he or she needs it?
to pay 3 What information does the bank need to give the client a loan?

Guidelines for bank advisers: how to deal with clients' cash flow problems
• How much c a s h d o e s the customer n e e d ? • How much does the customer pay in interest?
• When does the customer send invoices? • How long has the company been ni business?
• How long is the billing period? • Has the customer always paid his/her bills?
• How often does the customer use an overdraft? • Does the customer have other loans?

4 6 Financei ncompanies
 Listening 4 18
Work in pairs. Listen to a radio interview in which Steve Jones from
Events & Co talks about cash flow in his company and answer these questions.
1 Did the company make a profit from the job he describes?
2 What were some of the problems that he had?
5 Listen again and complete this table.

Jan Feb Mar Apr May June July

Income (1) € €0 €0 €0 (6) € €0 (8) €
Expenses (2) € (3) € (4) € €2,500 + €3,000 (7) € (9) .€
(5) € +€375
(interest) (interest)

6 Work in pairs. Look at the audio script for track 18 on page 77 and answer these
questions.

gross profit = profit 1 How much did Steve Jones get for the event?
before paying taxes 2 How many months did he need to plan the event?
3 How much did he pay to suppliers?
4 How much did he pay in interest?
5 How much gross profit did he make?
Language

Quantifiers
We use s o m e with countable and uncountable nouns. They had some unforeseen costs.
We use it in affirmative sentences and questions. Would you like some coffee?
We use any with countable and uncountable nouns. We Do you have any problems with your customers?
use it in questions and negative sentences. We didn't have any income in April.
We use a lot of with countable and uncountable nouns, I've had a lot of expenses / didn't expect.
usually in affirmative sentences. W e haven't had a lot of time ot complete the report.
We use many - more - the most and Does this happen with many customers?
(a) few - fewer - the fewest with countable nouns. Yes, with most of them.
There are few banks in the area.
We u s e m u c h - m o r e - t h e m o s t a n d We avoid paying so much interest.
(a) little - less - the least with uncountable nouns. We had little time to take care of it.
Less money came in than we thought.

7 Choose the correct words in italics.

1 How many / much money does he have in his deposit account?
2 The company is doing well and has few / little debts.
3 They have not received some / any payments for their work.
4 They have hired some / any companies to cater for an event.
5
Thave very few / little time tomorrow for the meeting.
6 We had the fewest / least problems with our last project.
Speaking 8 Work ni pairs. You run a small business. Tel your partner about a recent
project. Then swap roles and repeat the activity. Talk about:
• what sort of com pany you run.
• the length of the project.
• how much you got for the project.
• your expenses.

Finance i nc o m p a n i e s 6 45
 The balance sheet

Reading Work in pairs. Look at this balance sheet. Can you think of any other items
which could come under these headings? Discuss.

Atlas Ltd
Balance sheet - as at 5 April 2012
Assets €25,639 Equity €7,062
Current assets €11,764 Shareholders' equity €2,860
Cash €3,466 Retained earnings €4,202
Accounts receivable €4,324 Liabilities €18,577
Inventory €3,974
Current liabilities €12,095
Non-current assets €13,875
Tangible assets €9,144 Accounts payable €5,517
Ta x e s €3,822
Buildings €6,096 Short-term loan €2,756
Equipment €3,048
Intangible assets €4,731 Non-current liabilities €6,482
Brand n a m e s €3,154 Long-term loan €6,482
Patents €1,577
Total a s s e t s €25,639 Total liabilities €25,639

Find words in the balance sheet in l that match these definitions.

1 things owned by a company
2 debts; money owed to someone else
3 things that can be quickly turned into cash
4 things that cannot be quickly turned into cash
5 money c u s t o m e r s owe to a company
6 money a compan y owes to supplier s
7 finished or partially finished goods owned by a company
8 things that can be touched like a building or machine
9 things that c a n n o t be t o u c h e d like a b r a n d n a m e or patent
10 debts a company has to pay within one year _
1 debts a company does not have to pay in the current year
12 money shareholders invested plus retained earnings
13 money a company keeps to use for the business or to pay debts

Speaking 3 Work in pairs. What do you know about balance sheets? Where did you learn
about them? Do you deal with balance sheets in your job?

46 6 Finance i n c o m p a n i e s
 Language

Passive forms

We form the passive with the correct form of be + past These a s s e t s c a n b e c o n v e r t e d into cash.
participle. The balance sheet is divided into two parts.
We use the passive: The company was invoiced last month. (clear who
• when the action is more important than who does it. did the action)
• w h e n it is clear who d o e s the action. The money is paid by shareholders. (highlights
• to highlight the agent (who or what does the action) who did the action)
using by.

4 Rewrite these sentences in the passive. Use by only where necessary.

1 The Group Accounting Department prepares the balance sheet.
The balance sheet
2 We can sell the asset.
The asset
3 We add the figures together.
The figures
4 The shareholders can provide more capital.
More capital
5 Work ni pairs. Use these prompts to ask and answer questions ni the passive.
Then make your own questions about banks and companies.
1 training / provide / HR
2products / sell / Retail Banking
3 important decisions / make / Board of Directors
4financial documents / prepare / Group Accounting
5 loans / modify / Loan Modification
6 risk / analyse / Group Risk
A: How is training provided in your company?
B: It's provided by HR.
Language

Large numbers
When we say large numbers, we use and between the hundreds and 300,461 = three hundred thousand four
the tens, including when they are multipliers. hundred and sixty-one
1,000 = one thousand 34,987,125 =thirty-four milion nine
100,000 = one hundred thousand hundred and eighty-seven thousand
1,000,000 = one million one hundred and twenty-five
1,000,000,000 = one billion (one thousand million)
1,000,000,000,000 = one trillion (one million million)
Note: we say two million, not two millions.
Large figures can also be said with a decimal point. We use a comma 87,656,000,000 = eighty-seven point six
to separate billions and millions, and millions and thousands. We use a five six billion
point (.) for decimal points. 17.5 =one point seven five
The numbers after the decimal point are said individually.

Listening 6 19
Work in pairs. Listen to six numbers and write them down. Then take
turns to read the numbers to each other.
Speaking 7 Work ni pairs. Student A, look at the information on page 69. Student B, look at
the information on page 72. Follow the instructions.

Financei ncompanies 6 74
 The i n c o m e s t a t e m e n t
Speaking 1 Work ni pairs. Choose the correct answer, a, b or .c Discuss.
1 An i n c o m e statement s h o w s
a) how many customers a company has.
b) how much the company needed to borrow.
c) h o w m u c h t h e c o m p a n y e a r n e d a n d spent.
2 The i n c o m e s t a t e m e n t is u s e d with t h e b a l a n c e s h e e t to
a) find out about the financial position of a company.
b) compare the figures.
c) explain the balance sheet.
3 N u m b e r s w r i t t e n in b r a c k e t s s h o w
a) numbers from the year before.
b) negative numbers.
c) n u m b e r s which are estimated.

Listening 2 4y 20 Listen and check your answers in .l

Vocabulary 3 Look at the income statement for Electronics and More Ltd and match these
definitions to the underlined words.
1 the gradual decrease in value of an intangible asset
2 the money earned before paying interest and tax
3 money the company earned
4 the amount of money spent to produce and sell a product
5 the a m o u n t e a r n e d for selling g o o d s minus d i s c o u n t s given to c u s t o m e r s

6 the gradual decrease in value for a tangible asset

EBIT = earnings
before interest and
I n c o m e s t a t e m e n t f o r E l e c t r o n i c s a n d M o r e Ltd
tax 6 April 2011 - 5April 2012
() = minus figure [figures ni 000s]
Operating revenues
Sales €8,900
Operating expenses
Cost of goods sold (€2,739)
Sales, General and Administrative Expenses (SG&A) (€3,955)
Depreciation and amortisation (€643)
Total operating costs (€7,337)
Operating profit €1.563
Non-operating profit €O
EBT
I €1,563
+ plus
- minus Interest (€148)
x times/multiplied by Earnings before income taxes €1,415
= equals/is Income taxes (€369)
+ divided by Net profit after tax €1,046
% percent

Speaking 4 Work ni pairs. Look ta the box of mathematical formulas above. Write down
three mathematical formulas and read them to your partner. Your partner
should write them down. Then swap roles and repeat the activity.

48 6 Finance i n companies
 Listening 5 4 21 Your boss is explaining how the bank looks at an income statement to
decide if the company can get a loan or not. Look at the income statement in 3.
Listen and circle the words you hear.
6 Look again at the income statement in 3 and the income statement below. Read
the audio script for tracks 20 and 21 on pages 77-78. Are these statements true
(T), false (F) or is there no information (NI) in the text?
1 The net profit after tax is found by subtracting the operating expenses from
the net sales. —
2 Comparing the net profit margin from one year to another might show if the
company has done better or not.
3 Last year's sales and net profit margin were lower. -
4 Companies in the same field also produce income statements.
5 The income statement and the balance sheet should both be looked at.
6 The income statement may be less important than the balance sheet. —

I n c o m e s t a t e m e n t for Electronics a n d M o r e Ltd

6 April 2010 - 5April 201 1
[figures ni 000s]
Operating revenues
Sales €7,600
Net profit after tax €996

Language

Modals of speculation
We use can, may, might or could to speculate It might mean their performance is not as good as it
or guess. w a s last year.

We use an infinitive without to after can, may, might It c o u l d m e a n that there w e r e p r o b l e m s in the whole
or could. sector last year.

7 Put the words in 1-3 in the correct order to make sentences.

1 next year / be better / may not
2 might / higher operating costs / have / they / next year
3 a lot of problems / they / have / and / might not / recover / they
Speaking 8 Work in pairs. Do you think it will be a good idea to lend Electronics and More
Ltd money? Talk about the problems that could arise and the other documents
you would like to look at.
It could be a problem if ... I would like to see ...
We may need to ask them about ... It might be better to . .
Writing 9 Write a short report about the income statement of Electronics and More Ltd
for your boss. Explain how the figures were reached.
This report aims to explain the income statement of ...
Last year the company earned... in net sales.
Their operating expenses were ...
This was a result of ... plus ...

Finance i n companies 6 49
 T h e c a s h flow s t a t e m e n t
Speaking 1 Work in pairs. What do you think a cash flow statement shows? How ti is
different from an income statement? Look at this cash flow statement for
Electronics and More Ltd and the text next to it to check your answers.

Cash flow statements are the third Electronics and More Ltd - Cash flow statement
important d o c u m e n t that c o m p a n i e s Part 1 Cash flow from operations
produce. The income statement (1) Profit after tax €300,000
shows fi the company made a profit (2) Decrease in accounts receivable €48,000
and the cash flow statement shows (3) Increase in taxes payable €43,000
fi the company generated cash. (4) Increase in accounts payable €52,000
W h e n we look at the bottom line of (5) Net c a s h from operations €443,000
the cash flow statement, we see fi Part 2 Cash flow from investing
operations resulted in a net increase (6) Plant and equipment (€137,500)
or decrease in the cash the company Part 3 Cash flow from financing
has. Therefore, the cash flow (7) Issuing new shares €65,000
statement is important for finding out (8) Bank loans €202,000
fi the company can pay its bills. (9) Net increase in cash €572,500

Reading 2 Look at the cash flow statement ni 1again and match 1-9 to definitions a-i.
Part 1
a) The company has more cash on hand because the customers have paid
their debts.
b) The company has more cash on hand because they are waiting to pay their
taxes till a later date.
c) All the expenses are subtracted, resulting in this final figure..
d) The company has more cash on hand because they are waiting to pay
suppliers till a later date.
e) Here we see all the cash the company generated by doing business.
Parts 2 and 3
f This expense was caused by buying equipment for the factory.
g) This money came from a bank.
h) This final figure resulted from all cash movements.
i) This figure is a result of finding people to invest in company stock.
Language

C a u s e a n d effect
To express cause, we use because or as + a The PLA is important because investors can see the
new clause. p e r f o r m a n c e of a company for a period of time.

We also use phrases such as thanks to, owing The company lost money due to higher prices for raw materials.
to, due to, because of + a gerund or a noun.
To express effect or result, we use words such Therefore, the cash flow statement is important.
as therefore or consequently.
We also use phrases such as result in or All the expenses are subtracted, resulting in this final figure.
resulting in + a gerund or a noun.

3 Join these sentences using the words in brackets.

1 We had very high expenses. We have a cash flow problem. (resulting in)
2 We were late with our bank payment. We experienced a lack of demand last
month. (owing to)
3 We had to invest ni new machinery. We don't have much cash. (therefore)
50 6 Finance i nc o m p a n i e s
 Review
Language 1 Choose the correct words ni italics.
1 Cash flow problems are often caused by / resulting in late payments from
customers.
2 The company hasn't got some / any problems with orders for next month.
3 Our products are manufacture / manufactured in Europe.
4 Their lack of cash was bringing / brought about by the bank asking for loan
repayments.
5 We have very few / little time to discuss the problem.
6 We might / can do better next year but I am not sure about it.
2 Write these mathematical formulas ni words. Then work in pairs and practise
saying them aloud.
1 64,098 + 3,456 = 67,554 3 87,090 X65 = 5,660,850
2 769,001 - 56,231 = 712,770 4 1,981,980 ÷ 605 = 3,276
Vocabulary 3 Work in pairs. Use the clues to unscramble these words. Then use the letters in
the numbered boxes to find the secret words.
1 ORNESFEUNE SOSCT O
2 TSDPEOI

3 AVDECNA

4 KACL FO SACH
5 RDREO

6 NEAGCH NI NEADMD

7 NEICOVI

8 TEEM XESPEESN

9 TUP FOF NYAMTPE

10 PYA NI LFLU

B
10 1 12 13

|1 expenses you do not expect 6 when other people or

2 money you pay for something at the companies no longer need as
beginning which is only part of the much of a product or service
whole amount 7 s e n d s o m e o n e a bill for work
money you pay someone when they they have done
start a job; they receive the rest when 8 pay bills
they finish. 9 pay bills at a later date
4 when money is not available 10 completely pay off a debt
5 a request to supply goods or services

Writing 4 Work in pairs. Choose one of the documents in the unit (balance sheet, income
statement or cash flow statement) and write an explanation of what it consists
of and how it is used. Read it to your partner, who guesses which document you
have described.

Finance in c o m p a n i e s 6 51
 • make suggestions for products for
corporate clients
Corporate • find out about credit lines, corporate loa
7 banking
a n d leasing
• t a l k a b o u t l o a n modificat ion a n d compar
restructuring
• find out about bankruptcy

Taking care of corporate clients

Speaking 1 Work in pairs. Can you name three products a bank offers to corporate clients?
What is it important for a bank to do before ti lends money to a company?
Listening 2 $ 22 Marta is an intern spending the week in a corporate banking
department. Listen to her conversation with the head of the department and
answer these questions.
1 What is the main difference between corporate banking and retail banking?
2 What does a credit analyst do?
3 What is a risk a s s e s s m e n t ?
How does a bank know if a customer is creditworthy?
5 What three areas does Piotr mention as part of his new job?
Vocabulary 3 Match words 1-6 to definitions a-f.
1 letter of credi t - 4 bank guar ante e
2 bank draft 5 leasing agreement .
3 credit line 6 corporate bond
a) an arrangement by a bank to give a customer a specific amount of unsecured
credit, similar to a n o v e r d r a f t
b) a debt security issued by a company sold to investors
c) a written promise by an importer's bank to pay the exporter's bank on a
particular date or time after the goods are sent by the importer
d) a promise by a bank to pay a loan fi the original borrower does not pay it back
e) a type of cheque where the payment is guaranteed because it is issued by
a bank
) an arrangement to pay to use equipment, buildings, cars, etc. rather than
buying them
52 7 Corporate banking
 Vocabulary 4 Match products 1-6 to situations a-f.
1 b a n k draft 4 letter of credit
2 corporate bonds 5 bank g u a r a n t e e s
3 credit line 6 leasing agreement
a) I' don't want to pay for goods from another country until they are shipped.'
b) I' need a new machine for my factory.'
c) I' want to make sure the buyer has funds to pay me.'
d) M
' y company needs to raise capital."
e) "The bank promises to pay my debts to my suppliers fi I can't.'
f) I' need to have different amounts of cash on hand at different times.'

Listening Listen to the three conversations and decide which aspect of

corporate banking the people are discussing. Match the conversations (1-3)

a) risk a s s e s s m e n t
b) e x p a n s i o n
c) financing international trade
6 Listen again. Are these sentences true T) or false (F)? Correct the false sentences.
1 Mr Kosnik asked the bank to get the information about the company in
Jakarta. (T / F)
The bank is worried about Mr Ferrando's creditworthiness. (T / F)
3 Ms Park is thinking about selling some of her business. T
( / F)
Language

S e c o n d conditional
We use the s e c o n d conditional to talk about unreal or imagined If I wanted to import goods o
t Poland,
situations, to give advice or to make recommendations. what would I need to do?
We use the form: if + past simple + would + infinitive.
The if c l a u s e c a n c o m e before or after the main c l a u s e in the We would have a better idea of your
sentence. When it comes at the beginning, we put a comma after it. situation if you gave us your profit and
loss accoun ts.

7 Complete these second conditional sentences with the correct form of the
v e r b s in brackets.
1 If a client. - (show) me his balance sheet, I - (talk) to him
a b o u t it.
2 - (recommend) a letter of credit fi a customer - - (want) to
import goods from abroad.
3 If a c u s t o m e r (decide) to expand, 1_ - (discuss) different
types of financing with him or her.
4 What — (you / do) fi a customer (not pay) back a loan?
5 If a c l i e n t _ - (not show) us the documents we needed, we
(not arrange) a credit line or loan for him.
Speaking 8 Work in pairs. Talk about what you would do in these situations. Use the second
conditional.

1 Someone offers you an exciting job in London.

2 You get the opportunity to move to another country.
3 You are given the opportunity to work in the Corporate Banking Department.
:A What would you do fi you were offered an exciting job in London?
: I would take the job because I love London.
B

Corporatebanking 53
 Loans, credit lines and leasing
1|
Speaking Work in small groups. What is the difference between a loan, a credit line and a
leasing agreement? Discuss.

Listening 2 2 4
Listen to a banker talking to Mr Lizak, a new client. What type of
b u s i n e s s does Mr Lizak have?

3 6g 25 Now listen to the whole conversation and answer these questions.

1 Why does Mr Lizak need a new bank?
H o w is he planning to expand?
3 Which two products does the banker suggest for renting shops?
4 What solution does the banker suggest for buying the inventory?
Reading 4 Read the information about corporate products from a bank's intranet site
and match 1-6 to a-f to make sentences.
1 Credit lines are useful
2 Liquidity means that a company has current assets
3 Property owned by a company can be used
4 The bank charges risky customers
5 fI a customer wants to use a factory or a machine for a fixed period of time, -
6 The a m o u n t an a s s e t is w o r t h at the e n d of the lease
a) to secure a loan.
b) is its residual value.
c) when a customer needs to have cash on hand
d) a leasing agreement si usually the best way to do this.
e) they can change into cash.
f higher interest rates.

C R E D I T LINES CORPORATE LOANS LEASING AGREEMENTS

These are f u n d s available to a Corporate loans can be arranged Leasing agreements are contracts
borrower for a specific period, for up to ten years. These can be giving the right to use an asset
often as a flexible solution to secured with real estate owned for a fixed period of time, in
cash flow problems. We look at by the individual or the company. exchange for payments. The
each business case individually Again, we have to arrange these leasing agreement can be for a
and work out the amount of the individually with customers. The machine, piece of equipment or a
credit line with each customer. We custom er receives the money building, which may also include
look at the c u r r e n t assets b e c a u s e immediately and the payments the equipment or furnishings.
they can be changed into cash depend on the amount borrowed T h e c u s t o m e r b o r r o w s the asset
easily. This represents liquidity in and the type of interest rate (fixed from us and pays for its use for
the business. The custome r pays or variable) arranged, as well as a set period of time. At the end
interest o n the a m o u n t b o r r o w e d the customer's creditworthiness. of the time the customer returns
a n d he or she c a n use more In general, when there is more the asset to the bank or can buy it
money than is in the account if risk, the bank sets a higher interest at its residual value. The residual
they stay under the agreed limit. rate. There is a one-time loan value is how much it is worth at
If the customers went over the origination fee and a penalty for the end of the lease.
limit for a period of time, there early repayment. If a customer
might be penalties. This type of requested a corporate loan but
financing is suitable for business didn't have enough security,
opportunities, expansion plans we would conduct a full risk
and buying more inventory. assessment.

54 7 Corporate banking
 Language

Second conditional with modals

In s e c o n d conditional This could be fixed for five years if it was necessary.
s e n t e n c e s , w e c a n u s e a modal If the customers went over the limit for a period of time, there might be penalties.
verb instead of would. We often If a customer requested a corporate loan but didn't have enough security, you
use might, could and should. s h o u l d c o n d u c t a full risk a s s e s s m e n t .

5 Match 1-6 to a-f to make sentences.

1 If you wanted to own the property, -
2 You should compare different bank products _
3 We could offer you a fixed interest rate
4 We might look into issuing corporate bonds _
5 Ifyou had a problem with cash flow,
6 If you needed new machinery for your business, -
a) if you took out a five-year loan.
b) you might think about a credit line for your business.
c) you could arrange to lease it.
d) if you wanted to choose the best one for your business.
e) you could buy it at the end of the leasing contract.
) fi you wanted to raise cash.
Speaking 6 Work n
i pairs. Discuss these questions about corporate products.
1 What should a customer do fi he or she had problems with cash flow?
2 What might a customer do if he or she needed a new location for the
business?
3 What products could a customer consider fi he or she wanted to buy
inventory or machinery?
If a customer had problems with cash flow, he or she should . . .
7 Work ni pairs. Student A
, look at the information on this page. Student B
, look at
the information on page 73. Follow the instructions.
Studen t A
1 You have been with a small local bank for many years. However, your
business is expanding and you need to find a larger factory. You are talking
to a new banker. Decide which goods or services you sell. Are you a
manufacturer or a retailer? What is special about your business? Discuss
corporate loans, credit lines or leasing agreements with the banker. Decide
which o n e is best for you.
2 Swap roles. You are a banker. Anew customer has come to you. Find out
about his/her business and decide what he/she needs.
Writing 8 You are a banker. Write a letter to the customer in 7with your
recommendations. Remember to give reasons. Use the information in 4 and the
audio script for track 25 on pages 78-79 to help you. Write 80-100 words.

Dear Mr/MS .,
I am writing to ...

Yours sincerely,

Corporatebanking 7 55
 Company restructuring and loan modification

Sophie's
Kitchen

Speaking 1 Work in pairs. What's happening n

i illustrations A-D? Why did it happen?
What might happen next? How would you prevent this from happening if your
company had a serious problem with debts?

Vocabulary 2 Complete these definitions of common word partnerships with the verbs in
the box.

generate liquidate manage modify recover refinance restructure settle

1 'To bills with creditors' means to pay people or companies you
owe money to.
2 "To a loan' means to make changes to a loan agreement.
3 "To a company' means to change business practices.
"To a debt' means to be paid back when you don't expect to be.
5 'To cash' means to raise funds.
"To assets' means to sell property for cash.
"To a loan' means to replace one loan with another at a lower
rate of interest.
8 'To- debt' means to find a strategy to help an individual or
company pay their bills.
3 Match 1-6 to a-f to make common word partnerships often used to talk about
loan modification.
1 restructure a) strategies
make b) your c o s t s
discuss c) c a s h
generate d) your debt
5 cut e) a list of creditors
6 manage f the company
Listening 4 6 , 26 Mr Kowalski, a businessman, has an appointment to talk to Karl
Mayer in the Loan Modification Department. Listen to their conversation and
number the phrases in 3 in the order you hear them.

5 Listen again and answer these questions.

1 What problem is Mr Kowalski having in his company?
2 What is the first step that Karl recommends?
3 What does Karl say about generating cash?
4 What does Karl suggest that M r Kowalski do to pay off his creditors?
5 What is Karl's suggestion regarding the money the company owes the bank?
6 Why is the bank interested in helping Mr Kowalski with this problem?

56 7 Corporate banking
 Language

Making suggestions and recommendations

Why don't we take a look at the figures?
I would like to recommend an external adviser to come and talk to you.
We could arrange a meeting within a few days.
Would you b e willing to consider restructuring the company?
I would suggest liquidating assets.
What a b o u t selling off some buildings?

6 Match 1-5 to a-e to make sentences for suggestions and recommendations.

1 Why don't we a) to consider selling some of your property?
2 I would suggest b) a way to generate cash.
3 What about c) extending the line of credit.
I would like to r e c o m m e n d d) look for alternative financing?
5 Would you be willing e) restructuring the company?
Speaking 7 Work ni pairs. What do you think loan modification strategy is? Why do you
think it might be important for the bank? Discuss.
Reading 8 Read the letter Mr Mayer wrote to Mr Kowalski after their conversation and
answer these questions.
1 What does 'default on a loan' mean?
2 What is a non-performing loan?
3 What does a turnaround professional do?
4 What are some ways to modify a loan?

Dear Mr Kowalski,
I have looked carefully at your income statement and your cash flow statement. I se
that you are ni danger of (1) defaulting on your loan. fI you do not pay us back, we will
have to reclassify the debt as a (2) non-performing loan.
We have decided to appoint a (3) turnaround professional to help you change the way
your company works. By restructuring the company you should be able to generate
some cash. You may need to liquidate some assets as we mentioned. You will have to
think about which assets you can sell. It is also important that your company works
more efficiently. The external adviser can help you ot (4) streamline some of your
processes and wil speak with your creditors and help you ot manage your debt.
After these steps have been taken, w
e can discuss changing your loan. W
e can make the
period of time longer by (5) extending the term, for example. W
e may also think about
charging interest only for a time. It is very important that we come to an agreement
about the loan modification. Our goal si to help you (6) stay in business.
Please let me know fi you have any questions.
Yours sincerely,
Karl Mayer

9 Read the letter in 8 again and match the underlined phrases 1-6 to a-f.
a) simplify the way things are done in a company -
b) a debt in danger of not being paid back _
c) have a longer time to pay back a debt
d) failure to pay back money
e) a person who helps with the reorganisation of a company -
f c o n t i n u e o p e r a t i o n s as a c o m p a n y

Corporate banking 7 57
 Bankruptcy
G
N
O O
L
CG
I
S
N O
L
CS
Speaking 1 Work in pairs. Discuss these questions.
LL
O
N
G
YDN DOWN DOV
W
O
1 What do you know about bankruptcy in
your country? What are the different types?
2 Which companies have gone bankrupt in the
N
O
B
A
E
L
SSA
L
E SALE SA
last year? Do you see signs like the one in
the photo? Why do you think this happens?
Reading 2 Fred Brown, amember of the board of Pools
& Spas Ltd, has to explain a difficult situation
to the managers in his company. Complete the
explanation he is preparing for his colleagues with the words in the box.

assets bankruptcy creditors debts loans machinery obligations repayments

I am sorry ot inform you that we have been unable creditors to start the bankruptcy proceedings. W e
to meet our (1) _ - to our suppliers and bank hope that this will give us a fresh start once w
e have
since the recession began. Two years ago we lost paid part of our debts to our (6)
a lot of business but have hoped that the situation
I think fi we waited, things would be much worse.
would improve. Unfortunately, we still have a lack
of liquidity. Therefore, we have had to declare
Then our creditors may have wanted us to liquidate
al of our assets ot pay them. W
e did not want to
(2) - This si a legal proceeding which
allows our creditors to recover some of the money we auction off (7) - . We were also ni danger fo
owe them. The court c o n s o l i d a t e s our (3) foreclosure; this means that the bank could take our
and decides how to pay our creditors. W
e also have buildings and sell them to raise cash to pay off our
to repay the money we borrowed and distribute some debts. This way we will be relieved offurther liability
of our (4) _ fairly. Now that the bankruptcy and can try to reorganise the company. W e hope to
proceedings have begun, we no longer have to keep renegotiate some of the (8) _ and pay back
up our (5) to the b a n k as much as possible.

This si a voluntary bankruptcy: this means we have Thank you al for your understanding at this
d e c i d e d to d o this. We did not want to wait for our difficult time.

Language

Past simple and present perfect

We use the past simple to talk about finished actions Two years ago we lost a lot of business.
or situations in the past.
We use the present perfect to talk about actions which Now that the bankruptcy proceedings have begun,
have not finished or which happened in the past and we no longer have to keep up our repayments.
have an effect on the present.

3 Complete these sentences with the correct past simple or present perfect form
of the v e r b s in brackets.
1 We (have) problems since our largest client - (go) out
of business.
2 We_ this product for years and ti is still very successful.
(offer)
3 The r e c e s s i o n _ (cause) many problems at the beginning but we
- (recover) and we are earning money again.
4 We (start) the business ten years ago and - (expand) into
new markets last year.

58 Corporate banking
 Review
Vocabulary 1 Match 1-8 to a-h to make sentences.
1 When companies cannot meet a) the money they lent.
2 They had to liquidate b) cash to pay their bills.
3 The adviser helped them manage c) bankruptey and let the court handle
t h e debts.
4 When a company defaults d) their obligations, they may have to
go into bankruptcy proceedings.
5 The last step may be to declare e) a loan, it is better than not paying
it at all.
6 If it is possible to modify f) their debt.
7 T h e creditors want to recover g) assets to pay their creditors.
8 They may need to generate h) on a loan, it can be expensive for
the bank.
Language 2 Use these prompts to write second conditional sentences about corporate banking.
1 my credit line / extend / to €80,000 * / could buy / more inventory
2 we / might try / to produce a new product line *we / get / the bank loan
3 they / default / on the loan › we / not get back / the capital we lent
4 we / declare / bankruptcy › we / not have to / pay
5 /l advise / you to modify your loan y o u / have / cash flow problems
3 Complete these sentences using the correct present perfect, past simple or
s e c o n d c o n d i t i o n a l form of t h e v e r b s in brackets.
1 Ifl - ( k n o w how to help them restructure the company, I would
do it.
2 We_ - (have) this company as our client since 2010.
3 Last year the company - — (declare) bankruptcy because they could
not pay their creditors.
4 If we - ( a r r a n g e ) a loan, we - (can move) into a new shop.
5 Since the r e c e s s i o n - (begin), we (lose) many of our
customers.

Speaking 4 Work ni pairs. Complete these sentences.

1 We would liquidate assets if ....
2 We could expand the business fi ...
3 The bank would lend us money fi ...
4 fI I had a great business idea, I would .
5 fI we had a cash flow problem, we could ...
6 I might need a letter of credit if ....
5 Work ni pairs. When would you recommend these products and solutions to
customers?

bankruptcy credit line leasing contract letter of credit loan modification

corporate loan
I would recommend . . . if ...
Work in pairs. Student A, you are the customer. Student B, you are the banker.
Student A
, describe your problem to Student B . Student B, use the phrases for
making suggestions and recommendations on page 57 to recommend two of the
products ni .5 Then swap roles and repeat the activity.

Corporatebanking 7 59
 C e n t r a l b a n k s • talk about central banks and their
8 a n dbanking • understand the business cycle and
liquidity i n t h e market

reg ula tion s

• t a l k a b o u t t h e economic trends
• describe graphs

National and central banks

Speaking Work in pairs. Do this quiz. Then compare your answers with another pair.
1 Central banks are responsible for
a) setting fees for current accounts. b) keeping prices stable.
2 The European Central Bank (ECB) has to
a) supply all the money for the euro-zone. b) produce financial data.
M a n y central banks
a) keep reserves for other banks. b) keep deposit accounts for
governments.
Reading 2 Read these forum posts on central and national banks and check your
answer s in .1
8 0 0

Bob, USA Joëlle, France Ania, Poland

Do we need the Federal Reserve What si the purpose of the European Who makes the euro coins
ni the USA? Why should we pay Central Bank? for each country? And what
taxes to have another big bank? Marie, consultant for the ECB, Belgium else does the ECB do?
Katia, German National Bank The ECB si very important to the euro-zone. Can't the National Bank of
Central or national banks help both Its main function si keeping prices stable Poland just do everything
the government and the other banks in the euro-zone and inflation just under we need?
ni the country. The basic function two percent. The ECB si the central bank Franz, ECB, Germany
of a central or national bank is for the euro. the common currency in the There are other jobs that
maintaining price stability by using European Union euro-zone member states. the ECB does. One si
a variety of methods. In many The first task of the ECB si deciding on and deciding when to issue
cases, the role of a central bank implementing monetary policy. This includes banknotes and coins within
si encouraging financial stability. setting the interest rates for banks in the the euro area. The ECB is
Sometimes a central bank has a euro-zone. Then the banks decide how much the only organisation which
monitoring role which may involve interest to charge or pay customers for their can authorise this. However,
supervising the commercial banks. business. tI si also responsible for carrying individual countries are
It often holds reserves for the other out foreign exchange. Holding and managing responsible for minting
banks. In some countries t h e centrall the official foreign reserves of the euro area their own coins. Another
bank controls the supply of money countries is a very important job for the important task is collecting,
by deciding how much money other ECB. In addition, the ECB has to regulate analysing and publishing
banks have to hold as reserves. In the payment systems within the euro- financial statistics. These
many countries the central bank zone and make sure that ti works without are necessary for the ECB
issues and prints the currency. Some problems. Keeping the countries within to decide on monetary
also manage the exchange rate of a the euro-zone economically stable si a very policy and to carry out its
country's currency. important function of the ECB. other tasks.

3 Read the forum posts in 2 again. Which sentence is correct?

1 Keeping prices stable is an important function for central banks such sa the
ECB. Gathering statistical information helps them with monetary policy.
2 Keeping prices stable, printing banknotes and minting coins are
responsibilities common to all central banks.

60 8 C e n t r a l banks a n d banking regulations

 Vocabulary 4 Find words or phrases ni the forum posts ni 2 that match these definitions.
1 print money or mint coins (Katia)
2 money a bank needs to keep for possible future withdrawals (Katia)
3 making sure that costs for goods and services do not change much (Marie)

4 a general increase in the price of goods and services (Marie)

5 changing one currency for another (Marie)
6 making something public in writing (Franz)
Speaking 5 Work in small groups. Make notes from one of the posts in 2 and tell your group
about it using your notes. Then discuss these questions.
1 Which responsibilities are common to all central banks and which only
concern some central banks?
2 Talk about the central bank in your country and what it does.
Language

Gerund a s subject and object

A verb in the -ing form (gerund) can work as a noun Holding the foreign reserves of the country is a task of
and be the subject or the object of a sentence. many central banks.
We often use the gerund with the verb be but we can Maintaining price stability helps the economy.
a l s o u s e it with other verbs. This i n c l u d e s s e t t i n g the interest rates.

6 Complete the headings for this leaflet. Use the gerund of the verbs in the box.

authorise guarantee maintain publish set supervise

F u n c t i o n s of • (3) new money

Central banks decide fi new money
central banks needs to be printed
• (4) liquidity
• (1) financial Another duty is to make sure that
information debts within the system can be
One important duty of a central paid.
bank si to collect financial • (5) interest rates
information and make it public. The central bank si responsible
• (2) commercial banks for deciding how high the interest
Another responsibility of the rates should be.
central bank is often to oversee • (6) — price stability
commercial banks. One of the main duties of a central
bank si keeping prices stable.

Speaking Work ni pairs. Talk about your job or a job you would like to have. Which of
these activities is or would be the most or least challenging in that job? Put
them in order and then explain your answer.
1 talking to clients 5 supervising junior colleagues
2 analysing financial information 6 carrying out risk analysis
3 having meetings 7 preparing financial documents
4 travelling 8 giving presentations

Centralb a n k s a n d bankingregulations 8 61
 Liquidity and the business cycle
Speaking 1 Work in pairs. Discuss these questions.
1 How would you describe the economic situation in your country at the
moment? Are people spending or saving money?
2 Do people and companies spend more or less money when loans are
cheaper?
3 What do people tend to buy when there is more money in the market?
Reading 2 Read the text about liquidity and the business cycle and answer these
questions.
1 What does liquidity mean?
2 What happens when banks have liquidity problems?
3 What do people do when they lose confidence in banks?
4 What do people spend money on when there is enough money in
the system ?
What do companies do when the economy is growing?
6 What is the meaning of inflation?
7 How does the central bank keep inflation low?
8 What happens when the economy contracts?

Liquidity and the business cycle

To understand the business cycle, we first have to Once the economy begins to grow, other sectors
understand liquidity. Liquidity tells us how easy ti is begin to spend more money a s well. Companies
to sell an asset for cash. In banks liquidity means invest in capital goods such as machines, they
m e e t i n g o b l i g a t i o n s without incurring losses. buy more inventory and they ship more goods
Therefore, managing liquidity is one of our most around the world. The economy is doing well but
important tasks. When banks begin to have liquidity inflation starts. This m e a n s that goods and services
problems, they stop lending money. In addition, fi get more expensive and the value of money goes
all the depositors suddenly decide they want their down because people cannot buy as much as they
money back, the entire market may be affected could earlier.
and we lose consumer confidence: people stop This is t h e r e a s o n t h e c e n t r a l b a n k d e c i d e s to r a i s e
spending money.
interest rates again. Because the money banks
The business cycle works like this: when the banks borrow from the central bank is more expensive, they
have been lending money and interest rates are low, also raise their rates. In this c a s e loans are not easy
there is growth in the economy. This is often a result to get and people stop borrowing money.
of the central bank lowering interest rates. More
people and companies take o u t l o a n s and there The next stage in the cycle is called contraction. The
e c o n o m y h a s s t o p p e d g r o w i n g a n d is b e g i n n i n g to
is more money in the system. People spend extra shrink. But central banks see the problem and lower
money on non-essential goods like restaurants, free- interest rates again. They hope this will motivate
time activities and holidays.
people to spend more money. Then the upward trend
begins again.

Speaking 3 Work in small groups. Explain one of the stages of the business cycle to your
group. Use the words in the box.

assets inventory liquidity market motivate obligations ship goods

shrink upward trend

4 Work in pairs. Choose five of the word partnerships ni bold ni the text ni 2
and make definitions for them. Ask another pair to guess the correct word
partnership for each definition.
5 Where ni the business cycle is your country at the moment? What do you need
to consider in order to decide this? Discuss.

62 8 Centra l banks a n d bankin g regula tions

 Listening 6 4 Listen to an investment manager talking to a journalist about the
27
economy. Are these sentences true (T) or false (F)?
1 When consumers pay lower interest rates, their instalment payments
go down. T
( / F)
( / F)
2 Lowering interest rates helps the economy very quickly. T
3 The currency of a country is always worth less when the central bank
lowers interest rates. T
( / F)
4 fI governments invest n
i new projects, they will have more debts. T
( / F)
7 Listen again and complete these slides from the interview.

seD
iut fo larnect banks Stimulating
• (I) interest rates the e c o n o m y
• lower rates and effect on economy
• borrowers have lower (2) - • more money to (3) - -and
invest
payments • money is (4) t o borrow

sreD
gna fo lower What governments nac od
interest rates • spend money on (7)
measures
• currency may lose (5)
• can (6) t o inflation • (8) jobs
Danger: government owes money which
needs to be (9)

Language

Present perfect continuous

We use the present perfect continuous to talk about things What has been happening ni the economy?
that began n
i the past and continue into the present.
We form the present perfect continuous with have/has been + Has the economy been growing?
-ing. We form negative sentences with have/has not been + -ing No, the economy hasn't been growing. It has
and questions with have/has + subject + been + -ing. been shrinking since last year.
We use for when we talk about a period of time and since Interest rates have been increasing for the last
w h e n we talk about a point in time. two quarters, since last July.

8 Complete these sentences with the correct present perfect continuous form of
the verbs in brackets.
1 What topics (you / discuss) in your training course?
2 - (read) an interesting book on company finance.
3 The phone - (ring) all morning and I can't get any work done.
4 The c u s t o m e r - (not keep up) with his payments.
Speaking 9 Work in pairs. Discuss these questions.
1 What is the most interesting thing you have been doing for the last month?
2 What have the newspapers in your country been writing about?
3 Have people in your country been going out to restaurants and cinemas or
taking holidays, or have they been saving money?
10 Work in small groups. Choose one of the slides in 7 and prepare a mini
presentation for your group.

Central banks and banking regulations 8 63

 Regulations
Speaking 1 Work in pairs. Discuss these questions.
1 Do you know any regulations for banks in your country?
2 Why is it important to regulate the way banks do business? Do you think
it is better for each country to regulate its banks or should there be
worldwide laws?

FSA want public bank investigation yb Mayr Am

l ond
The UK Financial Services Authority says the overseeing regulator should
have power to investigate bank failures and publish such information.

Reading 2 Match these headlines from financial newspapers (1-6) ot the article
extracts (A-F).

"Financial crisis makes The amount of core capital, which consists of retained profits plus shareholder
governments take equity, has been raised. Governments are making sure that banks keep enough
a n o t h e r look at risk money on hand for crisis situations.

Bank bankruptcies Banks often raise cash by finding more shareholders. Several banks are
becoming problem thinking about this and hoping that the public si interested. However, they do
for c u s t o m e r s not want to reduce the dividend payments. The banks would like to keep their
shareholders happy.

Are the risks worth the When banks began failing due to liquidity problems, governments ni many
higher interest rates? countries had to step in and help. Some banks had made very risky loans and
could not recover the money. This meant that governments needed to think
about new regulations for banks.

Core capital Many banks were keeping a number of highly risky assets on their books.
requirements set by These loans were not backed up by collateral. However, the banks were able
governments to charge much higher interest for them. The problems began when the
borrowers began to default on these loans.

Ensuring bank When banks have a healthy balance of equity to risky assets, they can get
liquidity through a crisis more easily. Banks need to keep enough core capital on hand fi
their risky investments do not work out.

16
Several banks People want to trust their banks. They need to know that their money si
issuing n e w s h a r e s safe and they can withdraw it when they need it. Banks should be extremely
careful with the money customers deposit. Losing customers' money through
risky investments is certainly not what a trustworthy institution would do.

3 Find words in the extracts in 2 that match these definitions.

1 money the bank earned and kept (article A)
2 money paid to investors from the profits of a company (article B)
3 how quickly an asset can be converted to cash (article C)
4 not pay back money you owe (article D)
5 investments which are not guaranteed (article E)
6 something or someone you can believe in (article F)

64 8 Central b a n k s a n d banking regulations

Language

Defining relative c l a u s e s
A defining relative clause identifies which person or thing we are talking about. tI gives essential, not just additional
information. There is no comma between the main clause and the defining relative clause
We can leave the relative pronoun out fi ti is the object of the relative clause but not fi ti is the subject.
S u b j e c t of r e l a t i v e c l a u s e O b j e c t of r e l a t i v e c l a u s e
People People who/that have been wanting to make The broker (who/that) the firm employed
(who, that) i n v e s t m e n t s c a n now borrow money more was very competent.
cheaply.
Things These are points w h i c h / t h a t a r e n o t f i n i s h e d R e s e r v e s are the amount of c a s h (which/
(which, that) from the last meet ing that) a bank needs to have.

4 Match 1-8 to a-h to make sentences, adding who, which or that. nI which
sentences can you leave out the relative pronoun?
1 Regulations are rules a) identifies credit card fraud.
2 Auditors are staff m e m b e r s b) sells s t o c k s a n d bonds.
3 We need a computer system c) have to be followed.
4 Money laundering is a system d) everyone needs at the start of
a meeting.
5 A broker age is a compa ny e) runs the meeting
6 An insider trader is a person f) exchanges illegal money for
legal money.
7 An agenda is a document g) makes money illegally with inside
knowledge about companies.
8 The chair is the person h) the bank employs to watch over
other departments.
Speaking 5 Work ni groups of four. You al work at Universal Bank. Look ta this information
and discuss the problem of liquidity facing the bank today.
12
Student A Stud ent B
You are in favour of highly risky assets. You are in favour of keeping retained profits.
+ high interest rates, good earnings + high liquidity
danger of defaults - fewer investment possibilities

Student C Student D
You are in favour of raising cash. You are ni favour of making more lower risk
I s s u i n g shares brings new investors investments.
Cutting back on dividends makes current investors g u a r a n t e e of repayment (or debt recovery)
unhappy. - earn less money on interest

Writing 6 You work at Universal Bank. Write a short report to your boss on the problems
facing the bank today. Write 80-100 words. Consider these points:
• capital r e q u i r e m e n t s • risk assessment when lending money
• money laundering • credit c a r d fraud

Introduction Conclusion a n d recommendations

I am writing this report to . . . In conclusion, I can say that ….
Findings I recommend that we …
I h a v e discovered that . . .

Central banks and banking regulations 8 65

 Economic change
Reading 1 Read this extract from the annual report of Watford &Co. Does the graph
illustrate interest rates or sales figures?

Over the last year we have seen different developments in

4.5 both interest rates on our loans and our monthly sales figures.
Interest rates began ni January at 2.5%. They then went up
53. slowly and levelled off in March at 2.65%. There was a modest
3 drop back to 2.5% in April but in May we saw a noticeable
increase until they peaked in June at 3.45%. In August they
2.5
fell suddenly again and bottomed out at 2.3% in September.
Then we saw a slight rise to 2.4% in October. Since then they
have been climbing steadily and have now finished the year
1/ at 3.75%.
0.5
Our sales figures have also fluctuated ni the past year. We
F A's started of ni January with figures of €80,000 and this figure
grew considerably over the next two months. They reached
a peak ni March at €120,000, fell slightly and then remained stable through April. Then in May we saw a modest
slump to €100,000 but ni June they plunged and continued to decrease rapidly until they hit a low at €45,000 ni July
and stagnated till the end of August. Luckily, they began ot recover ni September and improved consistently, reaching
€75,000 in October. They then soared in November and we ended the year at €115,000 - a substantial improvement.

Vocabulary 2 Look at the underlined words in 1 and write them in the correct column. Mark
the words as verbs (V), nouns (n) or verb phrases (up).
S o m e verbs c a n
also be used as Going up Going down Reaching Reaching Staying the Moving up
nouns: fall, drop, the top the bottom s a m e and down
rise, increase,
decrease, slump.

3 Match descriptions 1-4 to diagrams A-D.

1 Interest rates remained stable for a time and then fluctuated till they rose
noticeably and peaked.
2 There was a substantial rise ni profits, which then stagnated till they
slumped and hit a low.
3 We saw a gradual increase in spending, which levelled off for a time, then
climbed rapidly. —
4 Sales figures soared, then went down moderately and then decreased rapidly.

Speaking 4 Work ni pairs. Student A, tell Student B about the sales figures ni .l Then swap
roles. Student B, tell Student A about the interest rates in .1 Find different words
to use t h a n t h e o n e s in t h e text.

66 8 Central banks and banking regulations

 Review
Language 1 Complete these sentences with the gerund of the verbs ni the box.
authorise control invest liquidate maintain meet trade

1 One task of a central bank is the issue of banknotes.

2 consumer confidence is important for a healthy economy.
obligations is necessary for banks who want to stay in business.
4 Companies _ in capital goods is a sign that the economy is growing.
5 stocks based on inside knowledge is illegal.
6 inflation can be done by raising interest rates.
7 Raising capital can include _ - assets or finding new investors.
2 Complete these sentences with the correct present perfect continuous form of
the verbs in brackets. Then join the sentences using who or which.
1 The head of the department (speak) to employees. They
are often late for work.
2 We - (implement) regulations for money laundering. They
are designed to help us with the problem.
3 - (write) emails to different people. They are all late with
their loan repayments.
4 This is the report. Michael (work on) ti since Friday.
5 Since the financial crisis, governments (create) new
regulations. These regulations should help banks with liquidity problems.
Speaking 3 Work ni small groups. Take turns to talk about the economy in your country.
Use the phrases about trends on page 66.
4 Work ni pairs. Student A, look at the information on this page. Student B
, look at
the information on page 73. Follow the instructions.
Studen t A
Describe this graph for Student B to draw. Use as many different trend words as
you can. Then draw the graph Student B describes to you.

100

90

80

07

60

50

40

30

02

10
F M M

Writing 5 Write a paragraph describing the graph you drew ni 4. Then compare your graph
with the actual graph your partner described.

Central b a n k s a n d banking regulations 8 67

 P a r t n e r files: S t u d e n t A

2 P r o d u c t s in retail banki ng
Bank products Speaking exercise 8 page 13
Student A
1 You are a banker. Use the phrases in the Language box on page 13 to find out
what Student B, a customer, needs and to make suggestions.
2 Swap roles. You are the customer. You want to open an account to receive
your salary. You also need to be able to withdraw money at weekends or in the
evening. Answer Student B's questions.

4 Islamic banking
Review Speaking exercise 5 page 35
Student A
1 You w o r k in t h e retail s e c t i o n of a n I s l a m i c b a n k . Your c u s t o m e r h a s s o m e
questions about buying a car. Use this information to tell him/her about the hire
purchase agreement.

Ijarah Thumma Al Bai' (Hire purchase)

The bank buys an asset (such as a car)
for a c u s t o m e r. The c u s t o m e r leases the
asset from the bank. W h e n this c o n t r a c t
is over, t h e c u s t o m e r c a n buy t h e asset
at a fixed price. The fixed price is higher
because the customer pays the money
back over a longer time.

2 Swap roles. You are a corporate customer at an Islamic bank and you have some
questions about a joint venture. Ask your partner to explain this to you. Use
questions like these:
• How can I finance a business?
• Is there an Islamic product for this?
• Who contributes capital to it?
• How d o l e a r n money o n the project?
• How does the bank earn money?

68 P a r t n e r files
 5 T h e s t r u c t u r e of a b a n k
The structure of Speaking exercise 7 page 39
the b a n k Student A
Look at this organogram. Student B has the missing information. Ask questions to
find the missing information and complete the organogram.

Board of
Directors

6 Finance in companies
The b a l a n c e s h e e t Speaking exercise 7 page 47
Student A
You have some of the assets of a company for one year and Student B has
the liabilities. First find the missing words n
i equity/liabilities. Then read the
information to each other and write down the figures. Look at your partner's
information to check your answers.
This company has eleven million two hundred and thirteen thousand euros in assets.
The figures on Balance sheet
the balance sheet
are in thousands Assets €11,213 Equity
(000s):
Shareholders equity
€11,213 +000 = Current assets €5,145
€ 11,213,000
Cash €1,733 Liabilities
Accounts receivable €2,162
Inventory €1,250 Current liabilities
Non-current assets €6,068 Accounts payable
Tangible assets €4,046
Intangible assets €2,022 Non-current liabilities

Total assets €11,213 Total liabilities + equity E11,213

P a r t n e r files 69
 P a r t n e rfiles:S t u d e n tB

1 Money matters
Review Speaking exercise 5 page 11
Student B
You work for Homemaker Building Society. Answer a customer's questions.

Homemaker
Save and Build
are merging
Our building societies, Homemaker and Save and Build, are
merging. W e are closing some branches but we are also opening new,
better ones. We are planning to offer more products with low
i n t e r e s t r a t e s ..

2 Prod ucts in retail banking

Bank products Speaking exercise 8 page 13
Student B

1 You are a customer. You have a current account. You want to be able to put
money into a deposit account every month and to pay bills of differing amounts.
Answer Student As' questions.
2 Swap roles. You are the banker. Use the phrases in the Language box on page 13
to find out what Student A, a customer, needs and to make suggestions.

Telephone helplines Speaking exercise 3 page 16

Student B
1 Listen to an online banking helpdesk representative and take notes.
2 Swap roles. You are an online banking helpdesk representative. Explain to a
customer how to change a standing order using the information below.

1 log in - password 4 type in amount

2 choose action - 'Standing order' 5 click 'Enter'
3 click 'Change' 6 print page

70 P a r t n e rfiles
 3 Personal loans and credit
Review Speaking exercise 5 page 27
Student B
1 You want to apply for a mortgage. Student Ais the banker. Look at A and answer
Student A's questions.
2 Swap roles. You work in banking. Student Awants to apply for a credit card.
Look at B and ask questions to get the information you need to fill in the form.

• house -0.052£
• £50,000 deposit
• colateral: hesar in a ocmpnay
• 20-year mortgage
• fixed interest aret
capital payments
• interest and

Customer's monthly salary:

Purpose: why customer needs card:
Additional functions:
Debit at end of month or carry balance?
Other features:

4 Islamic banking
Review Speaking exercise 5 page 35
Student B
1 You are a retail customer at an Islamic bank and you have some questions about
buying a car. Ask your partner to explain this to you. Use questions like these:
• How can I buy a car without paying interest on the loan?
• Is there an Islamic product for this?
• Is it expensive?
• How does the bank earn money?
2 Swap roles. You work in the corporate banking section of an Islamic bank. Your
customer has some questions about a joint venture. Use this information to tell
him/her about the joint venture agreement.

Musharaka (Joint venture)

This is used for business partnerships.
Each partner contributes capital to the
project. The bank and the customer
share the profits or the losses. This
helps companies to finance projects. It
is a type of PLS product.

P a r t n e rfiles 71
 5 The s t r u c t u r e of a bank
The s t r u c t u r e o f Speaking exercise 7 page 39
the bank Student B

Look at this organogram. Student Ahas the missing information. Ask questions to
find the missing information and complete the organogram.

Managing
Director

Chief Retail Human

Financial Banking Resources
Officer Director Director

Group Risk Financial

Advisers
Internal Loan
Audit Recruitment
Modification

6 Finance in com pan ies

The b a l a n c e s h e e t Speaking exercise 7 page 47
Student B
You have some of the liabilities of a company for one year and Student Ahas the
assets. First find the missing words in assets. Then read the information to each
other and write down the figures. Look at your partner's information to check your
answers.

This company has two million and twelve hundred thousand in equity.

The figures on Balance s h e e t

the balance s h e e t
are in thousands
(000s):
Assets Equity €2,012
€11,213 +000 = Current assets
Shareholders' equity €1.300
€ 11,213,000 Retained earnings €712
Cash
Accounts receivable
Liabilities €9,201
Current liabilities €5,498
Non-current assets Accounts payable €3,678
Taxes €1,820
Intangible assets Non-current liabilities €3,703
Total assets €11,213 Total liabilities +equity €11,213

72 P a r t n e r files
 7 Corporate banking
Loans, credit lines Speaking exercise 7 page 55
a n d leasing Student B

You area banker A

w
en c
1 You are a banker. A new customer has come to you. His/Her business is
expanding and he/she needs to borrow money, or arrange a credit line or leasing
agreement. Find out about your customer's business. Discuss the products and
c o m e to an agreement.

2 Swap roles. You are a businessperson. You have experienced cash flow problems
and cannot pay your bank loan at the moment. You have some ideas of how you
can restructure your company to save some money. You also want to liquidate
some assets which you don't need for your production. Decide what type of
business you have and list ways you plan to save money and generate cash. Try
to convince your banker that you need some time to do this.

8 Central banks and banking regulations

Review Speaking exercise 4 page 67
Student B
Draw the graph Student Adescribes. Then describe this graph for Student Ato
draw. Use as many different trend words as you can.

100

90

80

70

60

50

40

30-

T s N D

P a r t n e r files 73
 Audioscript

Unit 1 Money matters 3 My name is Moira. I work in an investment bank.

I arrange mergers and takeover bids for companies.
I also give companies financial advice and help
1 A
: Good morning. AFC Bank, can I help you? them sell their shares.
B
: Good morning. I am a customer of the bank
and I want to borrow some money.
:A Yes, sir. Which department do you want?
1 We need a financial plan for the future. Do you have
Er . . . what is the money for? any ideas?
2 I want to buy a house. How m u c h is the interest on a
B
: I want to buy a flat.
:A Just a moment. Oh yes, Mr Sharma is free.
housing loan?
3 I need a place for important things. Do you have a
2 A
: a interested ni shares of
Good morning, I m place here at the bank?
NewCom. 4 We need some capital. Is it possible to sell shares of
B
: Oh yes. Just a moment. I see that the price is our company?
quite high at the moment. 5 I want to save some money and get interest on it.
:A I don't want to buy expensive shares and sell What kind of account is good for me?
them for less. I don't want to make a loss. 6 I need money for everyday things. What accounts
B
: I understand. AllTech looks good today. The do you offer?
demand for their shares is not so high at the 7 Our company wants to buy another company. Can
moment.
you help me with this?
:A That sounds interesting. I want to make a profit
with this investment .

6 03 Unit 2 Products in retail banking

6 06
:A What do you do every day?
B
: I work with large companies. They call us :A Good morning. Can I help you?
when they want to buy another company, for B: Yes, I need an account.
example. Then they make a takeover bid. :A What kind of account do you need?
:A And you help them? B: Next week I start my first job. I'm also moving to
B: Yes. They also sometimes want to join together my first flat. I need an account so I can receive my
with another company to make one company. salary and pay my bills.
That's a merger. A
: We can open a current account for you. Then you
2 :A Is your job interesting? can receive your salary by direct deposit.
B: What d o e s that mean?
B: Yes, it is. I help people when they buy a house
or a flat. A
: That means that your salary comes directly into
A: Do you also offer current accounts and deposit your account every month. You do not need to
accounts? deposit money yourself.
B: B: OK. I understand. And bills?
We offer some deposit accounts and we pay
interest on them. But I don't usually open :A e can set up standing orders for you.
W
accounts. I mostly work with mortgages.
B: What are those?
A
: With a standing order you can say how much you
A
: What happens in your job? want to pay someone every month.
B
: I do many different things. I sometimes open B: And w h e n t h e bills are for different a m o u n t s ? What
c u r r e n t a c c o u n t s or d e p o s i t accounts. can I d o then?
:A Do you do other things, too? A: Then I suggest we arrange direct debits. The person
B: Yes, I help people save for a pension. I usually who gets the money from you sends us a bill and we
work with private customers and small
companies.
pay it.
B: That sounds fine. What do I do when I need money?
5 04 :A You will get a bank card and then you will be able to
1 My name is Katya. I work in a retail bank. I offer use the cash dispenser to make withdrawals.
current accounts to customers. I also take deposits
B: OK. Can we open the account today?
from customers and help them save for their :A Of course. Just a moment and I'll just ...
pensions. € 07
My name is Sylvester. I work in a building society. A
: Good afternoon. UBE Bank helpline. Can I help you?
I also offer current accounts but I mostly arrange B: Yes, I hope so. I am having problems with online
mortgages. I take deposits from customers and offer
t h e m s p e c i a l d e p o s i t accounts.
banking.

74 Audio s c r i p t
:A What is the problem? :A Yes, because I travel a lot. Don't you think they
I have a password but it doesn't work. are useful in another country?
OK. First I n e e d your name. B
: Yes, but I don't want to pay interest, so l
Yes, it is Anish Chatterjee. That's A-N-I-S-H just go to an ATM. Don't you think that si a
C-H-A-T-T-E-R-J-E-E. good idea?
Your password has five letters and two numbers. A: It is out of the question for me because
Yes, that is right. s o m e t i m e s I c a n ' t find an ATM a n d I a l w a y s
OK. First go to 'Log in' and put in your password. have my card with me. It's just easier.
OK, I'll do that now. And then?
y 10
After that click on 'Proceed' and you will see the
page for your account. C[ = Caroline; M= Manager]
B
: Ah, I click on 'Proceed'. Yes, here is the page... C: Do you have a minute? I need to talk to you about
A: Next, do you see the information on the right? It a n account.
asks you what you want to do. M
: Yes, of course. What do you want to know?
Yes, I see it. I want to look at my statement. :C Mr Müller o f t e n o v e r d r a w s his a c c o u n t . This
Then click on the button for 'Statement'. Do you see h a p p e n s a b o u t e v e r y t w o months, w h e n his
it now? expenses are higher than his income.
B
: Yes, I do. M: Yes, I see. Does he cover his overdraft regularly?
Good. Is there anything else? C: Yes, he does. He always deposits enough money to
No, I think I am all right now. And at the end I log be in the black again.
out - is that right? M: Is the overdraft authorised? Does he also have to
A
: Yes. T h a t ' s it. pay penalties when he overdraws his account?
B
: Thank you so much. C: He has an overdraft facility of 2,500 euros a month,
A
: No problem. Call anytime you need help. That's why so he doesn't have to pay bank charges. But he
we're here. Goodbye. must pay interest when he is over that amount.
B
: Goodbye. M: Does he know that he mustn't go over the limit?
C
: Yes, he does, but his expenses are high. And then
he has to pay interest on the overdraft. When his
Unit 3 P e r s o n a l l o a n s a n d c r e d i t overdraft lasts for several weeks, it is expensive for
6 0 8 him.
M
: Yes, that's true. We charge more on overdrafts than
Do you travel the world? Does shopping everywhere o n loans.
sound interesting to you? Then call us to find out about C: So isn't it better for him to apply for a personal
our new multi-function Champion Credit Card! If you loan?
have a Champion card, you can pay for food, a hotel M: Yes, I think so. It seems he has a cash flow problem.
room, a concert ticket or rent a car without cash. fI you
Do you want to talk to him about this?
choose the debit option, you can pay for your purchases C
: OK. I can give him na application form and send
immediately. When you have a Champion card, you can him t o a loan officer to talk a b o u t the t e r m s and
use ATMs everywhere - just arrange a credit limit with the instalments. We can suggest an appointment
your bank. You can also carry a balance over from one on Friday.
month to the next. When you choose this option, your
monthly statement shows you how much interest you 4 11
have to pay. We know that young people like to travel, [C = Caroline; M = Mr Müller]
so you even get travel insurance with this card! You can C: Good morning, Mr Müller. I need to talk to you
also choose your repayment terms and get a PIN code a b o u t your account.
for online shopping. If you lose your card, just call our M : Is there a problem?
helpline number. Contact us at any time if you have C: Not really. I just see that you often overdraw ti and
questions about the card. We will be happy to help you. then have to pay interest on the overdraft amount.
What are you waiting for? M
: Yes. I have my own company and we sometimes
6 g 09 have cash flow problems.
C: I see.
1 A: I think a pre-paid card is very good to have. M
: If I do a job for a customer, I sometimes have to wait
B: I couldn't agree more but a multi-function card for several months for the money.
may be better. C: So you can't pay all your bills right away?
A: Why? M: Right. That's why I must have an overdraft facility. It
B: If you have a multi-function card, you can use c o v e r s my expenses.
ti like a credit card or withdraw money from an :C But ti can be the most expensive way for you to
ATM. Then you only need one card. b o r r o w mon ey.
A
: That's not a bad idea. I'll talk to my bank about M
: Do you have a better idea?
one. C: If you have a short-term loan, you don't have to
2 A
: Do you need a credit card? pay such high interest. The rates are lower than the
B: No, I usually use cash. I don't want to borrow overdraft facility.
money and pay it back later. M: Really? That sounds interesting.
A
: I see your point. C
: I have an application form here.
B: Do you have one? M: What d o I h a v e to do?

Audio script 75
 :C You just need to fill ti out and talk to a loan officer. PF: This is exactly why we opened this section. Many
M: Do I need to do anything else? customers asked us about these products. We are
:C No, you don't need to do anything else. You just very glad that you are one of our first customers in
have to give the loan officer information about your this new section of our bank.
income and expenses. If you decide that a loan is a
good idea, he will also explain the instalments to you.
M
: Thank you very much. 1 I was thinking about starting a new business and I
C: No problem, Mr Müller. was looking for someone to help me. So I went to
my bank. We talked about financing and they asked
me lots of questions about my business plan. I think
Unit 4 Islamic banking they're interested. They think I'll be able to make a
profit with my ideas.
Good afternoon, everyone. How much did you know 2 I need to buy some things for my business. They
about Islamic banking before the seminar this morning? cost a lot of money. I was looking for different ways
Now you are going to hear about our new section for to pay for them, when I heard about a product at my
Islamic banking. The idea for interest-free banking began bank. I talked to my banker and we discussed the
during the time of the prophet Muhammad. People things I need and how I can pay the bank back
weren't allowed to charge or receive interest. However, 3 I have some money which I want to invest in a
for years customers weren't able to find Islamic banks. business. I was trying to find a partner, and was
Many customers asked us about interest-free banking talking to a friend about the idea. He told me about
and other products. So we decided to open a section this product at the bank. So yesterday I talked to my
for these customers. First we needed a Shari'ah board banker and we now have an agreement.
because the banking laws had to follow Islamic economic
policies. This board explained to us how everything
worked. Finally, we offered our first interest-free a c c o u n t s
Unit 5 The s t r u c t u r e of a b a n k
to customers. We have many other products as well and 6 g 15
you will hear about them in tomorrow's seminar.
1 I take care of tailor-made products for corporate
4 13 clients. I work in the Corporate Banking
[PF = Peter Farrel: A
F = Abdul Farak] Department.
PF: Good afternoon, Mr Farak. Welcome to First Bank I am responsible for auditing the books of the
Tell me, where did you use to have your accounts? bank. I have to make sure that everything we do is
AF: Before this s e c t i o n of t h e bank o p e n e d , I u s e d to correct. I work in the Internal Audit Department.
go to a non-Islamic bank. I had a current account I help my boss with the preparation of financial
and a deposit account with AFG Bank. I used to get documents for the bank. I work in the Group
interest on both accounts. fI I overdrew my current Accounting Department.
account, I paid interest on it. The interest on my We are in charge of modifying corporate loans
savings account depended on the interest rates at
when customers have cash flow problems. We help
them to pay their loans back. I work in the Loan
And did you use to borrow money from your bank? Modification Department.
A
F
: Oh yes, lused to borrow money. For example, I
needed a loan to buy a car and I used to pay the bank We deal with managing investment portfolios for
the interest and the capital every month. I thought wealthy customers. I work in the Private Banking
about a mortgage but I didn't want to pay interest Department.
for such a long time. Then you opened this section My department is in charge of recruiting new staff
for Islamic banking. I closed my accounts and came members. We also train existing staff to help them
here. I now h a v e a current a c c o u n t a n d I like the idea do their jobs better. I work in the Human Resources
that t h e bank keeps my money safe for me. Department.
PF: And what about your overdraft? Was ti very 6g 16
A
F
: Yes, it was. Now, if l overdraw my current account, [A = Ali; J= Jo; D = Dan: S = Sarah]
I pay a fee but no interest. I also have a fixed-term A
: My name is A.il I really like my job in the bank. I
deposit account and earn money fi the bank report to my branch manager, who is above me
makes a profit. I don't get interest on either of in the hierarchy. I work with customers and sell
the accounts. standard products. I mostly work at the counter but
PF: And what did you decide about your mortgage? Do sometimes I have to work at the computer or have
you have one with us now? meetings with customers to discuss things.
J： I am Jo. I am responsible for deciding if corporate
A
F
: I have a special type of mortgage which follows
c u s t o m e r s get loans or not. I h a v e to look at the
Islamic law. I gave the bank a deposit and the
bank bought my house. Now they rent it to me, so company's finances and all their documents. Then
I don't have to pay interest. I pay the bank every I try to assess the risk. I have to make sure the
month and soon I will own it completely. I am very company has a good credit rating and I expect them
happy that I found this bank and can get these to pay the money back on time. When we have a
products today. problem, I talk to colleagues on the same level as
me in the Loan Modification Department.

76 Audio script
D: My name is Dan. I work for the HR director. I SJ: No problem - we've just finished one! The customer
have an assistant who is below me. Together we asked us to set up an evening to promote a new
are responsible for finding out what the other type of garden furniture. The event was in June, so
employees in the bank need. Then we decide which we began to organise it in January. The cost for the
training sessions to offer and we set up different event was €25,000 and we got €12,500 in January. We
courses. We deal more with people than with money s t a r t e d to m a k e a video for t h e m a n d this cost us
in our job. €2,800 altogether. Next we set up a photo shoot for
:S I am Sarah. In my department we have to oversee advertising.
the other departments. We are in charge of And how did that go?
compliance. We make sure that everyone follows all SJ.: Well, we planned this for the second week in
the rules in the bank. We look at the b o o k s and how February but had bad weather. W e had to wait till
departments do things and we report to the Chief the next week. So we had to pay the people who
Financial Officer, w h o s u p e r v i s e s our work. We are w e r e in t h e s h o o t e x t r a for their time. That cost us
on the same level as our colleagues in the Group €2,700.
Accounting Department but we don't work together :1 Oh! What did you have to do next?
very often. SJ.: The next step was to find someone to be in charge
of the evening. We found someone for €2,200. But he
got another job and we had to look again in March.
Good morning everyone and welcome to my In the end, we paid €3,500 for the new person we
presentation. My presentation is in three parts. First, 1 found.
am going to tell you about how banks get money. Then :I Mm, was that the end of the problems?
you are going to hear some information about loans and SJ: Not completely. We had a contract with the location
credit lines. The last part of my presentation is going to and the deposit was €2,500 in April. We didn't have
be about interest rates and our profit margin. Please feel enough cash then and used our overdraft. This cost
free to ask questions. us €150 in interest.
So to start off, how do banks get money? Customers open Sounds complicated to me. And then what
deposit accounts and give us money to keep safe for happen ed?
them. Sometimes they leave the money in the bank for In May another client suddenly cancelled an order.
many years. We use that money to make investments and Then we had to arrange a short-term loan with the
bank for €15,000. The first thing we did was pay
Now moving on to loans and credit lines. Customers €3,000 for the food
:1 Mhm. And then what happened?
can borrow money from us in different ways. They can
have an overdraft facility and borrow money for a short SJ: We hoped our problems were over. But at the
time. We earn money with these because we charge beginning of June the company told us that only half
the c u s t o m e r i n t e r e s t . We also h a v e credit lines for of their guests were coming, so we had to change
the order for the food. We missed the cancellation
companies. This means they can borrow money up to a
fixed amount and pay interest on it. These are for much deadline, so our costs came to an extra €1,500.
I: Oh! And how did the event go?
higher amounts than overdraft facilities.
SJ: The event was a big success and we made money
Finally, I am going to tell you about short- and long- on it. In June we invoiced the company for the rest
term loans and interest rates. These have fixed monthly of the money they owed us. In July they paid us
payments and the interest is included. With these loans the rest, so we got €12,500. Then we were able to
we have a good idea of how much interest we earn. pay back the bank loan of €15,000 plus the interest,
However, we also offer fixed a n d v a r i a b l e rates. These w h i c h c a m e to €375.
change when the interest rates change.
In conclusion, how do we make money? Our profit
4 19
margin is the difference between the amount we charge 548,209,120
for interest and the amount of interest we pay our 43,890,200
customers. The most difficult part for us is to balance 3 97.009.776,231
the s h o r t - t e r m financial n e e d s of c u s t o m e r s with our 867,334,097,124
long-term loans. 89,450,342
To s u m up, you h e a r d t o d a y a b o u t t h e money we
6 39,548
e lend them.
'borrow' from customers and the money w 6 y 20
You also heard about different forms of borrowing. Trainee: So what's an income statement exactly?
interest rates and our profit margin. Thank you very Trainer: Well, an income statement shows the operating
much for your attention. So, are there any questions?
revenues and expenses of a company for one
year. It is used with the balance sheet to find
out about the financial position of a company.
Unit 6 Finance in companies You see t h e s e n u m b e r s written in b r a c k e t s
6 18 here? They are minus numbers.
[| = Interviewer; SJ = Steve Jones] 8 g 21
I： Good morning, listeners. I'm here with Steve Jones
So, let's take a look at this i n c o m e s t a t e m e n t and t h e
of Events & Co. Steve, can you tell us about a
recent event?
one from last year. You can see that the company has
a net profit after tax of €1,046 million. This figure is a

Audioscript 77
 result of the sales minus the operating expenses, interest A
: Yes, here it is. Ameyah Batak. The company
and taxes. But we should look at the net profit margin is in Jakarta. Here is t h e full a d d r e s s a n d the
because it is importa nt for this to be over ten percent. details of the goods I plan to import.
To find it, we divide the net profit after tax by the sales. B
: Very good. It looks like you need a letter of
This means that w e divide the €1,046 million by €8,900 credit. I will start work on this right away.
million. This gives us a percentage of 11.75 percent. A
: Thank you very much.
That is a good sign because ti is over ten percent. Let's Good afternoon, Mr Ferrando. I have asked you
go to last year's income statement. Here we see that to come a n d talk to me b e c a u s e I h a v e s o m e
the company had 7.6 million in sales. This was lower
questions about your cash flow statement and
than this year. However, their net profit after tax was the loan application you made with us.
€996,000, meaning that the net profit margin last year B: Is there a problem?
was higher, at 13 percent. The lower profit margin this :A Well, we are looking carefully at your revenues
year might mean that their performance is not as good and expenses because we are worried about
as ti was last year. However, ti could also mean that they your ability to pay debts. In addition, the
had other expenses. So we have to look at other parts of
amount of money you owe seems to be
the income statement to decide if they are doing better quite high.
Yes, but fi you look at our income statement,
Another thing we need to see is how other companies
in the same field are doing. It could also mean that the
you will see that our net profit margin is higher
this year than last year.
whole sector had problems last year. So it is necessary to I see. fI you gave us your income statements
compare these figures with other companies. In addition, for the past several years, we would have a
we will need to check the balance sheet and their other better idea of your company's situation. I m a
financial documents before we make a final decision. Do
sure we will come to an agreement once we
you have any questions?
have all the facts.
3 A: Ms Park. How can I help you today?
Unit 7 Corporate banking B
: I wanted to speak to you about our business
plans. Abusiness adviser told me that if we
9 22
had the chance to buy several new shops, we
M
[ =Marta: P= Piotr] should do this. What do you think?
M
: Can you tell me what happens here in this :A Well, you have been very successful ni the last
department? How is it different from the Retail year, so I think it would be a good idea.
Banking Department? B
: And if I needed a credit line or a loan, would
P: I think the main difference is that we offer tailor- you be able to help me?
made products to most of our clients. We offer A: Of course. I know your company well and I am
standard products such as current accounts as well sure we can find the best solution for you. Why
but usually we need to find out more exactly what don't we take a look at the figures?
the client needs. We also deal with much larger
amo unts of money. 5g 24
M
: And what types of jobs are there in this department? [PK = Piotr Kot; L= Mr Lizak]
P: Well, I began as a credit analyst. That means I had PK: Good afternoon , Mr Lizak. What can I do for you?
to look carefully at the balance sheets and other L: Hello, M
r Kot. I'm interested in bringing my
financial documen ts and business plans. Then I had business to your bank.
to carry out a risk assessment. PK: May I ask why you are looking for a new bank?
M
: What is t h a t ? L: Of course. I started my textile business six years
P: Arisk assessment finds out if a customer is ago and stayed with my small local bank. But my
creditworthy. Basically, I had to ask myself, 'Could business has grown and I now have the chance to
a client pay us back fi we lent him or her money?'. I expand into several new cities. Therefore, I need
had to look at lots of different documents to get this financing. and my bank cannot handle these needs.
answer. Last year, however, I became a relationsh ip PK: I see. What kind of expansion are you planning?
manager and began to work directly with clients. L: I buy clothing and accessories from several different
M
: So your job is different now? suppliers. As my business is going well, I need to
P: Yes, now I help corporate clients with lots of expand. I plan to rent several shops but need to buy
different matters. This can be financing new furnishings such as shelves and display areas.
projects, helping them with expansion or arranging 5g 25
special loans, for example.
[PK = Piotr Kot; L= Mr Lizak]
60 2 3
PK: Good afternoon, M
r Lizak. What can I do for you?
1 :A Good morning, Ms Wichinski. I have a L: Hello, Mr Kot. I'm interested in bringing my
question for you. fI I wanted to buy goods from business to your bank.
Indonesia and import them to Poland, what PK: May I ask why you are looking for a new bank?
w o u l d I n e e d to do? L
: Of course. I started my textile business six years
B
: Do you have the information about the seller ago and stayed with my small local bank. But my
with you, Mr Kosnik? business has grown and I now have the chance to
expand into several new cities. Therefore, I need
financing and my bank cannot handle these needs.

78 Audio s c r i p t
PK: I see. What kind of expansion are you planning? KM: Well, we will need to discuss the strategies the
L: 1buy clothing and accessories from several different adviser recommends. The first thing you need to do
suppliers. As my business is going well, I need to is make a list of all the creditors you have and how
expand. I plan to rent several shops but need to buy much you owe them.
furnishings such as shelves and display areas K
: OK, I can put that together for you.
PK: Do you also n e e d to buy m o r e i n v e n t o r y ? KM: Then I would suggest liquidating some assets to pay
L: Yes, that as well. The problem is that I don't know t h e m off.
exactly how much I will sell but I have to pay my K
: What about selling off some buildings we don't need
s u p p l i e r s within a s h o r t time. for production at the moment?
PK: So, it sounds like you need two or three different KM: That could be a possibility. This is the type of
products. The first one I would suggest is a leasing advice our restructuring expert can give you. But
agreement. If you found shops with the necessary settling bills with creditors is the first step.
furnishings, we could arrange the leasing contract K
: And t h e n ?
for you. Then you would have monthly payments KM: O n c e we h a v e d o n e that, we will see w h e r e we
for as long as the lease, and you could decide at the are. The next s t e p will b e to d i s c u s s how we can
end fi you want to continue it or not. modify your loan with us. We will need to look into
:L What would the other possibility be? changing the terms and the repayments.
PK: Well, we could also look into a corporate loan. This K
: Thank you so much. I appreciate this help.
could be fixed for five years if it was necessary, for KM: This is what I a m h e r e for. It's also in our interest
example. Then you could buy all your furnishings to help you as we would like to recover our money,
and other things you needed and pay the too. I think fi we work together on this problem, we
instalments monthly or quarterly. will find a solution for both of us.
L: Is there anything else I would need?
PK: We should think about a credit line fi you wanted to
buy i n v e n t o r y for t h e new shops. Unit 8 Central banks and banking
:L And how w o u l d t h a t w o r k ? regulations
PK: You could overdraw your account up to a certain 8g 27
limit and pay only interest but no penalties. If your
liquidity was a problem, you might think about this [J = Julia; R= Robert ]
option. And fi you didn't need to overdraw your :J Good morning. Welcome to our T V news show
about the economy. I am here with Robert Jones,
account, you wouldn't pay anything. fI you didn't
have a credit line, ti would be expensive fi you who is going to tell us about ways to help the
overdrew your account. e c o n o m y grow.
:L You have given me agreat deal o
t think about! I wil R
: Good morning, Julia. Nice to eb here. Wel, there
take a look at all these possibilities and come and are different ways to help the economy when it has
talk to you again next week. been having growth problems. You know one of the
duties of a central bank is to regulate interest rates,
for example by lowering them. Borrowers who have
[KM = Karl Mayer; K = Mr Kowalski] been paying high interest rates suddenly have lower
KM: Good afternoon, Mr Kowalski. I'm afraid we have to instalment payments.
discuss the problems you are having with profit and :J How does this help?
liquidity in your company. R
: This can stimulate the economy because these
K
: Yes, I know. We're having a real problem paying our people have more money to spend. Others who
bills at t h e moment, Mr Mayer. have been wanting to make investments can now
KM: I think we first need to look into a way to manage borrow money more cheaply.
your debt. I would like to recommend an outside J: Does it happen immediately?
adviser to come and talk to you. We have worked R: After the central bank has lowered the interest
with several firms that do this type of work. rates, ti takes about two or three quarters until
K
: What would happen fi we agreed to see an outside this helps the economy. One problem is that the
adviser? currency of a country may also lose value. In
KM: We could arrange a meeting within a few days. The addition, growth stimulated by more money in the
adviser would visit you on your premises. system can lead to inflation.
K
: Do you think fi we can get some advice on how to :J And what can governments do?
generate cash, we could solve the problem? The government can spend money on stimulus
R:
KM: I think we need to do more than that. Would you measures like building schools and highways, or
be willing to consider restructuring the company fi putting money into the public transport system.
necessary? This creates jobs, and when people are working.
K
: Yes, I w o u l d the economy can begin to grow again. The problem
KM: The adviser will then work with you to look at ways here is that the government will then owe money
to cut your costs and create profit. This may involve w h i c h h a s to b e repaid.
changing suppliers or your accounting system, or :J Anything else?
even reducing the number of staff you have. R
: Another way relies on laws and regulations by the
K
: OK. And the next step? government such as lowering taxes and so on ...

Audio script 79
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 English for Banking &Finance si trapfothePearson Longman
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Level 2English for Banking &Finance si designed for students who have
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