Commercial bank financial statement

Bank Assets

Bank Liabilities

Income Statement

Evaluate Bank Performance

Stakeholders

Importance of
profitability

4 types

Investment Securities

Reserves

Physical Assets

Loans

Earning VS
Non-earning assets

5 major items

Deposits

Borrowings

Reserve Funds

Other Liabilities

Share Capital

4 sections

Interest Income (loans,securities)

Interest Expense (paid to 3rd party)

Noninterest Income(service charges,fin.activity fees)

Noninterest Expense(wages,equipment expense)

4 Criteria for
GOOD bank

Stability & Financial Performance

Service & Product Quality

Transparency

Customization

3 ways evaluation

Liquidity Ratio

Solvency Ratio

Profitability Ratio
(ROE)

6 Bank Risk

CAMELS Rating

External Users

Internal Users

building, machines, lands

process checks
satisfy withdrawals

interest revenue

Earning: interest&Income bearing
Non-earning: not generate income

shareholder contribute for starting bank

accumulate over the yr from undistributed profit

money owned by customers

borrow from central&other bank

Interest Bearing
Liabilities

Non-interest
Bearing Liabilities

Demand deposit (checkable acc,pay no i%)

Negotiable order of withdrawal(NOW)

Automatic transfer from saving(ATS)

Money market deposit accounts(MMDAS)

Saving & Time deposits

Shareholder's equity

  • ownership interest
  • bank's capital
  • common stock
  • bank cumulative net income
  • liquidity risk
  • credit risk(borrower default)
  • market risk (loan)
  • operational risk
  • reputation risk(bank position)
  • legal risk(penalty)
  • Capital adequacy (maintain capital)
  • Asset quality (credit risk w loan)
  • Management quality (identify,monitor,control risks)
  • Earning (quantity,trend)
  • Liquidity (sources of fund)
  • Sensitivity to market risk (chaneg in price affect earning)
  • investors
  • government
  • general mass&media
  • labour unions
  • central bank
  • managers & owners
  • employees

provide economic
security

keep saving safe,
economy moving