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