Chapter Three: Balance Sheet Structure and Management 3.1 Composition of the Balance Sheet Asset-Liability Management (ALM): comprises strategic planning.

Slides:

Advertisements

Similar presentations

Market risk management of public debt First Annual Meeting of Latin American and Caribbean Public Debt Management Specialists Ove Sten Jensen & Morten.

Advertisements

Credit portfolio risk management A.N. K. Mizan. Risks faced by the banks Credit Risk Interest Rate Risk Liquidity Risk Price Risk Foreign Exchange Risk.

BANK as Financial Intermediary

31/12/2011 Overview. 2 Net Operating Earnings and ROE NIS Millions 8.6% 9.7% 1.5% 12.6% 8.0%

1 BFS Coursework Seminar Part Two: Measurements of Risk.

Management of Working Capital

1. Bankwide Balance Sheet Highlight

Money, Banking, and the Federal Reserve System

Council 23 rd November 2007 Financial Statements for the year ended 31 st July 2007.

> > > > Financing and Investing Through Securities Markets Chapter 18.

Copyright © 2000 by Harcourt, Inc. All rights reserved. 5-1 Chapter 5 Overview of Financial Statements For Depository Institutions.

Asset Liability Management – Determining & Measuring Interest Rates

Managing Liquidity Banks can experience illiquidity when cash outflows exceed cash inflows. They can resolve any cash deficiency either by creating additional.

The Role of the Actuary in a General Insurance Company Yangon, Myanmar 14 July 2014 Scott Yen.

Results of «Ak Bars» Bank Group in according with IFRS FY’2012.

Presented by 9164 – Jenovah Carl Fernandes 9117 – Ashwini Jadhav 9108 – Amit Bhamare 1.

Personal Financial Statements (Preparation and Analysis)

FINANCIAL MANAGEMENT FOR SMALL AND MEDIUM ENTERPRISES

Which cost of funds measurement should a bank use ? -The historical average cost of funds is useful in assessing past performance. -The marginal cost specific.

1 Trend and Ratio analysis of national banking sectors – a European experience St. Petersburg, 8-9 June 2006 Michael Olsen The views expressed are mine.

Goals  Prepare a pro forma cash flow statement.  Prepare a pro forma income statement.  Prepare a pro forma balance sheet.

An Asset/Liability Management Overview

Developing Management Skills Understanding Financial Statements.

© 2009 South-Western, a division of Cengage Learning 1 Chapter 9: FINANCE Using Funds To Maximize Value.

Monetary Policy Controlling the expansion and/or contraction of the money supply Influences the cost and availability of credit Fractional Bank Reserves.

ADDITIONAL INFORMATION FOR ANALYSTS 27 March 2012.

Financials Start up Cost Source of Funds EquityLoans $20K$25K $45K Operational costs Fixed$43,085$113,700$281,840 Variable$29,570$163,220$460,975.

Chapter 7 Commercial bank financial statement Salwa Elshorafa 2009 © 2005 Pearson Education Canada Inc.

Chapter 7 Commercial bank financial statement Salwa Elshorafa 2009 © 2005 Pearson Education Canada Inc.

1 Understanding the Financial Statements Lecture No.35 Professor C. S. Park Fundamentals of Engineering Economics Copyright © 2005.

The Federal Reserve System Chapter 15. Goals & Objectives 1.Structure of the Federal Reserve. 2.Regulatory responsibilities of the Fed. 3.Fractional Reserves.

Overview of Financial Statement Analysis Chapter I.

Asset Liability Risk Management..  Risk Identification  Risk Measure  Risk Monitor  Risk Manage.

CHAPTER SIX Asset-Liability Management: Determining and Measuring Interest Rates and Controlling a Bank’s Interest-Sensitive And Duration Gaps The purpose.

Chapter 41 Part 2: Bank Financial Statements, Risks, and Valuation Chapter 4: Sources and Uses of Bank Funds and the Risks of Banking Chapter 5: Accounting.

Measuring and Evaluating Bank Performance 6 July 2009 Ms. Kashmirr C. Ibanez.

Asset Liability Management

Managing Market Risk. Board of Directors The Boards defines –Market risk –Management policies –Procedures –Prudential risk limits –Review mechanisms –Reporting.

Financial Management Chapter 17. Define finance and explain the role of financial managers. Describe the components of a financial plan and the financial.

PowerPoint Presentation by Charlie Cook Copyright © 2004 South-Western. All rights reserved. Chapter 13 Depository Institution Management and Performance.

Asset Structure Assets Cash on Hand and in Current Accounts 86 Deposits Maturing within one Month441 Balances with the Central Bank57 Government Debt Instruments412.9.

Portfolio Management for Institutional Investors. Banks. Jakub Karnowski, CFA Portfolio Management for Financial Advisers.

©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Liquidity & Reserve Management Strategies & Policies

Financial Management Chapter 17.

RATING OF BANKS. Business Risk of Banks Business risk –Operating risk –Regulatory risk –Environmental risk –Ownership structure –Government support –Governance.

Chapter Four: Profitability 4.1 Importance of Profitable Banks Profitability, in terms of retained earnings, is a key source of capital generation. A sound.

1 Banking Risks Management Chapter 8 Issues in Bank Management.

Financial Management Decisions n Investment: What assets to own? n Financing: How to pay for those assets? n Dividend: What to do with Net Income?

Introduction (5) Bank financial statements (1) Balance Sheet (B) Liabilities  Two major categories of liabilities are included in the balance sheet: (1)

1 COMMERCIAL BANK MANAGEMENT 1. 2 MEASURING AND EVALUATING THE PERFORMANCE OF BANKS PERFORMANCE REFERS TO HOW ADEQUATELY A BANK MEETS THE OBJECTIVES IDENTIFIED.

Asset Liability Management in Banks-1 Fairuz Chowdhury Lecturer, BBS.

CHAPTER 1 AN INTRODUCTION TO FINANCIAL INSTITUTIONS, INVESTMENTS & MANAGEMENT ELEVENTH EDITION Basic Finance 1.

Liquidity & Reserve Management Strategies & Policies

Financial Statement Analysis

Banking and the Management of Financial Institutions

MCF 304: Bank Management Lecture 3.2 Capital Adequacy.

CHAPTER FOUR The Financial Statements of Banks and Some of Their Closest Competitors

FINANCIAL MANAGEMENT FOR SMALL AND MEDIUM ENTERPRISES

CHAPTER SIX Asset-Liability Management: Determining and Measuring Interest Rates and Controlling a Bank’s Interest-Sensitive And Duration Gaps The purpose.

CHAPTER FOUR The Financial Statements of Banks and Some of Their Closest Competitors

الأساسيات والاتجاهات الحديثة

Balance Sheet & Income Statement

CHAPTER 8 FINANCIAL PLANNING. CHAPTER 8 FINANCIAL PLANNING.

Introduction & Terminology

FINANCIAL MANAGEMENT FOR SMALL AND MEDIUM ENTERPRISES

FINANCIAL MANAGEMENT FOR SMALL AND MEDIUM ENTERPRISES

Asset & Liability Management

Presentation transcript:

Chapter Three: Balance Sheet Structure and Management 3.1 Composition of the Balance Sheet Asset-Liability Management (ALM): comprises strategic planning and implementation and control processes that affect the volume, mix, maturity, interest rate sensitivity, quality, and liquidity of a bank’s assets and liabilities. Primary goal of ALM to produce a high-quality, stable, large and growing flow net interest income. Goal accomplished by achieving the optimum combination and level of assets, liabilities, and financial risk.

3.2 Asset Structure Assets(%) Cash and balance with the Central Bank3.37 Investment Securities12.61 Proprietary securities at market value4.48 Placements with banks and credit inst’s9.28 Loans and advances to customers63.28 Other investments – Subsidiaries, etc.0.00 Fixed assets net of depreciation6.96 Other assets0.02 Total100.00

3.3 Liability Structure Liabilities(%) Due to other banks and credit inst’s44.12 Funding for trading (investment) portfolio - repurchased securities 2.45 Due to other customers / depositors25.44 Certificates of deposit4.23 Other liabilities4.06 Amounts owed to government inst’s0.03 Due to international lending agencies3.04 Subordinated debt3.04 Shareholders’ equity13.58 Total100.00

3.4 Managing Risk Effectively Key components of effective risk management: An established line function at highest level of bank management hierarchy, specifically responsible for risk management. An established, explicit, and clear risk management strategy and a related set of policies with corresponding operational target. Appropriate formalization and coordination of strategic decision-making in relation to risk management process.

Bank business and portfolio decisions should be based on rigorous quantitative and qualitative analyses within applicable risk parameters. Systematic gathering of complete, timely, and consistent data relevant for risk management, and provision of adequate data storage and manipulation capacity. Development of quantitative modeling tools to enable the simulation and/or analysis of the effects of changes in economic, business, and market environments on a bank’s risk profile and the related impact on its liquidity, profitability, and net worth.