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The document provides financial data for Bank B, including balances, interest rates, and additional information about loans and liabilities. It also poses questions regarding the bank's net interest income ratio (NIM), return on assets (ROA), return on equity (ROE), and liquidity positions. Furthermore, it includes scenarios for calculating changes in net interest income and net profit based on various financial metrics.

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lemoncy1202
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18 views2 pages

Example

The document provides financial data for Bank B, including balances, interest rates, and additional information about loans and liabilities. It also poses questions regarding the bank's net interest income ratio (NIM), return on assets (ROA), return on equity (ROE), and liquidity positions. Furthermore, it includes scenarios for calculating changes in net interest income and net profit based on various financial metrics.

Uploaded by

lemoncy1202
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. Bank B has the following figures (average balance, average interest rate).

Unit: Billion VND


Interest Interest
Items Balances Items Balances
rate (%) rate (%)
Current and non-
Cash on hand 420 1,500 1.5
term accounts
Balances with the State Saving accounts
180 1.5 1,820 5.5
Banks (short-term)
Balances with and loans Saving accounts
to other credit 250 2.5 (medium and long- 1,410 7.5
institutions term)
Borrowings from
Treasury Bills 4 other credit 620 5.5
institutions
Valuable papers
+ Face value 520 1,200 8.8
issued
+ Purchase price 420 Other liabilities 410
Loans to customers
2,310 9.5 Owners’ equity 350
(short-term)
Loans to customers
1,470 11.5
(medium-term)
Loans to customers
1,850 13.5
(long-term)
Other assets 410
Total liabilities and
Total assets 7,310 7,310
equity

Additional information:
+ 10% of short-term loans and 5% of medium and long-term loans are overdue and have not yet
earned interest. Other income is 25 billion VND, other expenses 20 billion VND; The corporate
income tax rate is 20%.
+ Group 1 loan accounts for 70%, group 2 loan accounts for 20%, group 3 loan accounts for 3%,
group 4 loan accounts for 5% and group 5 loan accounts for 2% of the total outstanding loans.
The value of collateral (deducted) group 2 loan is 700 billion VND, group 3 loan is 300 billion
VND, group 4 loan is 300 billion VND, group 5 loan is 50 billion VND.
Request:
1. What is bank B's net interest income ratio (NIM)?
2. What are Bank B's ROA and ROE respectively (Knowing that the bank has used 50% of the
total provision made to handle risky loans)?

2. If interest rate-sensitive assets equal VND 500 million and interest rate sensitive liabilities
equal VND 400 million, what is the expected change in net interest income if interest rates
increase by 1%?

3. A bank has total interest income of $67 million and total non-interest income of $14 million.
This bank has a total interest expense of 35 million USD and total non-interest expenses
(excluding credit risk provisioning costs) of 28 million USD. The cost of credit risk provisioning
is 6 million USD and corporate income tax is 5 USD. What is this bank's net interest income?
What is the bank's net profit?

4. If a bank has a positive interest rate gap (GAP), an increase in interest rates will cause interest
income to __________, interest expense to __________, and net interest income to __________.

5. The bank's ROA increased by 25%, financial leverage increased by 25%. What will the bank's
ROE be?

6. When a bank's liquidity supply is greater than its liquidity demand, what will be the bank's net
liquidity position?

7. ABC Commercial Bank owns 12 billion VND of treasury bills and 05 billion VND of
secondary reserves. The bank also signed a credit limit contract with customers for an amount of
6 billion VND. Other credit institutions loans of VND 8 billion and SBV loans of VND 2 billion
have matured. What is the net liquidity position of ABC Commercial Bank?

8. Suppose XYZ Commercial Bank has 2 loans: 50 million VND, term of 01 year, interest rate of
10%/year and 50 million VND, term of 2 years, interest rate of 12%/year. To obtain funds for
loans, the bank borrowed VND 100 million on the interbank market for a term of 1 year with a
fixed interest rate of 6%/year. Assuming other factors remain unchanged, in terms of interest
rates, what position is this bank in?

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