Banking Regulation and Management

Purpose of financial statement analysis

• To measure bank's profitability & financial stability

• To identify strengths and weaknesses of the bank's financial position

• To audit the central bank’s operations

Objectives of Problem Loan Detection

• Minimize credit risk

• To increase the number of approved loans

• To reduce employee workload

Deposit to shareholder fund is calculated as :

• Shareholder fund / customer deposits

• Shareholder’s Equity / Total Deposits

• Total asset / total debt

• customer deposits / shareholder fund

Which of the following is a liquidity ratio?

• Core capital ratio

• Loans to total assets

Which of the following is NOT a corrective measure under a CWA?

• Increase in business expansion

• Restrict business growth

• Retrenchment

Which of the following is an account operations signal of a potential problem loan?

• Issuing cheques with insufficient funds

• Change in demand

• No clear successor