ASSIGNMENT The latest report of condition and income and expense statement for SME National Bank are as shown in the following tables:

SME National Bank (complete)

Income and Expense Statement (Report of Income in Millions of GHS)

Interest and fees on loans 50

Interest and dividends on securities 6

Total interest income 56

Interest paid on deposits 40

Interest on non-deposit borrowings 6

Total interest expense 46

Net interest income 0

Provision for loan losses 5

Noninterest income and fees 20

Noninterest expenses:

Salaries and employee benefits 10*

Overhead expenses 5

Other noninterest expenses 2

Total noninterest expenses 17

Net noninterest income -2

Pretax operating income 8

Securities gains (or losses) 2

Pretax net operating income 10

Taxes 2 Net operating income 8

Net extraordinary income -1

Net income 7

*Note: the bank currently has 40 FTE employees.

SME National Bank

Report of Condition (In Millions of GHS)

Assets Liabilities

Cash and deposits due from banks 100 Demand deposits 190

Investment securities 150 Savings deposits 180

Money mkt funds sold 10 Time deposits 470

Net loans 700 Money mkt funds purchased 80

(Allowance for loan losses = 25) Total liabilities 920

(Unearned income on loans = 5) Equity capital

Net Fixed Assets 50 Common stock 20

Surplus 35

Total assets 980 Retained earnings 35

Total Capital 80

Total earnings assets 860 Interest-bearing deposits 650

Using these statements, calculate the following performance measures:

ROE Asset utilization

ROA Equity multiplier

Net interest margin Tax management efficiency

Net noninterest margin Expense control efficiency

Net operating margin Asset management efficiency

Earnings spread Funds management efficiency

Net profit margin Operating efficiency ratio

What strengths and weaknesses are you able to detect in SMEs performance?