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
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?
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