Explain how the banks decisions to increase loan loss provision will affect the above balance sheet and income statement.

Balance Sheet (all values in ) Assets Cash Deposits with other Fls Investments (OECD gov. bonds) Repo Agreement Loans Premises Income Statement (all values in ) Interest Income Interest Expenses Provision for Loan Losses Non Interest Income Non interest Expense Taxes 150 1,500 15,000 1,400 17,225 1,865 34,790 2,700 1,650 180 2,120 1,000 90 Liabilities Deposits Rev Repo Agreements Equity TL 21,000 9,700 4,090 34,790