Question
Mega Bank (MB) has the following balance sheet and income statement. Balance Sheet Assets Liabilities and Equity Cash and due from banks 9000 Demand deposits
Mega Bank (MB) has the following balance sheet and income statement.
Balance Sheet
Assets
Liabilities and Equity
Cash and due from banks
9000
Demand deposits
19000
Investments
23000
NOW accounts
89000
Repurchase agreements
42000
Retail CDs
28000
Net loans
90000
Debentures
19000
Fixed assets
15000
Common stock
12000
Other assets
4000
Paid-in capital
4000
Retained earnings
12000
Total assets
183000
Total liabilities/equity
183000
Income Statement
Interest on fees and loans
9000
Interest on investment securities
4000
Interest on repurchase agreements
6000
Interest on deposits in banks
1000
Total interest income
20000
Interest on deposits
9000
Interest on debentures
2000
Total interest expense
11000
Net interest income
?
Provision for loan losses
2000
Noninterest income
2000
Noninterest expense
1000
Income before taxes
8000
Taxes
3000
Net income
?
1-What is MB's net interest margin?
2-What is MB's spread?
3- What is MB's overhead efficiency?
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Fundamentals of Multinational Finance
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
5th edition
205989756, 978-0205989751
