Q2. Billsam Consult, a management and finance consultancy firm, has employed you as a fresh graduate to join their financial analyst team. The firm has provided you with data of three performing local banks in Ghana for review analysis to be published in their annual journal titled, Banking in Ghana. (See page for the data) Required: a) Using ratios, analyze the profitability and the solvency of the three-local banks from 2015 to 2017. (15 marks) b) Based on the analysis in (a), discuss three causes of a declining Return on Equity (ROE). ( 6 marks) c) Explain two determents of bank performance. (4 marks) d) Explain the term Capital Adequacy Ratio and how it is computed (5 marks)

Table One FINANCIAL STATEMENT ANALYSIS OF BANKS IN GHANA FOR 2015-2017 THE AMOUNTS ARE RECORDED IN THOUSANDS OF GHANA CEDIS GCB ADB CAL 2015 2016 2017 2015 2016 2017 2015 2016 2017 731,436 884,488 894,400 180,574 193,314 309,611 242,911 248,377 345,237 867,285 1,062,692 1,113,153 273,081 278,457 406,904 388,415 357,446 446,309 135,849 178,204 218,753 92,507 83,933 97,293 145,504 109,069 101,072 425,570 590,270 756,876 262,828 279,939 309,742 352,738 345,361 237,972 net interest income Total operating income Net non- interest income total operating expense net income before tak income tax net income after tax cash and cash equivalent loans total assets total equity total debt total deposits 350,276 105,541 446,782 147,775 308,894 96,179 -100,197 21,222 -105,714 35,688 47,339 20,829 213,197 42,495 12,085 4,882 208,337 63,171 244,735 299,007 212,715 -78,975 -70,026 26,510 160,042 7,203 145,166 544,683 1,179,975 1,022,684 483,967 610,563 951,675 258,014 428,756 512,376 1,492,623 1,412,977 2,099,330 1,088,071 1,005,302 1,139,356 1,806, 115 1,966,394 1,853,674 4,641,166 6,049,604 9,558,151 2,134,147 3,035,493 3,545,143 3,351,039 3,599,355 4,212,638 816,617 1,015,113 1,113,150 332,893 454,778 479,013 505,863 502,768 647,427 3,824,549 5,034,491 8.445,001 1,801,254 2,580,715 3,066,130 2,845,176 3,096,587 3,565, 211 3,368,406 4,276,775 6,956, 190 1,513,509 2,147,450 2,541,010 1,544,523 2,312,391 2,428,201 Page 3 of 4