QUESTION 21 IsBank Kosovo Branch has the following balance sheet. a) Do you think it is a good idea for Isbank Kosovo to hold treasury bills and reserves? Why or why not? Please note that reserve requirement ratio in Kosovo is 10%. b) Assume that all assets and liabilities have floating interest rate. Suddenly interest rates doubled in the market, and expected to be on a high level for a long time. Would Isbank Kosovo be better off or worst off? Explain. (20 points) Please calculate and explain both a) and b) based on current quarter (30.09.2020). BANK Ralance sheet as at: 20.06.2010 Euro 900 Previous quarter 30.06.2020 Current 30.09.2020 Assets 7.509 6,617 2463 0 76.381 Caims on banks Treasury Investment Securities Loans and advances to customers Property and equipment Intangible asets Deferred tax Other Total assets 77.181 2.530 M45 100,776 246 106,999 Liabilities Customer Deposit Due to banka Other borrowed funds Deferred Other liabilities Total Liabilities 77574 4.595 5 046 19.113 150 2.581 O 2.154 95 445 2.186 29.SOS Shareholders' equity 30 000 30.000 18 725 700 Capital Reserves Ried Professuren previous year Current Year Profit /aai Other equity capital components Total shareholder's equity 775 0 11271 1141 Total abilities and shareholder's equity 100,776 106.939 QUESTION 21 IsBank Kosovo Branch has the following balance sheet. a) Do you think it is a good idea for Isbank Kosovo to hold treasury bills and reserves? Why or why not? Please note that reserve requirement ratio in Kosovo is 10%. b) Assume that all assets and liabilities have floating interest rate. Suddenly interest rates doubled in the market, and expected to be on a high level for a long time. Would Isbank Kosovo be better off or worst off? Explain. (20 points) Please calculate and explain both a) and b) based on current quarter (30.09.2020). BANK Ralance sheet as at: 20.06.2010 Euro 900 Previous quarter 30.06.2020 Current 30.09.2020 Assets 7.509 6,617 2463 0 76.381 Caims on banks Treasury Investment Securities Loans and advances to customers Property and equipment Intangible asets Deferred tax Other Total assets 77.181 2.530 M45 100,776 246 106,999 Liabilities Customer Deposit Due to banka Other borrowed funds Deferred Other liabilities Total Liabilities 77574 4.595 5 046 19.113 150 2.581 O 2.154 95 445 2.186 29.SOS Shareholders' equity 30 000 30.000 18 725 700 Capital Reserves Ried Professuren previous year Current Year Profit /aai Other equity capital components Total shareholder's equity 775 0 11271 1141 Total abilities and shareholder's equity 100,776 106.939
