Suppose your bank has stable business (for already more than 10 years) of selling annually 10.000 euro corporate bullet 10Y maturity loans with fixed external annual rate equal 5%. The bank has also attracted 80.000 Euro of retail current accounts with external rate 0.01% and 40.000 Euro of corporate current accounts with external rate equal to 0.2 times overnight market rate. The excess of deposits is placed at CNB earning overnight market rate. (Overnight market rate = 3%)

1) Draw the bank balance sheet

2) Calculate the (annual) net interest income of the bank. What part of the income is generated by loans and what part by deposits?

3) Calculate BPV of the bank, draw the IR Gap report