1. The following is a summary of the accounts of Crocked Bank (bn)

Balance Sheet
Assets
Cash and balances with central banks	120
Derivative financial instruments	229
Net loans and advances to customers	312
Other assets	10
Premises etc	30
Total Assets		701
Liabilities
Customer deposits	214
Bank deposits	16
Short term funding	27
Long term borrowings and debt securities in issue (at historic cost)	50
Derivative financial instruments	229
Trading liabilities	36
Total Liabilities		572
Equity
Common equity: par value + capital surplus	5
Other Reserves	16
Shareholders equity	64
Retained earnings	44
Total Equity		129
Total Liabilities and Equity		701
Income statement
Net Interest Revenue	5
Other Operating Income	6
Net Gains (Losses) on Trading and Derivatives	2
Net Gains (Losses) on Assets at FV through Income Statement	1
		14
less:
Net Fees and Commissions	4
Overheads	7
Loan Loss Provisions	1
Other	-1	11
Profit before Tax		3
Tax		1
Net Income		2

Calculate the following including for each section:

• A full explanation or your workings
• The assumptions that you have made
• An explanation of the particular relevance of the ratios for banks

i) Reserve ratio. (5 marks)

ii) Net interest margin. (5 marks)

iii) Earnings base. (5 marks)

iv) Burden ratio. (5 marks)

v) Efficiency ratio (5 marks)