• The term project constitutes 30 percent of the total assessment. You are required to answer the attached questions by choosing the topbank in a particular country and calculating and evaluating the several indicators of Bank's performance. The project should be submitted by 12 noon on Tuesday 5 January 2021

IIII KKTCELL "3" 5:36 PM {i} [E]: E moodle.ciu.edu.tr INBA507 F3112020 Term Project Guidelines Banks as Prot maximixers: country study (2015 to 2018) 1. How many licensed commercial banks 2. How many foreign commercial banks in the country '? 3. What is the total deposits in 2015 and 2018 '? 4.1dentify the top Commercial bank and compute its total share of the total deposits in 2015 and 2018 5. Identify the percentage of income(earnings) for the top commercial bank over the period 2015 and 2018, from 1. loans 2. Investment 3. all others 6. Comment on your result by identifying the main source Banks as Profit maximixers: country study in 2015 and 2018 7. Identify the sources of funds in percentage, 1. Deposits 2. Borrowing 3. All others 8.Comment on the sources of mds (What are the main sources of funds between 2015 and 2018? Has there been a change or are the sources remaining the same?) I KKTCELL 5:37 PM a moodle.ciu.edu.tr Calculating the Profitability of Banks 9. Determine the profitability of banks and how efficiently a bank is using its assets and equity to generate profits by calculating the following profitability ratios over the period 2015 and 2018: 1. Return on assets (ROA) 2.Return on equity (ROE) 3.Net interest margin (NIM) Return on assets To calculate a bank's return on assets, we need two pieces of information. . First, you need to find the net income, which can be found on the bank's income statement. . Second, you need to find the bank's assets (loans, securities, cash, etc.), which can be found on the bank's balance sheet. To calculate return on assets, simply divide the net income by the total assets, then multiply by 100 to express it as a percentage Return on assets (Cont.) Net income Return on assets = Total assets - x 100.III KKTCELL "3-\" 5:37 PM (i) E]. E moodle.ciu.edu.tr Return on assets (Cont) - As an example, Wells Fargo produced net income of just over $23 billion in 2015, and had total assets of $1.787 trillion at the end of the year. Dividing these two numbers and multiplying by 100 shows a ROA of 1.29%. - If you want the most accurate calculation possible for ROA (or ROE), you need to take an average of the assets or equity over the time period you're considering. - In the case of a bank's annual ROE, the best practice is to take the average of the assets at the end of the last ve quarters. - For Wells Fargo, the ve-quarter average assets were $1.737 trillion, which produces a slightly higher RDA of 1.32%. Return on equity - For return on equity, you'll need - l.the net income - the total shareholders' equity - All these can be found on the balance sheet. - The formula for ROE is Return on equity Net Income Return on equity = -- x 100 Equity .III KKTCELL "3-\" 5:37 PM (i) E]. E moodle.ciu.edu.tr Return on Equity - For our Wells Fargo example, - 1. the bank's ve-quarter average equity is $189.8 billion. - the bank has a net income of $23 billion -The ROE is 12.1%. Net interest margin - To calculate the net interest margin, you need to determine - l.the bank's net interest income. You can nd this on the income statement, or you can subtract the banlds interest expense om its interest income. - Then, divide this by the bank's assets. Similarly to the other two metrics, use a ve-quarter average of assets in order to produce an accurate NIM. - For Wells Fargo, its income statement shows 2015 interest income of $49.28 billion, and interest expense of $3.98 billion. Therefore, we can calculate its net interest income as $45.3 billion, and its net interest margin as 2.6%. Evaluating the Profitability of your Bank 9.Comment on the protability of your choosen bank over a three year period (2015 to 2018) using the following protability indicators; - 1. Return on assets (RDA) - 2.Return on equity (ROE) - 3.Net interest margin (NIM)