Spring 2018 – 2019
Deadline: May 14th, 2019 – 13:40
Table of Contents
1. Company Background
Provide brief information on the date of its establishment, number of employees, board member names such as Chairman of the board, President, CEO, CFO… etc. Was there any CEO and/or Chairman replacement during or after the recent financial crisis? Currently, is CEO and Chairman of the board represented by the same individual? Discuss it the context of “CEO Duality” debate.
- Total Assets: compare recent year with the year before
- Net income: compare recent year with the year before
3. Earnings and Profitability
- Interest Income, Interest Expense and Net interest income divided by total assets (in percentage). Compare recent year with the year before.
- Total Non-interest income and non-interest expense divided by total assets (in percentage). Additionally, choose one non-interest income item f.e. total fee income and also choose one non-interest expense f.e. compensation and compute their percentages in non-interest income and non-interest expense respectively. Compare recent year with the year before.
- Provision for loan and lease losses divided by total assets (in percentage).
- Comment on the details of changes in net income taking into account a, b and c. What drives the increase or decrease you observe in Net Income in the most recent year? Is it driven by interest income, non-interest income or maybe provision for loan losses? Discuss.
Discuss “Net Loans and Leases divided by total assets”. Also discuss the share of Commercial and Industrial Loans, Real Estate Loans and Individual or Consumer Loans within the total loans. Compare it with the industry.
Discuss the capitalization situation of the bank.
- Tier I Leverage Ratio
- Total Equity divided by Total Assets
- Retained Earnings divided by Total Equity
Compute growth rate of the following measures and discuss.
- Total Assets
- Total Equity
- Net Loans and Leases
7. Risk Management
- Discuss the Credit Risk (Hint: Check net charge-off rates in recent years and compare it with industry).
- Discuss the Liquidity Risk (Hint: Check for instance Total Loans/Total Assets and Total Loans/Total Deposits).
- Discuss the insolvency risk (Also comment on the recent market-to-book value ratio that you could find from finance.yahoo.com by searching for your bank with its ticker symbol).
Mention 1 global trend in banking and discuss its impact for the bank.