Banks X, Y, and Z entered the banking sector in the last five years and are relative
Question:
Banks X, Y, and Z entered the banking sector in the last five years and are relative of the same size in terms of their total assets (see Table 1). Table 1: Balance sheets as of 31 December 2017 Bank X Bank Y Bank Z K’000 K’000 K’000 Cash and balances with other banks 115 120 80 Treasury bills 335 280 120 Loans and advances 600 600 900 Total 1,050 1,000 1,100 Deposits 800 700 850 Capital 250 300 250 Total 1,050 1,000 1,100.
Required:
a. Based on the above balance sheets, which one of the three banks exhibits more risk from an asset-liability management point of view? You must clearly give reasons for your choice.
b. Of the bank identified as exhibiting more risk, how would that bank manage the identified key risk(s)?
Taxation for Decision Makers 2014
ISBN: 9781118654545
6th edition
Authors: Shirley Dennis Escoffier, Karen Fortin