Give a brief assessment as to whether the bank is facing any other risks in its current
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Question:
Give a brief assessment as to whether the bank is facing any other risks in its current operations and if so, outline a strategy with recommendations to address/manage such risks. In this strategy you may include recommendations that can be implemented in the medium to long run in managing the risk as well as improving the bank's profitability.
Change in Rates (basis points) | Duration of IRF | b ratio |
30 | 9.25 | 0.9 |
The bank balance sheet
Assets | ($ million) | Duration (years) |
Reserves and cash items | 600 | 0 |
Securities | ||
Less than 1 year | 800 | 0.4 |
1 to 2 years | 500 | 1.6 |
Greater than 2 years | 1300 | 7 |
Residential mortgages | ||
Variable-rate | 1000 | 0.5 |
Fixed-rate (30-year) | 2000 | 6 |
Commercial loans | ||
Less than 1 year | 1500 | 0.7 |
1 to 2 years | 1000 | 1.4 |
Greater than 2 years | 2500 | 4 |
Physical assets | 5000 | 0 |
Totals Assets | 16200 | |
Liabilities and Equity | ||
Checkable deposits | 2500 | 2 |
Money market deposit accounts | 700 | 0.1 |
Savings deposits | 1500 | 1 |
CDs | ||
Variable-rate | 1000 | 0.5 |
Less than 1 year | 1500 | 0.2 |
1 to 2 years | 500 | 1.2 |
Greater than 2 years | 500 | 2.7 |
Overnight funds | 500 | 0 |
Borrowings | ||
Less than 1 year | 1000 | 0.3 |
1 to 2 years | 500 | 1.3 |
Greater than 2 years | 500 | 3.1 |
Total liabilities | 10700 | |
Equity (K) | 5500 | |
Total Liabilities and Equity | 16200 |
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
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