The Bima insurance has reported the following
Assets
Sh ‘M’ Rate
90-day Treasury bills 5 9%
3-year floating rate mortgages 10
10-year, fixed-rate mortgages: 11 10%
90-day, fixed-rate loans: 35 9%
Property: 4
Liabilities
Demand deposits: 12 0%
Interbank borrowings (with maturities less than
90 days): 30 7%
Treasury bonds 5 12%
Equity: 8
Required:
- Calculate the reprising gap when the planning period is 90 days
- b) Suppose that all interest rates decrease by 200 basis points over the planning periods. What will be the impact on net interest income?
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