The latest report of condition and income and expense statement for SME National Bank are as shown in the following tables: SME National Bank (complete) Income and Expense Statement (Report of Income in Millions of GHS) Interest and fees on loans 50 Interest and dividends on securities 6 Total interest income 56 Interest paid on deposits 40 Interest on nondeposit borrowings 6 Total interest expense 46 Net interest income 10 Provision for loan losses 5 Noninterest income and fees 20 Noninterest expenses: Salaries and employee benefits 10* Overhead expenses 5 Other noninterest expenses 2 Total noninterest expenses 17 Net noninterest income -2 Pretax operating income 8 Securities gains (or losses) 2 Pretax net operating income 10 Taxes 2 Net operating income 8 Net extraordinary income -1 Net income 7 *Note: the bank currently has 40 FTE employees. SME National Bank Report of Condition (In Millions of GHS) Assets Cash and deposits due from banks 100 Investment securities 150 Money mkt funds sold 10 Net loans 700 (Allowance for loan losses = 25) (Unearned income on loans = 5) Net Fixed Assets 50 Total assets 980 Total earnings assets 860 Liabilities Demand deposits 190 Savings deposits 180 Time deposits 470 Money mkt funds purchased 80 Total liabilities 920 Equity capital Common stock 20 Surplus 35 Retained earnings 35 Total Capital 80 Interest-bearing deposits 650 Using these statements, calculate the following performance measures: Asset management efficiency Funds management efficiency Operating efficiency ratio What strengths and weaknesses are you able to detect in SME’s performance?
The latest report of condition and income and expense statement for SME National Bank are
as shown in the following tables:
SME National Bank (complete)
Income and Expense Statement (Report of Income in
Millions of GHS)
Interest and fees on loans 50
Interest and dividends on securities 6
Total interest income 56
Interest paid on deposits 40
Interest on nondeposit borrowings 6
Total interest expense 46
Net interest income 10
Provision for loan losses 5
Noninterest income and fees 20
Noninterest expenses:
Salaries and employee benefits 10*
Other noninterest expenses 2
Total noninterest expenses 17
Net noninterest income -2
Pretax operating income 8
Securities gains (or losses) 2
Pretax net operating income 10
Taxes 2
Net operating income 8
Net extraordinary income -1
Net income 7
*Note: the bank currently has 40 FTE employees.
SME National Bank
Report of Condition (In Millions of GHS)
Assets
Cash and deposits due from banks 100
Investment securities 150
Money mkt funds sold 10
Net loans 700
(Allowance for loan losses = 25)
(Unearned income on loans = 5)
Net Fixed Assets 50
Total assets 980
Total earnings assets 860
Liabilities
Demand deposits 190
Savings deposits 180
Time deposits 470
Money mkt funds purchased 80
Total liabilities 920
Equity capital
Common stock 20
Surplus 35
Total Capital 80
Interest-bearing deposits 650
Using these statements, calculate the following performance measures:
Asset management efficiency
Funds management efficiency
Operating efficiency ratio
What strengths and weaknesses are you able to detect in SME’s performance?
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