The financial investments of the Iraqi Credit Bank 1 Cash 150% of loans, fixed assets, 200% of loans, equity, 130% of loans, provision for doubtful debts, 20% of loans required to calculate indicators, credit risk...
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- Consider the following balance sheet for Whiz Financial Services Limited: Assets K Liabilities K Cash 6.25 Equity 25.00 Short term consumer loans (1 yr maturity) 62.50 Demand deposits 50.00 Long term consumer loans (2 yr maturity) 31.25 31.25 Client Savings accounts 37.50 3 month T-Bills 37.50 3 month CDs 50.00 6 month T-Bills 43.75 3 months Bankers Acceptances 25.00 3 year T-Bonds 75.00 6 month commercial paper 75.00 10 year, fixed rate mortgages 25.00 1 year time deposits 25.00 30- year floating rate mortgages 50.00 2-year time deposits 50.00 premises 6.25 - Total 337.50 337.50 Required:A. Calculate the value of the rate sensitive assets, rate sensitive liabilities and therepricing gap over the next year. B. Calculate the expected change in the net interest income for the bank if interestrates rise by 1 percent on both rate sensitive…(c) A bank has 100 in assets and 60 in liabilities. Suppose assets pay on average 6% and liabilities cost 2%. What is the expected rate of return on capital? A. 4% B. 12% C. 8% D. -4%Consider the following balance sheet Expected Balance Sheet for XYZ Bank Assets Yield Liabilities Cost Rate sensitive $ 800 7.0% 500 3.0% Fixed rate $ 400 9.0% 300 5.0% Non earning $ 200 200 $ 1,000 Equity 400 Total $ 1,400 $ 1,400 What is the Net Interest Margin (NIM) Select one: O a. 4.5% O b. 6.2% O c. 5.17% O d. 7.12% %24 %24 %24
- QUESTION Imagine that Hazim Islamic bank, has the following asset and financial details: Balance Sheet Items RM (million) Risk weightage BNM statutory reserve 20 0% Malaysian government securities (MGS) and treasury bills 60 0% Placement with discount houses 30 10% Amounts owed by banking institutions 50 20% House financing secured by first charge on residential property 120 50% Financing and advances provided to commercial customers 400 100% Off-balance sheet items RM (million) Credit Conversion Factor Risk weightage House financing sold to Cagamas with recourse 60 100% 50% Performance sukuk for commercial customers 20 50% 100% Letters of credit for commercial customers 70 20% 100% Capital RM (million) Paid up ordinary shares 30 Share premium 5 Retained profits 10 Subordinated term debt 14 Revaluation reserve 4…Consider the following balance sheet Expected Balance Sheet for XYZ Bank Assets Yield Liabilities Cost Rate sensitive $ 1300 8% %$4 1700 8% Fixed rate $500 9% $1500 5% Non earning $ 5100 $. 1800 Equity 1900 Total $ 6900 $6900 What is the Net Interest Margin (NIM)7 lender appraised value : $8,400,000 cash flow :$444,000 Using Information Above what would be the loan amount assuming a 75% loan-to-value and a 9% debt yield? Round to nearest dollar.
- Use the following to answer questions 3-4: Use balance sheet available for an FI (all in market values). Consumer loans $150 m Liabilities $300 m Commercial Loans $250 m Equity $100 m Total Assets $400 m Total Liabilities & Equity $400 m The average duration of the loans is 8 years. The average duration of the liabilities is 2 years. 3. What is the duration gap of the bank's portfolio? A. 10 years B. 6.3 years C. 6.5 years D. 7.98 years E. 8.0 years 4. What is the change in the value of the FI's equity for a 1 percent increase in interest rates from the current rates of 0.07 (1.e., 7 percent)? Assume flat term structure, and parallel shifts in yield curves. Use the duration concept. A. $17.30987 m B. $19.51818 m C. -S 22.59093 m D. -$23.11114 m E. - $24.29906 mConsider the following summarised balance sheet and associated average interest rates for RBK bank over a one-year time frame: Liabilities and Equity Rate sensitive Fixed rate Non-paying liabilities and equity Total Assets Rate sensitive 51,500 Fixed rate Amount Rate 2.5% 3.5% Amount 46,000 91,000 Rate 80,000 0.7% 1.9% Non-earning 13,500 8,000 Total 145,000 Unit: Thousand GBP. 145,000 a) Explain interest rate risk and how it arises from a bank's perspective with specific reference to the 2007-09 financial crisis. b) Present the basic steps in static GAP analysis. What is the objective of each step? c) Calculate RBK bank's (i) GAP, (ii) expected net interest income, and (iii) net interest margin if interest rates and portfolio composition remain constant during the year. d) Calculate the change in expected net interest income and net interest margin if the entire yield curve shifts 2 percent higher during the year. Comment on your answer and its implications for RBK bank's GAP. Is this…A bank is earning 6% on its $150 million in earning assets and is paying 4.75% on its liabilities. The bank's Net Interest Margin is __________________. A. 6.00% B. 10.75% C. 4.75% D. 1.25%
- A Input Area: Interest Income $ Amount of line of credit Term (months) Annualized interest rate on line of crdt Interest Cost Average deposit balance Annualized interest rate on deposit bal Expected Revenues Loan commitment fee (1%) Deposit management fees Wire transfer fees B Fees for agency services Expected Costs Cost of other funds raised Account activity costs Wire transfer costs Loan processing costs Recordkeeping costs Output Area: Expected Revenues Interest income from loan (4%, 9 mo,) Loan commitment fee (1%) Deposit management fees Wire transfer fees Fees for agency services Total Revenues Expected Costs Interest paid on customer deposits Cost of other funds raised Account activity costs Wire transfer costs Loan processing costs Recordkeeping costs Total Costs Total Revenues - Total Costs Before-tax rate of return over costs from the entire relationship C 10,000,000 6 4.00% 2,125,000 2.50% 100,000 4,500 3,500 4,500 180,000 5,000 1,300 12,400 4,500 D E41. After conducting a rate-sensitive analysis, a bank finds itself with the following amounts of rate-sensitive assets and liabilities (RSAS and RSL) and fixed-rate assets and liabilities (FRAs and FRLs); the rate of return and cost rates on the accounts are also given: Assets RSAS @ 4.25% FRAS @ 5.15% NEA Total Amount (Million $) S 322 S 700 S 120 $1,142 Liabilities & Equity RSLS @ 3.11% FRLS @ 4.95% Equity Total If the bank wishes to set up a swap to totally hedge the interest rate risk, the bank should A. pay a variable rate of interest and receive a fixed rate of interest. B. pay a fixed rate of interest and receive a variable rate of interest. Amount (Million $) S 200 $ 800 S 142 $1,142 C. pay a variable rate of interest and receive a variable rate of interest. D. pay a fixed rate of interest and receive a fixed rate of interest.Given the following information, calculate the duration of assets and liabilities. Assets Amount Rate Duration Cash 90 Loans 800 12% 2 years Treasuries 110 9% 8 years Liabilities and Equity Time deposits 500 6% 1.75 years CDs 425 8% 2.50 years Equity 75