MBA of Banking & finance

BANK MANAGEMENT
Title

Tutorial

Submission Date :

WEEK 4

Lecturer

Dr.Zahir Osman

Student name:

Anas ALhajjar

Student ID:

110037722

Semester

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You are the Senior Manager of Bank Berjayas Branch Banking

Department at head
office. Your bank has 50 branches
throughout the country.

Bank Management: Tutorial

1. You are the Senior Manager of Bank Berjayas Branch
Banking Department at head
office.
Your
bank
has
50
branches throughout the country.

(a) How do you assess the performance of your branches?

(b) What are the assessment criteria that you will select?

(c) What are the assessment measurements used by you?

(d) State the main problems you face in assessing the

business performance

Contents
-The concept of financial analysis
-Purposes, financial analysis of banks
-Methods of financial analysis
-Ratios to assist in measuring the efficiency of the branch

Financial analysis is the study of the financial statements under

the total of additional complementary data compiled after the
appropriate use of statistical and mathematical methods in
order to links that bind the elements and changes in these
elements over a period of one or several periods of time
The concept of financial analysis
And expands the concept of financial analysis to express a range
of analytical tools and methods that help in assessing the
performance and decision-making, which means that the

financial analysis constitute all of the activities at all levels of

management and financial activity not only because the
decision-making for a specific time period .

Ratios to assist in measuring the efficiency of the branch

-Measuring the efficiency of the branch in liquidity management
-Measuring Branch brought in deposits
-Measuring branch banking in spreading awareness
-Measuring the efficiency of the branch in the use of resources
-Analyzing the results of Activity Branch
-The most important ratios
performance of the branch

to

measure

and

evaluate

the

Is a measure of the performance of CAMEL

- Measuring the performance of the branch in liquidity

Data compared to averages of daily balances of deposits by
sources and the nature and cost of
Statement, compared to averages of daily balances of loans
Data movement of clouds and deposit in accounts receivable
and payable
According to these data as follows:

Identify the seasons increase or decrease deposits.

- Measuring the efficiency of the branch in attracting deposits

This can be measured by examining the following indicators:
- The rate of change in term deposits by term and by sector
- Analysis comparing frequency
savings accounts numbers

distribution

of

values

and

- The rate of evolution of the number of individuals' savings

accounts
- Average time the average daily balances of deposits
- The rate of change in the balances of deposits

Efficiency in branch banking awareness Can be measured by the

following indicators
- statement of accounts receivable and payable and distribution
Recurring
- The base of the section dealing with the size of their
transactions
- The number of accounts payable in the last year to the number
in the first year
- The number of accounts during the year, renewable to a
number of accounts in the first year

Measuring the efficiency of the branch in the use of resources

- Operation of resources in order to achieve the appropriate
bank liquidity
Operating resources in order to achieve an appropriate return
Operating resources, taking into account the largest amount of
security and the quality of the loan
Branch's contribution in financing in general
Other criteria
Operating resources in order to achieve adequate liquidity to
the bank Operating resources in order to achieve an appropriate
return
Are analyzing the following indicators:
Total revenues to average total assets.
The proceeds of the loans and advances to its average daily
Operating resources.
taking into account the largest amount of security and the
quality of the loan.
Develop policies
responsibilities.

clear

credit

determines

Focus on the study of creditworthiness.

the

powers

and

The safety and accuracy of the implementation of the credit

approvals.
Good selection of officials credit and queries.
Diversify the loan portfolio and risk reduction.
Commitment controls set by the central bank to extend credit.

Branch's contribution in financing in general

The growth rate of loans
Movement by the Securities kinds
The proportion of each type of activity to the total activity
The growth rate of the average daily or monthly for each of the
types of activity
The growth rate of the number of customers borrowers
The evolution of turnover loans
Other criteria for measuring competency in the use of resources
Ratio of equity to assets of the hazardous nature (capital
adequacy ratio)

Percentage of loans without collateral to the kind of property

rights
Analyzing the results of Activity Branch
Total revenue
Encumbrances
Net Profit
Total revenue
Compared to the size of the revenue generated annually and
measure
Measuring revenue by types (interest creditor - Other income)
Measuring the evolution of the proportion of revenues to the
average daily
Measuring the evolution of income from loans and advances to
the average daily

Analyzing the results of Activity Branch Encumbrances

- Interest paid
- Administrative expenses
- The cost of manpower

Net Profit
- The ratio of net profit to revenue
- The ratio of net profit to average assets and its evolution

The most important ratios to measure and evaluate the

performance of the branch
1. Liquidity ratios
2. Employment rates of money
3. The efficiency of activity ratios
4. Rates of profitability
5. Indicators of risk
Employment rates of money
- The proportion of loans+financial investments to total deposits
- The proportion of loans to deposits
- The proportion of the investment portfolio to deposits
- The proportion of the portfolio business to deposits
Efficiency ratios activity
- The proportion of total income to total assets
-Percentage of total loans to total assets

-The proportion of deposits to total assets

Rates of profitability
-The ratio of net profit before interest, tax to total assets
-The ratio of net profit after interest, tax to total assets
-Ratio of retained earnings to total assets
-The ratio of net profit after interest and taxes to Equity

Indicators of risk
-Provision ratio for doubtful debts to total loans
-Equity ratio to risk assets
-The proportion of deposits to property rights
-Fixed asset ratio of to property rights
CAMEL standard
Takes into account five key elements:
-Capital Adequacy
-Asset quality
-Management
-Earnings
Category grades ranging between
Category 5, which follows the worst

Category

is

best

To

 Ranked number 1 Strong

Ranked number 2 acceptable
Ranked number 3 was not bad
Ranked number 4 marginal risk
Ranked number 5 Bad

The basis of assessment of the capital of the branch

-Calculated capital adequacy ratio by Branch
-The contribution of the total assets of the bank's total assets
-Taking into account the size of the branch and its geographical
location
-The percentage change in the quality of assets of the branch,
which may lead to a decrease in the degree classification of
capital

Degrees of classification standard capital adequacy Branch

Category 1: very sufficient capital to absorb current
projected losses, including losses from off-budget liabilities.

and

Capital adequacy ratio exceeds the minimum required ratios and

average branches Similar

What has been achieved of the profits to support its capital base
through the reserves and provisions to the extent that does not
affect negatively on the quality of assets and the growth of the
branch
Category 2: Capital patients fairly and in line with the average
bank branches Similar
Degrees of classification standard for capital adequacy Branch
Category 3: negative impact on the capital structure of the
output and quality of risk assets despite the existence of
efficient management of capital adequacy ratios of less than the
minimum ratios and branches
Bank from similar despite the existence of the balance of La Paz
by security capital base, but the proportion of La Paz from the
base of the capital, but the proportion of high-risk assets and
operating in the small proportion
Category 4: capital inadequate and weak and clear that there is
a shortfall in the amount of capital compared to the size of risk
Category 5: Branch needs to treat fast position

The main problems you face in assessing the business

performance.

1. Don't assess actual performance.

2.Infrequent feedback.
3.Non-data-based assessment.
4.Lack of effectiveness metrics.
5.Lack of accountability.