Question

Select items at Wales Bank and Conwy Bank; 2008 and 2018. Wales Bank Conwy Bank 2008 2018 2008 2018 Net Interest Revenue 50,451 80,326 40,662 32,531 Noninterest income 15,112 21,111 27,805 26,569 Operating Revenue 65,563 101,437 68,467 59,100 Operating expenses 60.749 92,547 41,545 40,012 Of which: Staff cost 26,989 32,145 21,166 19,900 Net Income 28,541 40,512 17,944 15,096 Loans 15,474 23,879 917,371 934,129 Total assets 1,021,456 1,564,879 2,555,579 2,409,656 Employees 2,456,295 3,421,363 298,000 264,000

Answer 1

								Amnt - $
	Wales Bank					Conway Bank
Details	2008	2018	Var	% var		2008	2018	Var	% var
net Interest revenue	50,451	80,326	29,875	59%		40,662	32,531	-8,131	-20%
Non Interest Income	15,112	21,111	5,999	40%		27,805	26,569	-1,236	-4%
Operating Revenue	65,563	1,01,437	35,874	55%		68,467	59,100	-9,367	-14%
Staff Cost	26,989	32,145	5,156	19%		21,166	19,900	-1,266	-6%
Other Operating Expenses	33,760	60,402	26,642	79%		20,379	20,112	-267	-1%
Net Income	28,541	40,512	11,971	42%		17,944	15,096	-2,848	-16%
Loans	15,474	23,879	8,405	54%		9,17,371	9,34,129	16,758	2%
Total Assets	10,21,456	15,64,879	5,43,423	53%		25,55,579	24,09,656	-1,45,923	-6%
Employees	24,56,295	34,21,363	9,65,068	39%		2,98,000	2,64,000	-34,000	-11%

From the above analysis , we can derived following conclusion :

1. Wales Bank performance is Excellent . Company posted revenue growth ( Net Interest Income ) by 59% - Quite good . where as other company Conway gradually reduced revenue growth and posted Negative growth , which is alarming .
2. Loan point of view – Wales during 10 year period posted loan growth by 54% but company also posted good revenue growth as well as Net Profit growth . Net profit the generated enough to cover up loan amount and backed up huge Asset potential .
3. Where as Conway Bank took huge loan in the year 2008 itself , though 10 year period No major such loan growth, which is good but their Revenue growth Negative also Net Income also posted LOW and very alarming position is that company Net Income can not cover total Loan amount .
4. Only positive factor in Conway is huge asset . At present they have huge asset as well as huge Loan but lower Net income and Revenue growth. Company immediately monetise asset and repay debt to reduce LOAN amount as well as Interest Cost

Overall analysis, Wales is doing excellent with high Revenue growth + Net income growth . Wales can start think ti repay loan amount and reduced burden debt ( improve Solvency ratio ) and reduce pressure on Interest cost ( which will improve net Income further )

Conway Bank – As explained above , they are into danger zone and immediately they need to monetise Asset base and reduce loan + Interest Burden . Bank has to look into revenue growth